Archives for October, 2009

Halloween is almost here – another year has passed and many former students who call our Bankruptcy Toronto helpline at 310-PLAN are still unsure if their student loan debt will survive bankruptcy. Some

people think that this is a trick question – the natural assumption is that a loan’s age is calculated from the date the loan was issued to the borrower – but in the case of student loan debt this is incorrect.

Here’s the trick: Student loan debt is not automatically discharged by bankruptcy unless the borrower has been out of school for a period of 7 years or longer – and this is where the most common misconception occurs. We refer to the date that you last attended a university or college to be your “end of study date” and this date does not always the same as your “graduation date.” Many graduates return to school for upgrading after they have graduated, which re-sets the 7 year clock. The government views your end of study date to be the date that you last attended a university or college either full or part-time – period.

We advise everyone to investigate before they make any decision with regard to options such as personal bankruptcy or a consumer proposal. You can verify your end of study date by contacting Canada Student Loans at 1-888-815-4514 and if you borrowed Ontario Provincial Loans you can contact them at 1-807-343-7260 (for all other provincial student loans please consult the appropriate provincial government website). Contacting the borrower or collection agent will not necessarily confirm your end of study date. By making a couple of simple phone calls you can save yourself from any surprises!

So, there really isn’t any “trick” to it – confirm your end of study date and then decide what solution is right for you – we at Hoyes Michalos would be glad to help you understand your options and can be reached at 310-PLAN – with one less “trick” to worry about you can enjoy a few treats before we ease in to the busy holiday season – watch our website in the coming weeks for tips to make the holidays easier on your wallet in Toronto!

Have a safe and Happy Halloween!

I would like to share with you my day spent with a client who came in thinking she might be filing for bankruptcy in my Toronto office.

She had taken the day off work to meet with me to discuss her financial predicament. I’m not sure why she took the whole day off. We tell prospective clients that this consultation will generally run 30 to 45 minutes. Anyhow, after 30 minutes, it was clear that bankruptcy was not her best option. She had enough cash flow to offer her creditors a meaningful settlement; she just could not pay them in full.

At this point, I would normally have sent the client home with a homework project, namely assemble all the documents I needed to start her file. Well, she had actually brought all her documents with her, and since she had taken the day off..

I had my assistant, Britney, sit down with her and go through all her paperwork. Everything was in order. At this point, we would schedule the client to come back in a few days to sign all the documents which take some time to prepare, but since she had taken the day off..

We asked her if she would like to kill a few hours in the mall across the street while we prepared her package. (We took all her credit cards, so I knew she wouldn’t be getting into any trouble.)

She was back in our office in 2 hours, I reviewed all the paperwork with her, had her sign it, efiled her proposal with the federal government and sent her home with a document confirming that her proposal was filed. In at 10:30, out at 3:00. My dry cleaners can’t even work that fast.

So what’s my point? Well, files don’t often unfold as this one did. But in this case, the client was organized, we had an opening, and the client was prepared to wait. She met with a real live trustee (me), not a manager or clerk; we made the time to service her and sent her home happy. If one of these clients came along every day, I would make the time for them. She left my office with the weight of the world off her shoulders. Did I tell you that when I asked her how much she owed to some of her creditors she said she didn’t know? I looked at the pile of bills in front of her and asked her why they were unopened. She said that it made her sick every time she opened a new bill to see how much it had grown to. This lady needed help and I was happy to help her. And that made me smile.

When it rains, you bring an umbrella, when the economy is struggling and people are losing jobs -  best to be prepared

It has been a rather cold summer and now with a stormy fall and winter fast approaching, with the unpredictable weather we have been having in Toronto, it has crossed my mind that we may easily draw parallels to the ongoing economic storm that we are currently in. Each day brings a new challenge. How do you prepare for it? When you wake up in the morning and you see that there are clouds up above, you grab your umbrella and add it to your gear for the day – you prepare for the worst and hope for the best.

This is no different when you see the news regarding the economic issues of the day. It also does not help when you see colleagues, friends and family members losing their jobs. It’s a fact that the bankruptcy level in Canada is at record levels -  we are seeing the highest rate of bankruptcies and proposals since the 1980s and some of the major financial institutions are predicting that over the next two years this will only increase. Toronto is no exception; the bankruptcy rate in Toronto is also at record levels. If you are experiencing a minor debt crunch today, and you are still working, you may be able to avoid bankruptcy by simply picking up a financial umbrella. You have may have options depending on how prepared you are.

It’s easy to talk about being prepared but how do you prepare? What can you do?

Know your options. And to better understand how they will work in your situation, have a good family budget – this will require some planning and organization. However, it will be well worth it once it is done. Sometimes budgeting requires the assistance of another person. At Hoyes Michalos & Associates Inc., we would be glad to assist you and then the options you have available to you for dealing with your debt in Toronto.

Bankruptcy may not be the only option or the correct option. It may be that you would be better off doing a consumer proposal.

Your finances can feel like a tornado, but we will help you navigate through the storm and come up with a plan that will work for you and your family.

Be prepared and take the right steps now the same way you can arrive at work in a dry suit if you have the foresight to grab that umbrella on the way out. To find out more about bankruptcy or a consumer proposal in Toronto please contact us at 310-PLAN (no area code required), or e-mail us to discuss your options, and we will help you develop a plan that will help you survive these tough economic times.