Post Holiday Blues

Here it is, we are staring February in the face, The warm glow of the Holiday Season has faded, and the December credit card bills are coming in.

Maybe, you really tried to keep spending under control, maybe you did not quite succeed. But the fact is now, you have to figure out what to do about the bills.

My name is Brian McIlmoyle, I’m an articling Trustee with Hoyes Michalos & Associates Inc. in our Mississauga office and I’ve seen the “Post Holiday Blues” every years at this time for the past few years.

It’s not that you over spent, it’s not that you were out of control, it’s just that you were already a bit overextended before the Holidays, and now finances are really starting to pinch.

You are probably looking at your credit card bills and seeing things like, “if you continue to make minimum payments your balance will be paid off in 18 years”
18 years… that is a long time, it’s time to take care of your debt now, but how do you do it?

The first thing you do is get informed, find out what options are available and how you can go about getting yourself debt free. Our website www.hoyes.com contains a wealth of information on all options.

If you are like most people I talk to daily in my Mississauga office, bankruptcy is the farthest thing from your mind, fortunately for most people dealing with debt, bankruptcy is not the best option.
In fact most people who deal with us at Hoyes Michalos & Associates Inc. file a Consumer Proposal to deal with their debts. They can settle their debt for a fraction of what they owe and make a single affordable monthly payment. Getting free of your debt does not have to take 18 years of payments. It can take much less time and cost much less money than you ever thought possible with a Consumer Proposal.

Don’t let the “Post Holiday Blues” get you down, take control, Click on www.hoyes.com or call 310-PLAN ( 7526) and lets get started

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This is a common question we are asked when we meet with individuals.

My name is Adam Rauf and I’m an articling student with Hoyes, Michalos & Associates Inc. and I work out of our Brampton Location.

A blemished credit rating is an unfortunate consequence when an individual decides they need to explore debt management options (whether it’s a credit counselling program, a consumer proposal or filing a personal bankruptcy)

When an individual files a personal bankruptcy, they are rated at an R9 – which is the lowest possible rating. If you’re already in collections, than those debts are already rated at an R9 (so bankruptcy won’t make it any worse).

While an individual is bankrupt, they will not qualify for any unsecured credit (bank loans, traditional credit cards, mortgages etc). Once an individual receives their discharge from bankruptcy (which could be 9 months for people who have never been bankrupt before), the bankruptcy stays on your credit report for 6 years from your discharge date.

If an individual works consistently (showing stable employment), continues car payments, mortgage payments etc. then rebuilding the credit rating is definitely possible before the 6 years are up.

There are other solutions to help resolve your debt issues that are less “damaging” on your credit report.
More than 50% of the clients I meet in Brampton choose to utilize a consumer proposal to manage their debts.

A consumer proposal will put your credit rating at an R7 (which is essentially the same) from any potential creditors.

If you think your debts are becoming too unmanageable and you need some relief from harassing and threatening phone calls, contact us right away 866-747-0660 to book a free consultation so we can discuss your options in person. Alternatively, feel free to e-mail us if you prefer

We hope to hear from you soon.

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Benny Mendlowitz: Bankruptcy Trustee and Consumer Proposal Administrator

Lose weight and get fit
Eat healthier and diet
Quit smoking
Drink less
Get out of debt and save money / budgeting
Spend more time with family
Travel to new places
Learn something new
Be less stressed
Volunteer

Well, I don’t know about you, but I have tried most of these and have failed miserably at many of them. I think the biggest reasons may be that either my expectations are too high or I am not an expert in what I am trying to fix.

So let me focus on one item that I am an expert on: Get out of debt and save money / budgeting. My colleague, Doug Hoyes, has posted some very interesting material on budgeting. His basic message is “don’t” budget. It is hard. It is difficult. It requires discipline. So what does he suggest? Simple: pay your bills when you get paid. Weekly, bi-weekly, semi-monthly, whatever your pay cycle is, set up your bill payments to match your pay cycle. He presents his ideas in a 2 part video series which you can watch here:

The Secret to Budgeting – Part 1

The Secret to Budgeting – Part 2

After all of the above, if you feel like you are in over your head with your debts, give us a call to review your options, which could include a consumer proposal or personal bankruptcy.

If you want to meet with me, here is my standing invitation:

***** 310-PLAN *****

***** 310-7526 *****

***** No Area Code Required *****

It’s up to you now; Let’s get started

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A question that I get asked quite often is “how long will I be bankrupt?”.
The answer is, “ it depends”.

Here are the basic answers:
9 months, if you have less than average income and have never been bankrupt before.
21 months, if you have more than average income and have never been bankrupt before.
24 months, if you have less than average income and have never been bankrupt before.
36 months, if you have more than average income and have been bankrupt before.

These are very basic answers. They haven’t taken into account other factors which might extend your bankruptcy, such as gambling, drug addiction, failing to perform duties, or even a creditor challenging your bankruptcy.

My question to most of these people is why file a bankruptcy which will last 2 or 3 years when you have a better option: a consumer proposal.

This whole topic is complicated. If you want to read more, visit our Personal Bankruptcy in Ontario website which describes the Length of Bankruptcy in Canada: How Long Will You Be Bankrupt Under the New Rules? The best I can tell you is if you are worried about how long a bankruptcy will last, meet with a licensed trustee who will be able to assess your situation and provide you with the best advice tailored to your situation. That is what I do, day in and day out. So contact me so we can work on your situation. I assure you that I will give you the time of day and come up with a plan that is right for you and your family.

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I meet with many people during the course of my day. Everyone has their own reason for being in my office. There may have been a change in their work situation. They may have had a personal or family crisis. Their business may have suffered. Or it may simply have been a matter of letting their finances get out of control. After listening to their story, I ask them the same question: what would they like me to help them with? And without putting words into their mouths, they mostly say the same thing: they would like to get a fresh start. They would like the phone to stop ringing. They would like to sleep at night. They want to start over.

If a fresh start is what they are looking for, I can help. By digging deeper into their situation, I can help most people come up with a plan. Some people earn a decent wage, but their monthly payments on their credit cards and loans have gotten out of control. Their minimum payments drain them, and then they haven’t made a dent into the principal owing. These people fit perfectly into a consumer proposal.

Sometimes the situation is a little worse. Some people can cover their basic living expenses, but have nothing left over to offer their creditors. I will work with these people to take a closer look at their income and where they spend their money. There are many different reasons why the situation might me as bad as it is. It could be a loss of income. Or a family separation leaving a single income parent trying to raise their kids. In these cases, bankruptcy may be the only solution.

In any event, I can help these people get that fresh start. While I have mentioned a consumer proposal and bankruptcy, there are other options available to you. If you would like to do some reading, have a look at our Fresh Start Guide. Or better yet, contact us to schedule a no cost, no obligation consultation.

It’s up to you now. Let’s get started.

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When you are trying to handle a difficult financial situation, you are under a lot of pressure. It may be difficult to make the best decision if you don’t have all the information. Let me tell you a few things you should know before making that decision.

The most important point to know is that Consumer Proposal Administrators and Bankruptcy Trustees are licensed by the Federal Government. They both follow the rules and regulations that are contained in the Bankruptcy and Insolvency Act. They offer you protection from your creditors. Wage garnishments are stopped. Legal actions are stopped. Collection calls are stopped. Even if some of your creditors don’t agree and don’t like your choice, you are protected. That is the law.

None of this applies to a debt consultant. That is all I have to say about that. (Unless you would like to read some debt consultant horror stories.)

Still want to work with a debt consultant? Ask them how much their fee is for their advice. When you ask a Consumer Proposal Administrator or a Bankruptcy Trustee what they charge for advice the answer should be nothing. That is the answer you will get at Hoyes Michalos. Want to know more about your options? Check us out here.

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This coming Saturday, September 24, Doug Hoyes and Ted Michalos will be on the air LIVE exposing “Debt Myths”. You can catch it on the internet by tuning it to 570 News at 1:00 p.m. The topics covered will include debt consolidation loans, payday loans, credit cards, consumer proposals and bankruptcy.

This will truly be an entertaining segment of “Ask the Expert”. The phone lines will be open and you can call in with your questions. If you’ve been wondering whether taxes are covered, or if everybody will find out about your situation, or whether you will lose your car or house, tune in on Saturday.

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As the trustee responsible for the North York and Scarborough offices of Hoyes Michalos , I would like to report on the latest bankruptcy statistics released by the Office of the Superintendent of Bankruptcy for the first 6 months of 2011.

First of all, the big picture: total consumer insolvencies for the Greater Toronto Area, North York and Scarborough, for the 1st 6 months of 2011 were 9,568, 1,713 and 1,396, respectively. (All numbers I present will be in the order GTA, North York and then Scarborough). These numbers are down from last year by 11%, 13% and 8%.

What is interesting is that the number of personal bankruptcies dropped by 28%, 22% and 24%, and the change in consumer proposals filed were +4%, (-5%) and +7%. North York is a bit of a quirk, bucking the trend we have seen most elsewhere. Please see bankruptcy in Canada and consumer proposals sites for statistics outside of the GTA.

One final set of numbers. The percentage of consumer proposal filings as compared to total consumer filings (bankruptcies and proposals) were 60%, 57% and 61%.

So, what does all this mean? The trend we are seeing in pretty much all our offices at Hoyes Michalos is that fewer people are filing for bankruptcy and more are taking advantages of consumer proposal legislation. I believe this is the case because the bankruptcy laws which were changed in 2009 made it more harsh and punitive to choose the bankruptcy route. In addition, there are many benefits to filing a consumer proposal (check them out here) that people are taking advantage of. Whenever a prospective client meets with me and they are faced with the choice of bankruptcy vs. proposal, 99 times out of 100, I will recommend the proposal route.

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What does the average person who files bankruptcy in Toronto look like? We all know the stereotypes: A bankrupt person is unemployed and "down and out", right?

Wrong.

Joe Debtor Average Debt Level

Hoyes, Michalos and Associates Inc., Toronto’s leading consumer proposal and Ontario bankruptcy firm, has released an important new study called Joe Debtor, The Face of Bankruptcy where we profile the average person who files bankruptcy in Ontario. We call this person "Joe Debtor", and we discovered, surprisingly, that Joe Debtor looks like you.

That’s right, Joe Debtor is very similar to the average Canadian. He has a job, and may also own a home. He is very similar to the average person. The only difference between Joe Debtor and the average Canadian is that Joe Debtor has a huge level of debt.

The average Canadian has about $16,400 worth of consumer credit, which is all debt except for mortgages. "Joe Debtor" has almost $60,000 in consumer credit. With more than three and a half times as much debt, it’s no wonder Joe Debtor gets into financial trouble. 

What about residents of Toronto? As readers of this website know, Hoyes, Michalos & Associates serves residents of Toronto from our offices in North York, Scarborough, Vaughan, Mississauga, Brampton, and in Toronto at Yonge & Bloor. We used the data gained from our experience in these offices, and here’s what we found:

Toronto residents are similar to people in the rest of the province, but they have a higher level of debt.

"Joe Debtor" owes just under $60,000 in consumer credit; the average GTA debtor owes $66,400 (not including mortgages). For debtors with a house mortgage, the Ontario average is $210,000; in Toronto the average mortgage balance when filing is $284,000, which is obviously much higher than the Ontario average. That’s not surprising; house prices in Toronto are the highest of anywhere in the province, so naturally mortgage debt is also highest in Toronto.

The story of Joe Debtor has been widely discussed in the Toronto media. You can read some of the reports on Joe Debtor in the Toronto Star, the Financial Post, and on the CBC website.

So what did we learn from our study? Debt in Toronto is very dangerous. If you take a cash advance from one credit card to pay another, and if you only make your minimum payments, you have more debt than you can handle, and you need help.

For many people in Toronto the answer is a consumer proposal. You make one affordable monthly payment, and your unsecured debts are eliminated.

To find out more, call any of our Toronto offices at 310-PLAN , or e-mail us to ask your questions or arrange a time to meet, and find a solution to your debt problems. The phone call is free, and the initial consultation is free, so call today, and let’s get started.

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"What will I lose if I go bankrupt in Toronto?" is one of the most common questions I am asked at my North York bankruptcy office. 

Janette and Benny

My name is Janette Martin and I work with Trustee Benny Mendlowitz at the Hoyes Michalos & Associates Inc. bankruptcy office in Toronto

There are many misconceptions about what happens to a person when they file for bankruptcy in Toronto. The top three misconceptions I see are:

• You are not allowed to work while bankrupt. That’s not true. In fact, most people who file bankruptcy in Toronto are working.
• Your family will become responsible for your debts. Also not true, unless they have co-signed for you
• Your creditors or the trustee will come to your house to take away their belongings and sell them to pay their debts. Again, not true, as we will discuss below.

When you file for bankruptcy, as your trustee, one of our jobs is to determine what you own, and what it’s worth. If your assets are "exempt", we don’t take them.

The Execution Act of Ontario exempts your basic belongings. These Ontario bankruptcy exemptions mean that if you go bankrupt in Toronto, the following assets are exempt from seizure by your trustee:

• $5,650 worth of personal possessions (clothing, jewelry, sports equipment, etc.);
• $11,300 worth of home furnishings (like furniture, televisions, computers, etc.);
• A motor vehicle (cars, trucks, etc.) worth up to $5,650, provided there are no liens against it. You can read more in our article on What will happen to my car if I go bankrupt in Toronto?
• $11,300 worth of tools of the trade (equipment that you use to earn a living).

In addition, in most cases you won’t lose your RRSP (except what you have contributed in the last year).

This is a very simple summary of what you may lose if you file bankruptcy. I strongly recommend that you take our free on-line bankruptcy review of your situation, or call us at 310-PLAN , or e-mail us today to arrange for a free initial consultation.

One final thought: if you want to avoid bankruptcy and guarantee that you won’t lose your assets, a perfect solution might be a consumer proposal. Contact us today to find out more.

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