You have finally summoned the courage to make an appointment with someone in a bankruptcy trustee’s office. How are you supposed to handle the interview? Will the person be judgmental? What can you expect.
The first thing is the person will want to get your financial facts in order to determine what your alternatives are. While a bankruptcy or a consumer proposal does not affect the credit of a spouse, the solution will depend on the household income and expenses. So have those details available. Also, have the details about your assets and all your debts. There are certain debts that are exempt such as Canada Student Loans if you have been out of school less than seven years. But let the trustee tell you if the debts are exempt or not. Also know if the debts are in your name, if someone else has co-signed or if it is a joint debt.
Answer the questions truthfully. If you are living common law, do not say that you are single especially if the creditors know about the other person. If you are not truthful, it may cause you problems at a later date. Let the trustee make all the decisions on any contentious issue.
An interview about your financial situation can be an emotional time for you. If you are an emotional person, do not worry about letting your emotions show. It may often makes the rest of the interview easier.
Finally, remember that the trustee is there to help you find a solution to your financial problems. So he should be able to explain the various possible solutions to you in a way that you understand. If you do not understand, then feel free to ask questions at the appropriate time. In the end, the decision is yours to make, at Hoyes Michalos, we are here to help you get a fresh start. If you have a debt problem, and are looking for a solution, we would be pleased to help you.

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My name is Janette and I work in our North York office.  I have two questions to ask you.

1.   Do you feel that your debts are overwhelming? 
2.   Do you lay awake at night worrying about how you are going to pay your bills?

If you answered yes to either of these questions, then you don’t need to worry any longer because there are ways to get your debts under control. 

Canada is a great country for many reasons.  If you are lucky enough to live in Canada and you owe debts that you are unable to pay then The Bankruptcy and Insolvency Act allows you to file either a bankruptcy or a proposal to deal with your creditors.

A proposal is a good way to settle your debts for less than you owe and is structured as a fixed monthly payment over several years.  The amount that you offer your creditors is based on what you can afford after paying your living expenses.

If your income is low and you cannot afford to make a proposal to your creditors, then a bankruptcy is the best way to allow you to start over with a fresh start.  Filing a bankruptcy will stop your creditors from contacting you and eliminates almost all debts. Through the bankruptcy process most of our clients can easily identify how or when their finances began sliding out of control.  The bankruptcy process allows them to start over without debts, learn how to better manage their money and to recognize warning signs so that they will not end up it this situation again.

For most people filing a bankruptcy truly is a fresh start. We have posted some of our client’s testimonials on our website which you might like to look at.

If you have more debt than you can handle, it’s time to call us at 310-PLAN (7526) or 416-730-8060 or e-mail us.  We would be happy to meet with you to discuss your options and answer any questions you might have.

Imagine a life without debt.

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Julie Wildman, CA, MBA - Client Service Specialist

My name is Julie and I work in our 8 King St E and 2 Bloor St E offices. People considering bankruptcy often have many fears and concerns about the process.

Often times, they won’t discuss these issues with family or friends because they feel embarrassed or ashamed to admit their financial troubles. These feelings can sometimes prevent people from reaching out for the help getting the fresh start they need. The following are some common misconceptions about bankruptcy in Canada that may help you better understand the process.

Myth: My employer/neighbour/extended family is going to find out about the bankruptcy

Fact: Unless your wages are being garnisheed, there is no reason for your Turstee to need to contact your employer. When you file for bankruptcy, the only people that are notified are your creditors. There are no notices published in newspapers, so unless you choose to share the information with those around you, they are highly unlikely to ever know you have filed for bankruptcy.

Myth: I will lose everything I own

Fact: Most Canadians keep everything they own when they file for bankruptcy, as opposed to what most people think. As part of the bankruptcy process, you are required to swear a statement disclosing all of your assets and liabilities. Under Ontario laws, you are able to keep your assets as long as they are under certain values. For example:
• RRSPs (except for contributions made in the 12 months prior to bankruptcy)
• Household items up $11,300
• Clothing up to $5,650
• One vehicle up $5,650
• Work tools up to $11,300

Myth: I will be in bankruptcy for an extremely long time

Fact: If you have never been bankrupt before, your first bankruptcy lasts either nine or 21 months (depending on your income), and costs approximately $1,800 (minimum fees set by Government tariff). Most people pay $200 per month for the nine month term of their bankruptcy.

Myth: I’ll ruin my spouse’s credit rating.

Fact: As long as there is no joint unsecured debt between you and your spouse and you continue to make payments on any joint secured debts you have (such as your mortgage or car loans), your spouse’s credit rating will remain intact even if you file for bankruptcy.
If you’re struggling with your debts, a personal bankruptcy may be an option for you. Take a moment to watch this video which features Doug Hoyes discussing “What is Personal Bankruptcy?”:

If you find you’re not able to meet your debt replayment obligations for any reason, keep in mind there is no charge for you to come in and meet with one of our professional team members who will be able to talk with you about your own financial situation. We’re here to help you understand your options and come up with a plan that works for you in order for you to get the fresh start that you’re looking for. Give us a call at 310-PLAN or email us to set up a meeting today.

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My name is Adam Rauf and I’m an articling student studying to become a Trustee in Bankruptcy with Hoyes, Michalos & Associates Inc. and I work out of our Brampton Location.

Bankruptcy in Canada has evolved extensively over the last century.

There is no such thing as Debtor’s Prison in Canada. You cannot go to jail for not paying your debts. The legal ramifications of not making your debt payments could be judgements that can turn into writs of seizure and sale against your assets or garnishments against your wages.

For the honest but unfortunate debtor, the options for helping to resolve your debts (and putting an immediate end to your creditors harassing you for payments) is to file a personal bankruptcy or a consumer proposal. A consumer proposal is offering an amount to your creditors to pay a portion of what you over a period of time that cannot exceed 5 years. All interest stops and your payments are going to the entire principle that has been negotiated between you and your creditors (via your Trustee in Bankruptcy).

Historically, bankruptcies outnumbered proposals 3:1, but as the bankruptcy laws changed in 2009 (making bankruptcy longer and more punitive), many consume debtors are starting to utilize consumer proposals as a means to remedy their debts.

I’m pleased to report that 75% of clients that I meet with in the Brampton area are utilizing a consumer proposal versus a bankruptcy to help give themselves a fresh financial start. As the personal insolvency laws continue to change, so will

If you think you may be a candidate to offer your creditors (the people you owe money to), a proposal, then my suggestion is to contact us right away at 866-747-0660 and book a free consultation with one of our associates. Alternatively, feel free to e-mail us and an associate will respond as soon as possible.

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My name is Janette Martin and I work in the North York, Ontario office. 

Joint debts are very common.  We deal with this type of debt on a daily basis.  Here are three interesting things you should know about joint debt:

 1.     If you have taken out a joint credit agreement, such as a loan or credit card or bank account  then you are both liable for the full amount of the debt.  You are not responsible for only half of the debt.  If one of you fails to repay the debt , then the lender will pursue you for payment of the full amount.

 2.     If you have a joint debt with your spouse and you separate and your separation agreement states that all joint debts are to be split 50-50, that agreement is only binding between you and your spouse.  It is not binding upon your creditors.  If your spouse does not pay their share of the debt then you are still responsible for the whole debt.

 3.     Joint debt can be dealt with easily through the bankruptcy  or proposal process.  Bankruptcy rules allow for a joint filing which eliminates the need to file separate bankruptcies to deal with the same debt.  By being able to file a joint bankruptcy you will also avoid paying for two bankruptcies.

If you are having a difficult time keeping up with your payments to your creditors, call us at 310-PLAN (310-7526, no area code required). There are options.  To see which option is right for you, try our debt options calculator, or email us for a no charge initial consultation to review your options.

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At the end of every month, like most businesses, we review what we did in the prior month particularly the people we met with in order to determine who we might need to follow up regarding any questions or further issues they may have.  In my review of our meetings for our Toronto Downtown offices, I noticed that there were quite a few people who had been to see a debt management company prior to meeting with us.  So I decided to look a little further and it was clear that most had met with the debt management representative more than once.  By the second meeting, if not at the first, the discussion of a fee amount was established.  The range of the fees quoted was from $200 up to $2000.  There was also a range of services from an introduction to a trustee as the debt management company was not able to assist  to “we, the debt management company,  can settle your debts for you but need to be paid first”.  One thing was clear from these meetings is there was little or no paperwork to document the fee paid and services to then be provided. 

At this point in the process (and I am happy to say)  most of the individuals were not comfortable and decided to do some more research which resulted in an appointment to see us at Hoyes Michalos. 

I don’t really think I need to go much further, especially if you have been to our website at www.hoyes.com or follow Doug Hoyes’ blog regarding some of the tactics debt counsellors use and who they are.  But suffice to say “Caveat Emptor – Buyer be ware”.   If you can make an appointment to see a professional and there is no charge for this meeting that is, it is a free consultation to review your options, I am not sure why more individuals do not take advantage of this offer first.  Why pay for something you can have for free?   So I cannot emphasize enough about doing your homework first. 

If your debts are overwhelming and you want to discuss your options, we would be glad to assist you in this process and come up with a plan that will work for you and your family.  Do not hesitate to contact us either by email or at 310-PLAN.

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Does this happen only to a few people? Am I the only one? Am I alone?

The answer: No, no and defintely not.

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

Unfortunately with tens of thousands of people in Canada still struggling to get through a long drawn out recession, they have been relying heavily on their credit cards and savings to try and help them through a very difficult period in their lives.

The Office of the Superintedent of Bankruptcy has released 2 quarterly reports (on average, 30, 000 people had to file in each quarter) showing approximately 90, 000 people had to file a bankruptcy or consumer proposal in 2011 (we are only going to discuss consumer insolvencies and not take into account business bankruptcies, or re-arrangements).

Approximately the number of files of bankruptcies to proposals nationally is 2:1.

I’m pleased to report that in our Brampton office, most of our clients are filing bankruptcies to proposals closer to 1:3 indicating 75% of our clients choose to file a consumer proposal over a bankruptcy.

A consumer proposal is a legally binding contract that allows individuals to pay a portion of what they owe over a period of time that cannot exceed 5 years.
In a consumer proposal, interest stop and an individual has the ability to pay off a portion of the original principle.

A consumer proposals allows indviduals to retain control of their assets and avoid bankruptcy to help them deal with their pressing financial issues.
It offers the exact same legal protection as a bankruptcy and can prevent (or stop) an individual from being sued.

If you think you may be a candidate to offer your creditors (the people you owe money to), a proposal, then my suggestion is to contact us right away at 866-747-0660 and book a free consultation with one of our associates. Alternatively, feel free to e-mail us and an associate will respond as soon as possible.

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Sandra Sykora, Trustee in Bankruptcy

My name is Sandra Sykora and I am the Trustee for the 2 Bloor St E and 8 King St E offices in Toronto. As noted by my colleague, Benny Mendlowitz, the Office of the Superintendent in Bankruptcy released the new 2012 threshold amounts or limits for surplus income (the “OSB”).  The OSB releases new allowances every year and typically they only go up marginally.  The new limits for 2012 are no exception.  These allowances are what the government believes people need, based upon family size, for living expenses such as, rent and food.  The allowance does not factor in any amounts needed for debt repayment.  It is really meant for living expenses.   It is a national number so it is meant for all of Canada and is not adjusted for different areas or cities with different costs of living.

I agree, that most people that I see in our Toronto downtown locations, either have no idea about the allowances set by the OSB or what it means that is, the impact it will have on a bankruptcy.   Simply put a bankruptcy is a minimum time of 9 months in which you have duties to complete to then be relieved or discharged from your debts.  One such duty is to report your household income every month and if you make more than the allowance set by the OSB you will pay a portion of it into the bankruptcy.    If your surplus income is consistently over the allowance by $200 every month then the bankruptcy will be extended from the minimum time of 9 months to 21 months.  This is quite the extension.  For most individuals I see in Toronto, they earn above the allowance and have surplus income, which they then must pay a portion of or 50% of it into the bankruptcy.  This payment is an asset that goes to creditors in bankruptcy to reduce the debt or some of the debt you owe to them.  Thus your paycheque to some extent is an asset for the benefit of your creditors.

For many the monthly surplus obligation can be very high.  The response I get from many people I see is;  if they could afford to pay that much each month they would not have to file for bankruptcy.  They could in fact pay their debts.  Thus, for many with a very high surplus obligation, which likely will extend their bankruptcy, they will want to look into filing a consumer proposal whereby they enter into a contract with their creditors to repay a portion of the debt but have 5 years or 60 months and typically the payment plan is more realistic and based upon your budget.  I speak more about this option on our consumer proposal page.

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Anyone who files for bankruptcy in Toronto, Canada must report their monthly income to their trustee. Based on this income level, you may or may not have to pay a portion of the “surplus income” to your creditors. The limit as to how much you can earn before the surplus kicks in is based on your family size. Here are the limits just announced for 2012 (up 2.8% from last year):

Family Size — Limit
1 —————– $1,980
2 —————– $2,465
3 —————– $3,031
4 —————– $3,680
5 —————– $4,174
6 —————– $4,707
7 —————– $5,241

If you would like to see the detailed numbers of how these calculations work, go to our web page on surplus income and bankruptcy in Canada .

99.9% of the people I meet have no idea that these payments are required. If you have a job but cannot manage your debt load, you may wish to consider a consumer proposal as opposed to taking on what can sometimes be very large surplus income obligations that come with a bankruptcy filing.

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When people ask me if bankruptcy is the best option for me, I review the options with them and some factors for them to consider.
Depending on your situation, there may be advantages to filing an assignment in bankruptcy. You could have a nine month bankruptcy and be eligible for your discharge in nine months depending on your income level. By filing an assignment in bankruptcy, you will put to an end the seemingly endless calls from your creditors. If you cannot make arrangements with your creditor(s) and they obtain a garnishee order against you, the only ways that you can have the garnishee removed is to file an assignment in bankruptcy or to file a consumer proposal. Most importantly, a bankruptcy will give you a fresh start in your financial life. If you have accounts in collections, they have taken your credit rating down to the same level as a bankruptcy will. If you cannot pay these debts off within eight years to restore your credit rating, a bankruptcy will restore it faster.
There are disadvantages to filing an assignment in bankruptcy too. Due to your household income and the possibility having to make payments to keep certain assets like a house that has equity, your monthly payments may be more than you can afford. If you cannot make all the required payments by your discharge date, your bankruptcy will be opposed and last much longer. A creditor also has the legal right to oppose your discharge and ask the courts to award partial payment of your debt to the creditors. This will extend the duration of your bankruptcy and in turn it will affect how long your credit rating is affected. A bankruptcy is also a one in a lifetime time solution. Yes there are people who have filed an assignment in bankruptcy more than once. A second filing will result in either two or three years before you are eligible for a discharge and will affect your credit for an additional fourteen years. A third time you have to appear before the registrar before you get a discharge. Finally you are not bondable which is a condition for some types of work and also is a condition for sponsor someone who wants to immigrate to Canada.
So what can you do if in your case the disadvantages are greater than the advantages, you can file a consumer proposal. Often the payments are lower per month than in a bankruptcy. You get to keep all of your assets. And garnishee or legal action has to be stopped. You are bondable, therefore your job status and your ability to sponsor someone will not be affected. Finally the effect on your credit rating will only be for a maximum of eight years. So if a bankruptcy or a consumer proposal is right for you, call Hoyes Michalos and come in for a free consultation to review your situation with one of our professional staff.

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