Mississauga welcomes a lot of newcomers to Canada. While many people chose to settle in the Greater Toronto Area, downtown Toronto housing prices often push people to the West and they end up settling in Mississauga.
Mississauga is a vibrant community and an economic center for manufacturing and transportation. There are jobs for those newly arrived to Canada and many people have done very well in this community. They bought houses and cars, had children and have contributed to the economic success of Mississauga.
But things don’t always work out as planned and often people find themselves in financial stress.
I would like to relate a story about a couple I helped in Mississauga and how personal bankruptcy forms an important part of financial recovery. I’ll call our couple “Ahmed” and “Noora” though these are not their real names, of course.
Ahmed and Noora’s story is typical. They came to Canada when they were young, eventually met each other, got married and had 2 children, 2 cars, purchased a home and secured some modest investments. Everything was going the way it was supposed to. Noora worked part time in a local bank, she had a secure job, but the pay was not high. Ahmed worked in a mid-sized manufacturing company that serviced the auto industry. He was a skilled worker and made a good living. Often his income was augmented by ample overtime so they were doing pretty well.
Then the recession hit. Manufacturing jobs in Mississauga were hit particularly hard. Orders at Ahmed’s employer dropped. First it was the over time that was cut, then his hours. At the beginning both Ahmed and Noora felt it would be a temporary setback. They borrowed on their line of credit to make up the shortfall in income, believing that once the hours came back they would have no trouble repaying the money borrowed. Eventually their line of credit was maxed out so they began using their credit cards to make ends meet. Unfortunately, Ahmed’s hours were just not coming back. Ahmed went to work one day to find that the doors to the shop were locked, the company had closed up, it was bankrupt. Ahmed was out of a job.
At this point the amount of debt they had accumulated to keep things afloat was over $50,000 and their ability to pay was gone. They tried a few things on their own to deal with their overwhelming debt load and keep things going.
One of their cars had been recently purchased and financed, and they could not afford the payments. Since Noora could walk to work they could get along with one car. They decided to surrender this car back to the dealer, who sold it and then presented them with a shortfall on the car loan of $12,000. Their debt ballooned to $62,000 I assured them that this was not a problem, we could deal with this debt as well.
They looked into selling their home. They had just purchased it a year earlier with a minimum down payment, and the home had no equity. The market had taken a bit of a hit as well due to so many homes coming onto the market. Selling the home would probably have resulted in a $20,000 shortfall, adding even more to their debt, not solving anything.
At this point things went from bad to worse. Some of their debt was referred into collections and the collectors were calling every day, three times a day. They were at their wit’s end and really worried about losing their home.
They were looking for help. Some friends offered to set them up with a debt consultant who promised them quick fixes but none of it sounded right to them. Noora did some research on the internet, found the Hoyes.com website and they called me. We spoke on the phone and they decided to come in for a free consultation.
I met with both Noora and Ahmed in person, after hours so Noora did not have to take any time off of work. We went through their situation in detail. With Noora’s job and Ahmed’s EI and the child tax benefits they were receiving, they could pay their mortgage and keep a car on the road, feed and clothe everyone, but they had no money to service their debt, let alone repay it.
When we reviewed their options both Ahmed and Noora wanted to file a consumer proposal. When we worked the numbers, considering that Ahmed was on EI at the time and employment prospects did not look good at all due to the recession it was clear that proceeding with a joint bankruptcy was the appropriate solution. Bankruptcy costs would be low and affordable. As this was the first time they had ever been in financial trouble the term of their bankruptcy was short, just 9 months. For them, it was the right choice.
We proceeded with their bankruptcy filing. Over the course of the bankruptcy Ahmed applied for and was accepted in the second career program and received job retraining refocusing his skills to the market. Their bankruptcy progressed with no complications and 9 months later Ahmed and Noora were discharged from bankruptcy. They were able to retain their home and even the RRSPs that they had saved up in the years before the recession hit.
Today, Ahmed and Noora are debt free. Ahmed is back to work in a new career that pays as well as his old job. Noora is now working full time with the bank and they are putting money away for their children’s education. They have told me that filing for bankruptcy was the best decision they could have made. They had never wanted to do it, and never thought that they would have to, but they were very happy that they could and are in a far better position financially today than they were even before the recession hit. For them bankruptcy worked exactly as it is intended, as a means to get a fresh start.
I help many people just like Ahmed and Noora get a fresh start and to recover from financial problems. I’m certain I can help you too.