As a trustee in bankruptcy I see people from many walks of life in our Toronto offices and at the end of our initial meeting most confess they should have come to see us earlier. So when should you talk with a bankruptcy trustee?
My answer would be when the stress of your debts is not letting you sleep at night or enjoy your life and family because you are always worrying about your next payment and where the money is going to come from to pay it. Not very scientific I know, so let’s run through some warning signs.
- having too many credit cards and each is at its limit,
- having collection agencies call at all times of the day and night looking for money and maybe evening calling family and friends
- moving credit card balances each month from one card to another
- refinancing your home and maxing out its value to consolidate debts
- borrowing from family or friends to pay bills or living expenses
- using payday loans to get to the next payday
- constantly putting your bank account in overdraft
- receiving a wage garnishment order.
Once you are in this cycle, the debt seems to grow despite your efforts to reduce the amount owing.
You may not have all the warning signs. Even if you have just one or two it might be a good time to look at your options early enough to have more than one choice for dealing with your debts. You may not have to file for personal bankruptcy. You maybe able to do something else to consolidate your debts such as a consumer proposal.
The first step and hardest step is making the call to Hoyes Michalos and setting up an appointment with on of our Toronto Bankruptcy Trustees for a free consultation to review your options. We only need 30 minutes to get you started on a plan to become debt free.
Questions to ask me at the meeting
When you call or email us, here are some questions you might want to ask.
1. Are all debts included and will all my debts go away?
You do need to include all unsecured debts in either a bankruptcy or a proposal. This means you can deal with credit card debts, bank debts, payday loans, even tax debts. There are a few debts that do not go away or get discharged with a bankruptcy. An example, would be student loans that are less than 7 years old, support payments and fines. We can review your debt when you talk with us so you know exactly what debts you will eliminate by filing.
2. What assets can I keep?
Some assets are exempt from seizure up to certain values. In Ontario, a car worth less then $5,630 will be exempt from seizure. Also furniture and clothing are considered necessities and exempt from seizure. These exemptions fall under the Ontario Executions Act.
3. Does a garnishment stop if I file for bankruptcy or do a proposal?
Yes, a bankruptcy and a consumer proposal are legal processes and most garnishments are stayed or stopped once you sign the paperwork.
4. How does each option affect my credit rating or credit report and how can I rebuild my credit?
Your credit report will be affected for 7 years from the date you sign the bankruptcy or proposal paperwork. However you need to ask yourself how is your credit doing now? Not filing may not improve your credit report any faster. The mandatory counselling sessions and support information we provide during and after your bankruptcy can help you learn to manage your money better and begin to rebuild your credit.
If you’re experiencing financial problems in Toronto, and are looking for a safe way out, talk to one of our Toronto Bankruptcy Trustees for advice. You may not even have to go bankrupt, but we can help you move in the right direction.