Mississauga Ontario Personal Bankruptcy Blog

Has the Cloud lifted?

2008-07-17T17:57:00.003-04:00

It has for some people struggling under student debt load.

Recently the government made changes in the Bankruptcy and Insolvency Act that reduces the waiting period for the discharge of student loan debt from 10 year to 7 years.

For many people who have been burdened with crushing student loans this is very welcome news. No one accepts students loans thinking that they will still be struggling to pay then off many years later but it is a fact that many people are faced with exactly this problem. Life can throw curves and for many people their higher education simply did not pay off as hoped. This can result in overwhelming debt that can lead to wage garnishments, collection actions and deepening stress levels.

Finally for some people who have been waiting for their loans to become dischargable in personal bankruptcy, the wait has been shortened dramatically. In some cases loans only 5 years old can qualify to be discharged with the approval of the court.

If you have student loan debt that you can’t get on top of you owe it to yourself to find out what your options are.
Call 310-PLAN or email us and make an appointment to see me at our Brampton or Mississauga offices, It costs nothing to find out your options.

How Many People Go Bankrupt in Mississuaga Each Year?

2008-02-15T13:04:00.001-05:00

In 2007 there were 1,260 residents of Mississauga that filed personal bankruptcy. In addition, a further 745 Mississauga residents filed a consumer proposal.

The 745 consumer proposals filed in 2007 were the highest number of consumer proposals ever filed in Mississauga, 21% higher than the 618 proposals filed in 2006, and almost double the 480 consumer proposals filed back in 2004.

In contrast, the Mississauga personal bankruptcy rate remained virtually unchanged from the 1,259 personal bankruptcies filed in Mississauga filed in 2006.

Why are proposals increasing while bankruptcy filings remain stable? We believe it is because an increasing number of Mississauga residents want to avoid filing bankruptcy, but they need a way to deal with their debts. For many people, a consumer proposal is the perfect solution.

To find out whether a consumer proposal or a personal bankruptcy is the correct option for you, e-mail our Mississauga office or give our Mississauga office a call at (905) 848-3649 or 310-PLAN (no area code required) if you have any questions, or want to arrange a no-charge initial consultation.

Don't know what to do - bankruptcy if not working?

2007-03-23T11:13:00.001-04:00

Question: I lost my job last July and tried to continue my payments which I was able to do until September. When I realized I was unable to make any more payments I wrote letters to my creditors and told them the situation and that I would resume payments as soon as I could. I have been unable to live up to my obligations. What is the next step? I tried making a small payment of $150 each to MBNA AMEX HBC and SEARS but that has been all that I could do. I believe they have all gone to collection now. What next?

Answer: If your debts have gone to a collection agency, their next step will be to attempt to collect from you, by making phone calls and sending you letters. If they are unable to collect, they may then decide to take you to court and sue you; their goal is to obtain a garnishment order so that they can garnishee your wages.

If you are not working, you do not need to worry about your wages being garnisheed. However, once you return to work, and the creditors find out where you are working, you will need to take action. At that point a bankruptcy may be necessary.

If you are back to work, or expect to be back to work soon, we suggest you contact a trustee to review your options in more detail.

Make a Budget to Start the New Year

2006-12-27T20:05:00.000-05:00

Well it is the end of another year busy year for most of us and the holiday season and all its festivities are almost done. For most, we are a few pounds heavier and our pockets are a few dollars lighter. Now it is time to look forward to a new year and all it brings with it.

One thing I recommend to the people I meet with in Mississauga and Brampton is to sit down and spend some time doing up a plan or budget for the new year. A budget is important as it will help you set goals for such things as a holiday or new sofa that you need.

To start, review what has happened in the past year or at least the past 3 months to determine what you make in a month, that is your take home pay after taxes and how you spend it on food, car payments etc. For most of this information does not change and can be put into a new budget for the new year. Then we add the new things and the increases that are required for things like rent, food and gas for the car. Yes, it is expected that gas prices will once again increase in the summer months so don't forget to make an allowance for this extra cost. If it does not happen then that is a good thing but at least you have tried to budget for it.

I like to do my budget based on my monthly income and expenses. It's just easier to organize and see how much is left over each month or not. Also don’t forget to put money aside each month for the one time expenditures. For instance some people pay their car insurance only one a year. Thus you need to set aside funds each month so that you will be able to make that payment in the month it is required.

Once you have done this budget for each month in the new year you will be able to see if there is a trend toward savings or are you behind each month. If it looks like you will be behind you may want to determine why. Is it because you have credit card payments that are charging a lot of interest and you cannot make the payments and need to decide each month which one will be paid and the ones that will not? Do you have payday loans that you being taken out for at least one pay per month and you never seem to catch up on the payment? Are you borrowing from friends and family to get to the end of each month?

If this sounds like you then these are some red flags that may mean you have some financial difficulties to deal with. This is where we at Hoyes Michalos & Associates will be able to assist you. We can provide you with all the options available for dealing with your debts. Personal bankruptcy may not be the only option. You may be able to do a consumer proposal. Or you may be able to see your bank about a debt consolidation loan. To understand all your options and have as many as possible available to you, usually means starting as early as possible. So give us a call at 310-PLAN or in Mississauga at (905) 848-3649 and we can set up an appointment for you to see one of our trustees at a location that is convenient for you. This meeting is a free consultation and we will review all the options and allow you to make the choice that's right for you.

Worried

2006-12-13T19:37:00.000-05:00

My husband and I filed bankruptcy about a year and a half ago. It was discharged in July 2005. We included our car loans, however we continued to make payments. About two months ago my husband decided to buy a new truck and the dealership told him that his current truck was discharged and that he didn't need to trade it in, all he had to do was walk away from it. The debt showed as discharged on our credit report. However, Toyota Finance Corp sent a confusing letter saying they we either owe 2K to get the truck back or they will sell it & we owe the defficiency. Can this really happen if the debt was discharged in the bankruptcy? Help I don't know where to turn for answers.

If you fail to plan you plan to fail

2006-11-14T10:51:00.000-05:00

Often when I meet with clients at our Brampton and Mississauga offices we end up discussing "what went wrong". In many cases some unforeseen event has caused financial trouble to become unbearable. Divorce, job loss, injury or illness can all cause our finances for come apart.
Sometimes I meet people who run into trouble just because they don't have a plan. Keeping tabs on expenses is not exciting, certainly not as much fun as going shopping, or going out, but it is a necessary part of financial health.

If you think that your finances may be a little out of control. If you don't seem to have enough money to pay all your bills on time. Its time to make a plan, if you take control early enough you can get back to financial health by sticking to your plan. If things seem to be out of your hands then you may need some help. Give us a call we can help you to make a plan that can get you a financial reset and get you debt free, often without bankruptcy. Call 310-PLAN today and take control of your future!

ARRG! they called again!-Dealing with Collection Agencies

2006-10-19T18:08:00.000-04:00

Collection Agencies are a necessary service in the realm of finance. When bills go unpaid companies can't afford to get bogged down in following up on unpaid accounts. This is where the "Bill Collectors" come in. Sometimes companies will sell their unpaid accounts to the Collection Agency for an amount less than the amount owing. This way the company gets paid a portion of the bill. Now the collection agency is 100% responsible to collect the debt. If they want to make any money on the debt they bought the have to collect as much as possible as fast as possible. In other cases collection is contracted out to collections agencies and they are paid a commission on the amounts collected. To say that collection agents are "highly motivated" is an understatement.

Individual collectors are paid a commission on the dollar value they collect. Every aspect of the collections agency behavior is devoted to getting the money.
This can result in some very aggressive behavior as the agents work the phones to get the money, it is a tough job, and it takes a special personality to do it with compassion.
If you are on the receiving end of the collection agent's efforts it can be difficult to realize that the person you are talking to is just trying to pay their own bills, and for them to do that you have to pay yours.

Regardless, there are rules for what can and can't be done by collections agents to collect bills. Those rules were tightened on June 1 2006. If you are having trouble paying your bills and they have been placed with a collection agency you should know those rules so that you can be certain that who you are dealing with is sticking to them. Some of the most important elements of the new rules are guidelines for how often collectors can contact you. They can't contact you more than 3 times in any 7 day period. There are very clear rules about collectors calling your work or other members of your family. They can only call once to confirm your employment, they can only call your family to ask for your address or phone number. They can't give false or misleading information to anyone nor can they use threatening, profane, intimidating or coercive language, neither can they use undue, excessive or unreasonable pressure. As the one receiving the call you are the judge of whether a collections agent is doing any of the things they are not supposed to.

The thing about Collection Agencies is they won't stop or go away, and they will escalate their efforts if you don't respond, including going to court to get an order to take some of your wages. If you have to deal with collectors, be upfront with them, tell them what you can and can't do, don’t be bullied into agreeing to do anything you are not certain you can handle. Keep the interactions professional, but keep the lines of communication open. Most collectors are willing to work with you if you show you are willing to work with them.

If it is all too much and you know you can't solve the problems yourself, call 310-PLAN to talk to a trustee. You have options and you owe it to yourself to make sure you know all your options.

Trouble on the way?

2006-09-05T16:57:00.000-04:00

Warning sign!
Beyond lies financial trouble!

When meeting with clients at our Mississauga or Brampton offices I often see trends in the situations presented by people who have run into financial trouble.

Here are some of the most common warning signs that you are heading towards a financial crisis. If any of these things are happening to you, you need to take action now.

1.You are often into your overdraft on your main account, or in extreme cases you are always working below the zero line, and only catch up when your pay is deposited.

2.You have to get short term loans at "payday advance" or "cash stores" to pay your bills.

3.You can no longer approach your bank for credit and must go to high interest lenders to finance cars or for consolidation loans.

4.You have more than one credit card that is carrying a balance and you use one to pay the other.

5.You have no reserve, no savings of any kind, any interruption of your income would trigger a financial crisis after only a week or two.

6. Utility bills like electricity or gas are into arrears and are threatening to shut off services.

7. Collection action is affecting you. Phone calls and letters from collection agencies are hounding you.

8. Stress about money is affecting your relationships and your wellbeing, you can't sleep, you get into arguments about money.

If any of these warning signs are familiar you may be heading towards trouble. Taking action now may head off a crisis. Maybe all you need is to reduce expenses and stick to a careful budget. Maybe you need professional help. If you are dealing with any of the warning signs above call 310-PLAN and speak to a trustee today we can help you get back on track.

What happens after my bankruptcy is over?

2006-08-11T11:37:00.000-04:00

When meeting with clients in both our Mississauga and Brampton offices, I am often asked what happens after my bankruptcy is over? What do I do next?

If you have never been bankrupt before the minimum time set by the court to be bankrupt is 9 months. This means that the court will give you relief from your debts in 9 months provided all is order and your duties as a bankrupt are completed. The result is the debts you had in your bankruptcy are discharged and you will get a fresh start. There are certain debts or special debts that you will not be discharged from such as, student loans less then 10 years old, child support payments and any fines or penalties.

Once the bankruptcy is completed the trustee will send you an original of your discharge certificate. The discharge date will be added to your credit report and there will be a footnote in the legal section indicating when your bankruptcy started and when it was done. So when new creditors do a credit check they will see the footnote and know that your bankruptcy is completed.

Now it is time to start to rebuild your credit. It is like taking baby steps. Usually the first step is the get a secured credit card. This means you will have to save some money to put a deposit down on a credit card. The credit card company will allow you to use the card up to the amount of the deposit you provided. This will start to rebuild your credit rating as you are paying off the debt each month in order to be able to use the card. Generally, the next step is to get a small loan or car loan and repay it. Again making payments on time and not missing any will rebuild your credit rating. In this way, creditors regain confidence in your ability to pay your debts and will begin to extend credit to you.

For most the purchase of a home is the biggest purchase they will make in their lifetime. This is usually the last step in rebuilding your credit, as it is such a large purchase. You will want to have a good down payment and you may have to shop around for a good mortgage but it can be done.

So don’t be afraid of starting to rebuild your credit after bankruptcy. You just need to budget and use it wisely.

To get your plan started, please contact the Hoyes Michalos office nearest to you and one of our professional staff will meet with you personally to help get a fresh start.

2006-08-10T10:03:00.000-04:00

I have lost my Job.. I can't pay my bills! What should I do?

Don't Panic! Make a Plan!

Job loss can be one of the most difficult of life's challenges. Practically all of us plan and build our lives around our income. We need the constant influx of cash to keep everything going. When that cash-flow reduces or stops it does not take long for things to start to unravel.
When job loss happens, the first thing to do is make a plan. It is all well and good to presume that you will get another job right away, but it does not always happen.
Reducing expenses and careful budgeting should allow you to weather the storm if you take action as soon as the job loss happens.
Avoid making up the cash-flow shortfall with credit. When an employment interruption happens we can't carry on as if nothing has happened. Continuing to use credit with less or no money coming in to service the debt will result in a big problem in short order.

I see people all the time in our Brampton office who have been maintaining their fully employed lifestyle while unemployed by using credit. All too often the amount of debt generated during the period of unemployment is too great to be paid off even when they get back to work.

No one plans to loose their job, but a little forethought can go a long way to reducing the stress of an interruption of income. Put a little of your income away every pay and build a reserve fund for emergencies. It does not really matter how much as long as you do it with every pay, put the money in a separate savings account and forget about it. You will be surprised how quickly it builds up to a very useful cushion that will give you a bit of breathing room when something happens to your income.

If you have suffered a job loss and have accumulated debts that are causing you trouble call 310-PLAN to talk to a trustee about your options today. We can help you make a plan to get you back on track.

I need my car to go to work. Will I lose it in a Bankruptcy?

2006-07-28T12:29:00.000-04:00

Most of us have a car that we require to get back and forth to work. We consider it a necessity in order to make a living. I find this to be the case for many of the people that I meet with in our Mississauga and Brampton offices.

When making an assignment into bankruptcy you are required by law to surrender all your assets to your trustee who will distribute proceeds from the sale of the assets to your creditors. There are some assets that are exempt from seizure. Each province has different exemptions.
In Ontario, the exemptions are governed by the Ontario Execution Act (the "Act"). The Act has changed over the years regarding how a motor vehicle will be treated in a bankruptcy situation and also the amount of the exemption.

Presently, a motor vehicle worth up to $5,650 is exempt from seizure in a bankruptcy. This change in the exemption amount occurred on December 14, 2005.

Up until June 22, 2006, the problem that arose was if the motor vehicle was worth more then the exemption amount, by even one dollar, it was no longer exempt property. Thus, you were required to turn the asset over to the trustee for the benefit of your creditors or you had to pay the full value of the vehicle to the trustee to keep it. For most individuals thinking of filing for bankruptcy, this seemed very unfair.

On June 22, 2006, the Ontario government saw the error of this law and revised the Act. The Act now allows a car to be exempt from seizure provided it is worth less than $5,650. This has not changed. However, if the car is appraised or valued at an amount higher then the exemption amount, it no longer losses its exemption status completely. Now the trustee can sell its "interest" in the car which is the amount over the exemption less any selling costs or the bankrupt can buy back the trustee's interest so that he or she can keep the car. For example, if the car is appraised or valued at $6,650 at the time of bankruptcy, the trustee's interest for the creditors is the difference between the appraised value of $6,650 and the exemption amount of $5,650, which is $1,000. The bankrupt can repurchase the trustee's interest of $1,000 in order to retain the car. Or the trustee can sell the car and will only keep the amount over the exemption amount. The bankrupt will get up to the exemption amount $5,650.

I have debts from my business; what is personal debt v. company debt?

2006-07-25T15:31:00.000-04:00

Often times I meet with people in our Mississauga or Brampton offices who want options regarding their debts. Many times these options are not only with respect to personal debts but with debts that relate to a business they have or once had. This usually leads to the question; what debts from a business will you be personally responsible for?

The answer depends on what type of business you had. Was it a sole proprietorship or an incorporated company where you were an officer and director?

In the case of a sole proprietorship, there is no distinction between your personal debts and those of the business. The debts are all yours personally and you will have to deal with them along with your personal debts.

In the case of an incorporated company, the debts from the business are the company’s debts and not yours personally unless you personally guaranteed the debt for the company. For instance, a lease for a location the business operates from. The other exception is debts of the company that officers and directors of the company are responsible for. For instance, employee claims for wages and also certain government taxes such as, GST and PST. Generally, as an officer and director of a company you will be responsible for these debts personally and will need to include them with your personal debts when making a plan for dealing with all your debts.

If you find yourself with business debts and personal debts that are overwhelming and are uncertain about your financial options and want advice on dealing with your debts, please contact the Hoyes Michalos office near you, and one of our professionals will meet with you personally to help you make a plan to deal with your debts.

How can I decide what is best for me?

2006-07-17T11:31:00.000-04:00

Often, when I am meeting people to discuss their money problems, I find out that we are the last place they come to for help. This is not really surprising as coming to a trustee to get help to resolve your debts is pretty much the final solution to money problems. Most people are confused about what their options are and what makes sense for them.

In order to come to some plan to resolve your problems there are certain factors that have to be considered. How these factors relate to each other will determine your best course of action. The factors are.

1.How much you owe, and to whom and for what?

2.What you own that could be turned into money, and how much money it could be turned into, and do you want to keep some or all of this stuff?

3.How much income comes into the household every month?

4.How much do you spend each month just to pay your living expenses?

The first factor is important because not all debts can be resolved by bankruptcy. Student loans less than 10 years old, Co-signed debts, fines and restitution orders for example can’t be discharged in most cases.

The second factor indicates what you own, if you own little but can’t pay your debts, then likely bankruptcy is an option worth looking at. If you own a house, cars and investments like RRSPs that you want to keep then perhaps a Proposal would be a better option. Often filing a proposal will allow you to keep your house and the other things you own while still resolving your debt problems.

The third factor is important in that the amount that a bankruptcy will cost you is tied to the amount of money coming into the household. If you have a good income coming in then bankruptcy may be expensive, again a proposal may be a better option. A proposal will cost you more in the long run, but you can pay the proposal amount out over a longer term, allowing it to fit in the budget better.

The final factor indicates how much money is available to put towards resolving your problems. If you are spending more than you make just paying for your basic expenses before servicing you debts, a proposal won’t work for you, you have to show how you can afford to pay for it before the people you owe money to will accept the deal. In this case filing bankruptcy combined with tough budgeting will enable you to get your fresh start.

If you have questions about what you should do call 310-PLAN and one of our trustees will review your situation and help you come up with a plan.

I have money problems, where do I start?

2006-07-05T15:55:00.000-04:00

When meeting with clients I have often found that the solution to their problem is very clear to me, being on the outside looking in. However for our clients, deeply involved in the day to day struggle with their debt, there seems to be no solution. Managing money is not a skill we are born with, we have to learn, and often we have to learn the hard way, by making mistakes and recovering from them. Everyone deals with money problems at some point in their life. Taking action and making a plan to deal with the problem early is critical.

In many cases the financial trouble can be weathered with a combination of "belt tightening" and effective budgeting, sometimes this may be accompanied with re-financing and consolidation of your debt through your bank. This is where the solution to any financial problem should start, with you taking control and making a plan. If this does not work then you may need some help to recover.

Sometimes all you need is a little help getting your budget under control. In these cases a credit counselor can help, if necessary they can negotiate with your creditors and arrange payment terms that you can handle typically with interest relief and extended payment terms. Such schemes are known as Debt Management Plans and are very helpful for clearing away smaller accumulated debts. In addition you can select which debts you want to make part of the plan allowing for much greater flexibility than a formal filing with a Trustee.

If you have tried both of these approaches, and you are still in trouble, then you may need the help of a Trustee to get things back under control.

If you are dealing with money problems and don't know what to do call us at 310-PLAN to speak to a Trustee today. Even if it turns out you don't need a trustee, we can help you figure out a solution to your money problems.

Will the people I owe money to take all my things?

2006-06-16T13:45:00.000-04:00

One of the most common questions I get asked when I meet with people; is will someone come to my home and take all my furniture and belongings if I go bankrupt?

This question comes up as you assign or surrender everything you own to a trustee in bankruptcy, in exchange for relief from your debts. The trustee would then sell your assets to recover funds to repay your creditors or the people you owe money to.

However under Ontario Law certain things are exempt from seizure by a trustee.

So basically, the answer is No. Most provinces have exemptions and in Ontario where I practice there is an Executions Act that prevents assets or things you own under a certain value from being taken and sold in a bankruptcy or a proposal.

For instance, your household furnishings valued at less then $11,300, personal belongings such as, clothing and jewelry valued at less then $5,650 and a car worth less then $5,650. The values are not based upon replacement values but on a liquidation value if you were to sell it at auction. In most cases people do not have household furnishings or personal items worth more then the exemptions unless they have antiques. In the case of a car an appraisal of the vehicle will usually determine the value and if it is exempt. You can discuss the best way to deal with a car when you meet with your trustee.

So don’t worry, when filing for bankruptcy you will most likely not lose everything and will be able to keep personal belongings and your household items.

We would like to help you get a fresh start ...

2006-06-15T17:22:00.000-04:00

My name is Sandra Sykora and I am a trustee in bankruptcy with Hoyes Michalos & Associates Inc., and I am responsible for our Mississauga Office. Our Mississauga office is located at 2 Robert Speck Parkway, 7th Floor, at the south east corner of Hurontario and Robert Speck Parkway (across from the Square One Shopping Mall, and just south of Highway 403).

I have been working in bankruptcy for nearly 20 years and have extensive experience working with people and dealing with their debts.

If you are feeling overwhelmed by your debts, please contact our office at 310-PLAN and make an appointment to see me. This meeting is a free consultation and takes about an hour. I will need a list of the people you owe money to and monthly budget that includes your take home pay and how and what you spend it on. We will review all options and come up with a plan that will work for you and give you a fresh start.

Looking for a Fresh Start?

2006-05-11T11:06:00.000-04:00

Many people that we see at Hoyes- Michalos and Associates come to us at the point when they are faced with few choices. Their financial problems have become too large to handle, they are facing the proverbial "mountain of debt". When people find themselves in this position, usually they can identify the event that triggered their troubles and they can see how it all happened. It could be a job loss, illness, accident or other significant event. More often than not it was an unforeseen event that they had little control over. When you look back you simply can't dwell on what has happened you have to look forward and make a plan.

The decision to seek help is a big one filled with many emotional factors, anger, guilt, frustration, embarrassment and despair are all natural and normal reactions to coming to terms with being unable to pay your bills. The good news is that the problem can be fixed, there are remedies available to enable people faced with such problems to recover and continue on with the business of living.

If you find yourself unable to pay your bills, don't wait untill you face that "mountain of debt" research your options before you are out of options. This site has plenty of information useful to anyone facing financial difficulties and if you have more questions professional help is only phone call away, you can arrange a meeting with any one of our Trustees by calling 310- PLAN

Don't wait until you run out of options, make a plan today.

All Debts Included and Credit Cards to be Surrendered

2006-05-01T16:14:00.000-04:00

When I meet with people in our Mississauga office, I am often asked if they need to include all the people they owe money to, including family and friends and also if they can keep a credit card.

The answer is a simple one. You need to include all debts in a proposal or a bankruptcy. Both are formal proceedings that allow you to get a fresh start from all debt so you will want to include all the people you owe money to in order to get that fresh start. There is little point "cherry picking" and being potentially stuck with a debt after you have completed the bankruptcy or proposal. Including debts to friends and/or family is difficult, however, it could potentially be more difficult down the road if you have excluded them and there is a falling out between the parties. You do not want to be responsible for the debt after you have completed your bankruptcy or proposal because you deliberately excluded someone.

As for keeping a credit card, I get asked this question most often if people have points they have accumulated on the card and they owe no money on the card at the time of the bankruptcy or proposal. Credit cards, the actual card itself, is the property of the credit card company that issued it to you and it needs to be returned to that credit card company when you file for bankruptcy or a proposal. So unfortunately, even with points and no balance, the card needs to be returned.