The Office of the Superintendent of Bankruptcies released the 2011 third quarter results today. If you like you can look at them at this  LINK Overall we can see a continued trend.

Bankruptcy filings are down from 2010 and trending down throughout 2011.  This is not really surprising as the economy continues a slow recovery from the 2008-2009 recession when bankruptcy filings reached a peak. More and more people are getting back to work, things are getting better for many people.

Another interesting trend is the continued increase in people choosing to file ConsumerProposals rather than filing for bankruptcy.

In the Toronto region Bankruptcy filings are down 25% over 2010  but Consumer Proposal filings are up over 3% over 2010 numbers.  In some parts of Ontario, the numbers are more striking, In Hamilton for example bankruptcies are down by 25% but Proposal filings are up by nearly 30%!

I think that this is due to a combination of reasons, foremost, people are learning more about Consumer Proposals, Trustees ( particularly HoyesMichalos & AssociatesInc.) are working hard to get the word out about Proposals. In addition legislative changes in 2009 to the bankruptcy and Insolvency Act made Proposals a much more viable solution for dealing with debt than they used to be compared to Bankruptcy.

In general these numbers give us insight to 2 things. first, the overall numbers of people needing to file bankruptcy or proposals is down from 2010.  Second, more and more people are avoiding bankruptcy by filing a ConsumerProposal to deal with their debt.

Although filings are trending downward, which is good news, we have not seen filings reduce to pre-recession levels. Clearly there are still a lot of people who need help dealing with their debt.

If you are struggling with debt, take some time and call us, we can help you get a fresh start, and finally put you on the road to debt freedom.

Call 310 PLAN ( 7526)  ir click on www.hoyes.com and lets get started

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Howlongisbankruptcy?

Most of the people I meet in my Mississaugaoffice have some pretty significant misconceptions about the bankruptcy process. This is not surprising as for most of them they have never needed to know anything about bankruptcy, until now.

Many people say that they “heard from a friend” that  “bankruptcy is 7 years”. Frankly there is a lot of misinformation out there. Some of it is even put out there by “DebtConsultants” to confuse the issue and get people to sign up with them in expensive and doomed settlement agreements.

so what is the real story?

For most people for whom bankruptcy is a viable option for dealing with their debt the process takes 9 months to complete.  Some people who have higher incomes the process can be extended out to 21 months to enable more money to be collected for the creditors, The cost of bankruptcy and how surplus income works I wrote about earlier this month you can find that post here . If you have been bankrupt before, the process is longer automatically, 24 to 36 months depending on your income.

So where does the 7 year thing come from?

After you finish the bankruptcy say in 9 months, there will be a footnote entered on your credit report indicating when you filed for bankruptcy and the date you finished. This record stays on the report for 6 years. So 9 months plus 6 years is pretty close to 7 years.

For many people who have too much debt and yet have a decent income, a bankruptcy is not the best option, for these people often a ConsumerProposal is the right solution for dealing with their debt.

If you have too much debt and need help dealing with it give us a call at 310 -PLAN ( 7526)

or click on www.hoyes.com and lets get started.

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Many of the people I talk to each day in my Mississauga office start the conversation with “ so how does this work?”

For most people considering filing for bankruptcy has been a long road, and not at all easy. Often a lot of very bad things have happened along the way to bring you to the point that filing for bankruptcy is a consideration.  The good news is, making the decision to go see a trustee is probably the hardest part of the process. Everything else is easy.

The procedure for filing is not all that complex, you do need to engage a licensed trustee in bankruptcy to proceed, only a licensed Trustee can file a bankruptcy for you. Also the paperwork required is not difficult to prepare, and your trustee will help you so you don’t need a “debt Consultant” to do this for you, save your money and see a trustee directly.

This link will take you to a site that goes through the details of what you need and what you can expect as you go through the process.

Another thing that many people don’t know is that most people who think they need to file a bankruptcy end up not doing so. Most people after they talk to a Trustee in Bankruptcy end up not filing for bankruptcy and do a Consumer Proposal instead.  A ConsumerProposal allows you to deal with your debt without bankruptcy, and is fast becoming the preferred method of dealing with debt in Canada.

If you have too much debt, and too many questions about what you can do about it, Call us we can help you make a plan the works for you. Initial consultations are free.

Call 310-PLAN ( 7526) or click on www.hoyes.com  and lets get started.

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This time of year there are a lot of changes going on. Fall is turning to winter, and people are getting ready to settle in.  The clocks are falling back, which is sure sign that winter is ‘round the corner.

I cut my lawn last week, probably for the last time this year, soon I expect things will be covered in snow.

It’s a seasonal fresh start, things have to die off and spend a bit of time dormant, before fresh life can spring forth when the weather warms in the spring.

A lot of the people I talk to every day in Mississauga are looking for a fresh start as well.  Many people have had periods of unemployment, or wage reductions and they have struggled to adjust.  Often they have accumulated too much debt during the adjustment, and they need to get out from under it.  They need a financial fresh start.

Fortunately we can help, Hoyes-Michalos founders Doug Hoyes and Ted Michalos have written a book that outlines how you can go about getting your fresh start. youcanfindthebookhere

It’s filled with information about various ways to deal with debt and helpful tips on making the best of a bad situation.

At some point in everyone’s life a Fresh Start is exactly whats called for. Every winter is followed by spring.

If you need some help dealing with your debt, and getting your fresh start,  click on the link above and find out more. then call us at 310-PLAN ( 7526 ) or click on www.hoyes.com and lets get started.

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Will I be able to purchase a house after one year’s bankruptcy?

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My house is registered under my spouses name only. If I file for personal bankruptcy will it still be calculated in my equity by the trustee? Is it possible that we would still lose the house?

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To file of not to file , that is the TAX question.

Tax filing season is hard on us, the personal filing deadline is past.

I meet with a lot of people in my Mississauga office who have Tax problems, most of them presume that amounts owing to Canada Revenue Agency can’t  be included in a Proposal or  Bankruptcy filing.

I’m not sure where that idea came from, but it’s not true. Income Taxes don’t enjoy any special protection and are dealt with as any other kind of unsecured debt. You CAN INCLUDE tax debt in your “get out of debt plan”.

I also met with a lot of people who have not filed income taxes in a few years ( the record was 22 years for one fellow I helped)

Sometimes people just don’t “get around to it” but often people decide not to file because they know that they will have TAX DEBT that they can’t manage, So they just stop filing.

Sometimes they have amounts owing to the Government for things like Student Loans and Tax refunds are being set off against those debts.

This is not a winning strategy , under the Income Tax Act, not filing a return is an offense. Owing money that remains unpaid is not. The CRA is much more likely to take harsh collections actions such as garnishment in a non filing situation than in a filing but not paying situation.

File your taxes, find out what you owe, and then if it’s too much when taken with your other debt, at least you have the full picture and can then decide what to do about the whole debt problem including Income Tax debt.

Most of the people I help NEVER file a bankruptcy to deal with their debts. For most people their debt can be dealt with by offering a Consumer Proposal to all their creditors including the CRA.

If you are dealing with Debts including TAXES call us today at 310-PLAN ( 7526 )  or click on www.hoyes.com . and lets get started on your get out of debt plan.

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Stands back from the keyboard in amazmeent! Thanks!

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Thinking of Bankruptcy in Mississauga?

Do you know who you are dealing with?

Check any local or commuter newspaper and you will find ads placed by “Debt Counselling Services”  or “Debt Consultants”.

They claim to be able to make you “debt free without Bankruptcy”  or to “settle your debts for less than half what you owe”. Some claim to “work for you” while claiming Trustees “don’t work for you”. Who are these people and can they really back up their claims?

The answer is a resounding NO! Well except for the claim that Trustee’s don’t work for you, that is true. Trustees in Bankruptcy are officers of the court licensed by the federal government to facilitate the filing of Bankruptcies and the administration of Proposals. Trustees don’t work for your creditors either. They are independent impartial facilitators who’s only role in the process is to ensure that everyone is treated reasonably and fairly.  The fees charged by trustees are regulated by the law under which they operate. Initial Consultations with Trustees are usually free and if it turns out that you don’t need their services trustees are bound by the law to tell you. You don’t need to worry about “ending up bankrupt” if you don’t need to.

Lets contrast this with the so called “Debt Counsellors”

Who regulates their operations?  No-one, they operate without oversight of any kind.

Who do they work for?  Themselves, they are independent business people who charge fees for services.

Who sets the fees that they charge?  They do, and they can charge whatever they think they can get away with.

What services do they provide?  Principally they are a referral service, they operate as a client gathering mechanism for Trustees who don’t mind if their clients , who are clearly under financial distress, end up paying unnecessary fees to intermediaries that perform no necessary service.

Are they necessary?  Not at all, why pay someone to introduce you to a Trustee when you can simply call one up direct and meet with them at no charge to discuss you situation.

Is it legal?  yes absolutely, these companies are not doing anything illegal. There is no law against duping people into paying for things that they don’t need.  The principle of Caveat Emptor  or let the buyer beware applies.

If it’s not necessary and costs already distressed people unnecessary expense why do trustees deal with these companies and accept referrals from them?

That is a good question that has no satisfactory answer. In some cases these “consultants” operate within ethnic communities that have a tradition of “fixers” connecting clients and professionals. In these cases Consultants may provide a legitimate service in bridging cultures and language barriers. However in the vast majority of situations their services are not necessary.

An analogy to this process is you wanting to go buy a car but having to pay someone to tell you where the dealership is. Which makes sense if the location is a closely guarded secret, but it’s not.  Trustees in Bankruptcy advertise openly in the public media you don’t have to pay someone to introduce you.  Paying a person for information that is freely available is unnecessary.

Don’t be fooled by unscrupulous operators looking to skim off some of your already stretched dollars. Make certain you are dealing with a Licensed Trustee in Bankruptcy.

Dealing with a Trustee does not mean you will be filing a bankruptcy, most people can resolve their debt without bankruptcy by filing a Consumer Proposal and re-paying a portion of their debt in one easy to afford monthly payment.  Only a Licensed Trustee in Bankruptcy can help you file a proposal.

At Hoyes Michalos and Associates Inc. we refuse to have anything to do with unnecessary intermediary debt consultants we don’t use them and we don’t support their presence in the marketplace. We just think that  is the right way to deal with people, direct and without unnecessary hidden fees.

If you are having debt problems Call us, we can help.  310-PLAN (7526)

or click www.hoyes.com

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Many of the people I meet with every day at my Mississauga office often say “they never thought they would be in a situation like this”

Everyone at some point deals with financial problems in their life, it turns out that they typical person who may reach out for help to a Trustee in Bankruptcy looks a lot like your average Canadian.

A recent study entitled “Joe Debtor : the face of bankruptcy” completed by Doug Hoyes and Ted Michalos the founders of Hoyes Michalos & Associates Inc. indicates that the typical person who files for Bankruptcy or files a Consumer Proposal is exactly that , a typical person. The study shows that anyone can run into hardship, but it also shows some trends that are worth noting.

This 2011 study updated a similar study completed in 2007 by Hoyes Michalos & Associates Inc. In the intervening 4 years there has been some changes. We have come through a recession and the rules and regulations governing Bankruptcy in Canada have also undergone some revisions that has had an impact on the face of bankruptcy in Canada.

Some of the trends indicated in the study illustrate the changing face of debt in Canada.

The amount of debt held by people that file is going up, The number of people burdened by student loan debt is also increasing and women are increasingly the ones burdened the most by crushing student loan debt.

Most worrying is the trend of people carrying too much debt being older and retired persons and the amount of their debt being often much higher than the average.

All of these trends come together to illustrate that on average Canadians are carrying more debt than ever and are struggling with that debt well into their retirement years.

Also indicated in the study is a growing trend for people to deal with their debt by filing a Consumer Proposal rather than going Bankrupt. This trend is being driven by 2 factors, changes in legislation that made bankruptcy both longer and more expensive and the fact that many people burdened with too much debt, none the less have reasonable income and often own assets that they wish to preserve. Both of these factors make a Consumer Proposal a more effective remedy for dealing with debt than Bankruptcy.

If you can see some of yourself in “Joe Debtor”  You owe it to yourself to find out what options are available to deal with your debt. We can help call us at 310-PLAN or visit www.hoyes.com and lets get started.

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