Archive for the ‘Uncategorized’ Category

It’s that time of the year again when everyone starts thinking about taxes. Maybe you just received your T4, Maybe you are self employed and you know your annual tax nightmare is about to start.

What about the house?

I had the pleasure of sitting down with Tom Robic of RE/MAX real estate this morning. Tom was interested in learning more about the insolvency process and how it could affect his clients with respect to buying or selling their homes.

What about my house ? is easily the most asked question when I meet with people to discuss their debt problems. For many people it is possible for them to resolve their debt and keep their homes by offering a consumer proposal to their creditors. For other people selling their home and using the proceeds to offer a lump sum proposal will work to eliminate debt. For some selling and downsizing to a home they can afford and freeing up cash flow to offer a proposal to their creditors is the solution. None of these solutions involve the dreaded BANKRUPTCY .

Far too often people come to see me too late. Dealing with debt is like any developing problem, early intervention is the key to a successful resolution.

Tom asked me a good question, “When should people come to see a bankruptcy trustee?” My answer was “As soon as they start to run into trouble” If this was a health issue, people go see their doctor as soon as symptoms appear that are affecting their quality of life. The same is true for your financial health. When it come s to helping people deal with their debt, I’d rather be the surgeon than the undertaker.

If you have debt problems starting to affect your quality of life you owe it to yourself to find out your options. It may turn out that you can fix the problem yourself with a little help.

Call 310-PLAN today to make an appointment to see me for a free no obligation consultation.

Ill help you make sense of your options and decide what is best for you to do for you and your family.

Debt problems are a family affair

When I meet people at my Mississauga or Brampton office they are often embarrassed and ashamed of their situation. No one likes to deal with debt problems, people like to tell other people about their debt problems even less. I’ve become accustomed to being “the last person” anyone wants to come see.

Debt problems often remain a secret until the problem becomes so large it can’t be hidden any more. Very often Families with children will do everything they can to insulate the children from their debt problems.

Except in the case of very young children who lack the ability to understand financial troubles, I firmly believe that children can benefit directly from being “clued in” to the financial problems you are facing. . Particularly when teenage children are involved, I believe that it is very important for parents to share with their children the problems facing the family. Very often solutions to debt involve radical lifestyle changes. Teenagers in particular can be bewildered about the reasons for such changes and can put up substantial resistance.

If teenage children are involved in the solution and informed about the financial challenges facing the family a valuable life lesson can be gained. Insulating your children from the debt problems facing the family and the solutions available and implemented only serves to deny them valuable experience. This experience can be useful later in life when they have their own finances to attend to.

Dealing with debt is not taught in any school, there are no financial management lessons for teenagers. It’s up to parents to teach successful strategies for financial success and warning signs to watch for in the cases of trouble.

You may be surprised by how supportive and helpful your kids can be to help the whole family get through financial troubles. You never know, the experiences you share with your kids just may help them to avoid financial troubles in the future.

If you’re having financial problems and you are worried about your future and the future of your children call us at 310-PLAN and let’s get started on your family survival plan.

I see people every day who are under serious distress due to the global recession. My offices in Brampton and Mississauga are “ground zero” for the downturn in good paying manufacturing jobs in Ontario. A lot of people are out of work and in many cases won’t be going back to the good paying positions they had. They had built a lifestyle on 2 good incomes and in many cases they are now down to one income and in some cases both breadwinners in the family are laid off. This recession took many people by surprise, few people had prepared. So, now they are in the position of building their financial “survival kit” after the crisis has already struck. It’s a worst case scenario.
The first and most important element in survival is realizing you are in trouble. Many people hold onto the hope that “they will find another job” or “things are turning around” and this may very well be true. However you don’t want to pin your survival on hope, you need to act. What should you do?

Taking the “survival” analogy further.

1. Do an inventory of what you have . What resources are at your disposal ? What is the income coming in , what assets are available to be liquidated. What help can you count on from others?

2. Conserve what you have. You have no idea how long you are going to need to survive, don’t waste anything. Slash your expenses, reduce spending to the bare minimum, cut all the “fat” from your budget. Inform everyone in your family what is happening and what you are doing about it. The members of your family particularly your children ( provided they are old enough to understand ) need to know about the situation and the measures being taken. Everyone is going to be impacted by your “survival plan” so they need to be involved in its shaping and implementation.

3. Get informed. Find out what kinds of services are available at your bank, maybe you can reduce payments, pay interest only or maybe it’s time to consolidate. Talk to your creditors.

4. Seek help, You may not be able to do this on your own. You may need the help of others to make it through. This could be as simple as credit counseling and budgeting sessions with a counselor. Maybe you need to consider formal remedies to debt such as a proposal to your creditors or even bankruptcy. Even if you don’t think it will come to that get informed so that you have an understanding of what you can do.

5. Don’t panic, “freaking out” will result in bad decisions and loss of resources. You need to be rational, you need to act in your own interests and in the interests of your family. This may mean that you need to consider things that you’d rather not. Survival could mean the reduction of the number of vehicles in the household, it could even mean moving to less expensive accomodations. Everything needs to be on the table, don’t reject any options just because they are not want you want. Remember survival is about doing what needs to be done, not what you want to do.

6. don’t give up, all of this is 100% survivable and you will rebuild and recover. Once you do, keep your “survival kit” stocked with savings so you can survive the next crisis with less scrambling.

If you think you need some help or would like information about your options call us, we can help you to make your Financial Survival Plan. Call 310-PLAN today

Economic Downturn, we’ve been hearing these words everywhere we go for months. But what does it mean?

Let me give you an example, today I visited our head office in Kitchener, it’s located in a small plaza just north of the Kitchener downtown. In this plaza there is ground floor retail business, a small grocer, a convenience store, a payday loaner ( that no one should ever use, but that is another story ) and across the plaza a well known coffee and donut shop. Well it used to be a well known coffee and donut shop. The windows are all papered and the familiar sign gone.. just the light coloured outline remains.

The jobs in such places are considered workplace entry or exit level jobs, the place where teenagers start at their first job or seniors work to supplement fixed income. Often moms who have limited hours to work due to child care responsibilities also work at entry level jobs in places like this well known coffee shop.

What happened? Why did this, from all accounts popular and well traveled location close? What factors resulted in likely 20 or so people ending up unemployed?
Likely we can chalk it up to “Economic Downturn” . When unemployment strikes a community as it has most communities in Ontario during this recession it effects everything. Factory workers laid off , no longer stop off at the coffee shop on the way to work. Contractors formerly stopping in to buy 15 coffees and dozens of donuts for their busy crews are idle, sitting at home or running with reduced or no crews. Loss of jobs or even reduction in hours and overtime in well paying jobs will result in the loss of jobs at the lower end as people dig in and spend less on things like coffee and donuts.

Recessions come from time to time, some are deep and far reaching like the one that we are experiencing . Its like the turning of the seasons. Every year come the fall we get ready for winter because we know its coming. We should do the same as much as we can with our finances, savings, a contingency fund, and making certain that we are not over-extended with borrowed money will all contribute to being able to make it through the financial winter of a recession.
If you have be caught by the economic downturn and you find yourself in a position that your preparations to survive have not been sufficient you may need some help. No one can predict how long or how deep a recession is going to be. I’ll bet that the people who used to work at the coffee shop I mentioned above felt pretty secure about their jobs right up to the point that they dissappeared.

If you are struggling, call us we can help you make it through, you may just need a little direction, or you may need to make a proposal to your creditors, in some cases bankruptcy may make sense for you. We can help you to make the decision that is right for you.

Call 310-PLAN and lets get started.

New rules coming into force

Finally after years of delay new regulations regarding the administration of bankruptcies and proposals in Canada will come into force September 18 2009.
I could go into details regarding the reasons for the delay of coming into force for these new rules, but it’s not really relevant to someone considering making a proposal to their creditors or filing for bankruptcy. The fact is, after September 18, the way bankruptcy laws will apply to situations will change.
In general there are aspects of the rules that simplify the trustee’s job and should make the whole system simpler and less costly to administer, but again, that does not really matter to someone thinking of filing bankruptcy. What does matter is how the new rules will affect persons who file after September 18 2009.
In General many people who file after September 18 will see the term of bankruptcy extended beyond the current minimum 9 month period out to 21, 24 or 36 months. Automatic discharges will apply for the majority of cases of personal bankruptcy . The number of cases that will need to be heard in court will reduce dramatically. What this means is we can more reliably predict the outcome of a bankruptcy filing at the outset allowing people to make better informed decisions about filing.
After September 18, the only people who will see their bankruptcy finished within 9 months are persons or households with minimal income. Individuals or households with greater means will be required to pay for a longer period but will still qualify for an automatic discharge after a stipulated period. For someone who has never been bankrupt before but has income above a set threshold ($1870.00 net income per month for one person , more for larger households) they will be discharged automatically after 21 months of bankruptcy. For persons filing for a second time, with minimal income, they will be discharged after 24 months, and if they have income above the threshold, after 36 months. In all cases no court appearance will be required unless requested by their creditors.
These changes may make proposals to creditors much more attractive to persons having debt problems. There are some changes to proposals as well. The most significant change is the limit of debt allowed to be managed under a consumer proposal has been increased from $75000.00 per person to $250 000.00 ( not including a mortgage on their principal residence ) Meaning that the more complex and expensive “Division 1″ proposal process will not apply for the vast majority of individuals facing debt problems for which a proposal is their only viable option.
From these changes it’s clear that the direction of law changes are designed to favor consumer proposals as the typically chosen remedy to debt problems.

If you are having debt problems call us today at 310-PLAN. We can review your options and show you how these new rules may affect you.

Every day I meet with people who are stressed out about debt. I think it’s fair to say that people are stressed out about debt today more than any other time in the recent past.

But is it the debt that is the problem?

Maybe you have recently lost your job, maybe you were laid off a few months ago now and it’s looking like you won’t be called back soon or at all. I know for certain that I meet with people every day in my Mississauga and Brampton offices that are in this situation. When we sit down and review their budget we find in many cases that there is a lot more money going out than coming in. In many cases people stopped paying their debts some time ago, but still they are hundreds ( and in some cases ) thousands of dollars short each and every month.
The result of this shortfall is ballooning debt. The shortfall gets shuttled onto credit cards and lines of credit until there is no more credit to consume. Everyone is “hoping” things will turn around soon, then their household economy hits the wall. With no more credit and a running deficit in the budget the problem can no longer be ignored.

The problem feels like there is too much debt, because that’s who is making all the noise, creditors are calling and everyone wants paid. You feel like, “if only I could get rid of this debt everything would be ok” but really.. it won’t . The problem remains, not enough money coming in and too much going out.
If this is the case, then changes have to made to deal with the deficit, expenses have to be reduced and belts tightened, this could mean big changes. You may have to sell your home ( or surrender it to the mortgager if its value has dropped below what you owe on it ) you may have to give up a car, you may even have to take up a second job or take 2 part time jobs to replace a lost full time job. Every possible solution has to be considered and reviewed.
Bankruptcy or a Proposal to creditors is for many people a viable solution for debt, but it won’t solve a budget deficit if you have already stopped paying your creditors and still can’t make ends meet.
Once you have your budget under control, then it’s time to deal with your debts. A proposal to your creditors or a filing of personal bankruptcy could be your first step back to financial recovery.

Every recession ends and financial recovery will happen, personal financial recover will happen as well. If you need some help to get there Hoyes Michalos & Associates Inc. can help you.

Call 310-PLAN today and let’s get started.

“Economic downturn” seems to be on the tip of everyone’s tongues today. Practically every news report is talking about job losses and “tough times ahead” . People are frightened, jobs are on the line and many people have seen their pay cheques shrinking due to the loss of overtime or short term lay offs.

It’s fair to say that everyone is feeling the effects of this recession, but the question remains, what can you do?

In a word.. plan.

Do a budget, reduce unnecessary expenses, cut back on spending and dig in. Reducing your debt should be your first priority. Build up a contingency fund of savings ( the new tax free savings account may be a good place to tuck away this money). Everyone needs to have a plan to carry them through lean times, It’s a mistake to think “it won’t happen to me”.

Practically everyone I see in my Mississauga and Brampton offices never thought they would need the help of a Trustee to resolve their financial problems but the fact is that for many people facing rising debt and dropping income, bankruptcy or a proposal to creditors is the only viable way through the downturn.
What is certain is that there are options to dealing with debt that suddenly becomes unmanageable. Part of you plan to survive the recession should be to ensure that you know all your options.

If you are facing a lay off, if you have seen your income shrink and your debt become too much to deal with its time to take action now. Make a plan, Hoyes Michalos & Associates Inc. can help you. A phone call and a free consultation can get you on the path to being debt free.

Call 310-PLAN and lets get started.

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.