Dealing with Debt,  There are more options than you may think

Every day I meet with people in my Mississaugaoffice who are dealing with debt, I  also get a lot of e-mails and take a lot of calls from people asking the same question. What should I do about my debt?

Doug Hoyes, Co-Founder of HoyesMichalos & AssociatesInc. recently posted on our main site a clear summary of you options when dealing with debt. Included is really clear video summary of your options.

Click on this link to see Doug’s post and check out the video, it’s really quite good and answers a lot of questions.

If you want more information call me at 310-PLAN ( 7526) or click on www.hoyes.com and lets get started

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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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Ted Michalos, CA, Mississauga Bankruptcy Trustee

I work with Brian McIlmoyle in our Mississauga consumer proposal and bankruptcy  office helping people deal with their debts.  Here’s my advice for budgeting and planning for next Christmas.

I hate to be the bearer of bad news, but in January the first round of “Christmas bills” start arriving in your mail box…

If you’d like to avoid this problem next year, now is the time to start planning for Christmas next year.  I can see your eyes rolling in your head, “We just cleaned up from this Christmas and you want us to start thinking about next year?  You’re nuts!”

Maybe, but give me a couple of minutes of your time to make a serious suggestion.

As the Christmas bills roll in, try and figure out just how much you spent this year.  $300?  $500?  $1,000?  More?  Whatever the amount, did you pay with cash or put it on credit?  If you paid on credit, do you have a plan to pay off the debt?

Most people over spend at Christmas – which is ok, but only if they have a plan to pay for it.

The best way to avoid Christmas bills in 2012 is to save enough money between now and then to pay cash for your gift buying this year.  Take whatever amount you spent in 2011 and divide it by 10 – that’s your monthly saving target.

If you spent $1,000 on Christmas 2011 and you want to pay cash for Christmas 2012 then you need to find a way to set aside $100 per month starting in February (and running to November) in order to have the money you need to do so.

You can pay your bills, and create a savings plan for next year, by not budgeting; just pay your bills as often as you get paid, or set aside money for next Christmas every payday.

The hard part, the really hard part, is doing this for the first time.  If you used credit to pay for your shopping this Christmas, then you have those bills to pay off.  Finding the extra $100 (or whatever number you need) every month will be difficult.  Having the discipline not to spend your Christmas savings may be even harder, but you need to do it.

It is like dieting (the OTHER Christmas nightmare).   Set a goal for yourself – in this case saving a set amount of money each month and stick to it.

Happy New Year everyone – here’s hoping 2012 finds you happy, healthy and prosperous.

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Holiday Money Stress

This time of year brings many joys, gathering with friends and family, parties and holiday cheer.

But is can also be a time of financial stress.

Good times cost money, gifts and traveling to family gatherings can put stress on an already stretched budget.

One of my colleagues, Ian Martin, who works out of our Kitchener head office wrote a great guide to keeping your holiday spending in check.  Click on this link to read his guide. It’s really great advice, and I could not state it better.

So have a great time over the holidays but keep in mind the bills come in in January.

If you are worried about how much debt you have, or are having trouble now making payments. Give us a call at 310-PLAN (7526) or click on www.hoyes.com  We can help.

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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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Costs In Bankruptcy

One of the most important questions I am asked when I am meeting people and talking about debt solutions is “how much does bankruptcy cost?”

You would think this is an easy to answer question, but like many things having to do with bankruptcy, it’s more complex than it seems.

The costs of bankruptcy are all defined by the law that governs bankruptcy. The law sets out the fee structure for the trustee’s fees and also defines what people who file bankruptcy must pay.

One of the most misunderstood aspects of these costs is “surplus income” . You may think, “If I am filing Bankruptcy I can’t have any “surplus income” .. I can’t pay my bills so I have no “surplus”  But this may not be the case.

The costs of bankruptcy are indexed to your income, If you earn income above a government set threshold, you have to share some of that income with your creditors. If you earn more you pay more.

If you want more in depth information follow this Link

How can you avoid the surplus income trap in bankruptcy, and stay clear of all of the complex duties and regulations of bankruptcy?

Easy, don’t file a bankruptcy. Do a ConsumerProposalinstead and make a deal with your creditors.

If you are dealing with too much debt, and need to know your options.

Call us today 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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We can’t open a newspaper, tune in a radio station or flip channels on the TV without seeing or hearing ads by “Debt Consultants”

But what exactly do they do?

The simplest answer is “not much” other than separate you from your hard earned money with false promises of “Freedom from Debt”  Here is a video of Hoyes Michalos founders Doug Hoyes and Ted Michalos discussing “Debt Consultants”.

The Debt Consultant industry in Canada is not regulated, anyone can call themselves a “debt consultant” no qualifications are necessary. Some of these “Consultants” do take the step of becoming qualified to provide the mandated counselling required under the law for anyone who files a bankruptcy or a Consumer proposal through a licensed Trustee in Bankruptcy, but most only do so so they can advertise themselves as “Government Approved”. Most never intend to provide any such services.

Quite a number of these “consultants” serve as representatives for American “debt Settlement” companies that have sprung up like mushrooms after rain. These American outfits generally are not licensed to operate in Canada, don’t know our laws and regulations and really could care less as long as you sign up to their “Debt Settlement” plans. These plans often have high fees and very low success rates, I’ve met people who have used these services, paid thousands in fees and still ended up with their pay garnished by people they thought they had protection from.

The fact is that many of these “consultants” really only want to take advantage of people who are desperate and fearful of seeking the help of a Trustee in Bankruptcy.  Many Debt Consultants end up referring people to Trustees after charging them a fee or milking them for as much money as they can.

So how do you protect yourself?

Simple, make sure you see a Trustee first. Trustees in bankruptcy are required to review your situation with a view of avoiding a bankruptcy. There are options other than bankruptcy for dealing with debt and a Trustee will make sure that if you don’t need to file a bankruptcy you will get the help you need to solve your debt problems. Today more than half the people I see never file a bankruptcy, most are able to arrange a solution to reduce their debt to a manageable size and make one affordable payment monthly to resolve their debt problems through a ConsumerProposal.

So don’t be fooled by predatory “debt consultants” they don’t work for you, they work for themselves and could care less if you ever get debt free as long as you pay their fees.

A licensed Trustee in Bankruptcy is required by law to be fair and impartial and to not act in self interest. And the fees that a Trustee charges are set by Law.

If you have too much debt and need help dealing with it call 310-PLAN ( 7526) or send me an e-mail (use the form on the right hand side of every page on this site) or click on www.hoyes.com and lets get started

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