The recession hit Peel region particularly hard, it’s a manufacturing center and a lot of companies just did not weather the storm and failed. This put a lot of people out of work, a lot of people are still out of work and the jobs they used to do just don’t exist any more.

At this point, many of those people who were collecting EI benefits are now seeing those benefits come to an end. The problem is, employment has not resumed. Particularly hard hit were older workers, people who have invested 10, 15, 20 + years in a company only too see it all swept away in the recession. 

Some of these workers with years of experience on the job are finding it very dificult to get back into the job market at the income they had before, I’ve seen 40-60% wage reductions for people who were able to find work.

Periods of unemployment and subsequent wage reductions are a significant contributor to debt problems. A lot of people have tried to supplement their income by using credit to make up the shortfall. This can work for short term wage interruptions, but when we are stretching this out over a year or more huge debt can result.  Oftentimes even with a return to employment the accumulated debt is greater than can be managed on the new reduced income.

In circumstances such as this, there are remedies available to get things back under control, bankruptcy, though the right solution for some people, for others a consumer proposal is the right way to recover from the “post recession hang-over”

Before anyone should consider taking control of their debt problems they have to ensure that the issues that created the debt are resolved.  A balanced budget is the first requirement of a successful recovery.  If you have enough money coming in to look after the household expenses, but not enough to take care of accumulated debt borrowing more money is not the solution. You owe it to yourself to find out about all your options. We can help you identify all the possible solutions to your debt problems.

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

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.

2009 is going to go down as “one to forget” when it comes to times past. Everyone is looking forward to 2010 to be an opportunity for a fresh start.

Our Firm, Hoyes Michalos and Associates Inc. has never been busier but I have to admit that the work this year has been emotionally draining. So many people were in serious distress due to job losses, financial reversals of fortune, business failures and all the related stress that brings. Add to this the government’s bad timing for bankruptcy law changes and we had a “perfect storm” resulting in difficult times for many people.

Often when I meet with people they are at their wits end. Fortunately, our team has been able to help very many people get relief from crushing debt and a fresh start. But for some, even bankruptcy won’t resolve the issues of loss of employment and income reduction. For many all they can do is dig in and focus on surviving until their situation stabilizes.

There are signs of recovery though, work hours for many people who suffered cuts are returning to full time levels. Some laid off workers are being called back and employers are looking to increase staff as the economy begins to return to growth.

For others the tough times will continue, particularly for older workers laid off from long time employers who are now no longer in business. Returning to the workforce for these workers usually means a pay cut and little in the way of job security. Significant lifestyle and downsizing adjustments will be required and oftentimes substantial debts will remain to be resolved from extended periods of unemployment.

If you find yourself back to work, but with a reduced income and carrying big debts we can help you regain control of your finances, no one wants to consider bankruptcy, but for some it is a viable solution to resolve debt. Bankruptcy is not the only option, we can help you make a plan that works for you and fits your “new reality” . You don’t have to carry the burden of debt , put 2009 behind you, we can help. Call us today at 310-PLAN and let’s get started on your 2010 fresh start.

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

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.

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.

Answer: No, it doesn’t matter where you file your bankruptcy. Some people prefer to file with a trustee near where they work, so they can meet with the trustee during their lunch hour or immediately before or after work. If that interests you, we have an office that will help you file bankruptcy in Toronto.

However, there are advantages to filing near where you live. We can meet with you in our Mississauga bankruptcy office before you head in to work in Toronto in the morning, or after work (we have late afternoon and early evening appointments), or on your day off.

Give us a call today at 310-PLAN (no area code required) or e-mail us for more information, and to set up your no charge initial consultation.