The Rebecca Martyn Bankruptcy Windsor Blog

Last article I wrote about for profit credit counselors and their fees. This time I would like to write about consultation fees some Trustee’s charge. I would also like to share a few of their stories about the meetings they have had with other Trustee’s.

I was scanning the Windsor yellow pages and noted that none of the advertising Trustees state that they charge a fee to meet with a new caller. However, when I speak with new callers on the phone I am hearing something different.

If you call a Trustee, ask if there is a fee to meet with them. If there is you should be calling us. We don’t charge for the initial consultation or follow up meetings if required.

I have also heard stories that some companies won’t even meet with you unless you first complete a lengthy application form and send it in first. Again, this is not necessary. Simply gather information about your debts and bring them into our office. I will even help you complete our “fresh start” form.

I have met with people who have come to us to seek a second opinion. They have met with a trustee who focusses on bankruptcy, when the person doesn’t want to file bankruptcy ; he or she wants to file a consumer proposal.

At this point they come to us for a meeting because they want to talk about all of their options, not just bankruptcy. In many cases they left all of their personal paperwork with the Trustee and now the Trustee wants money to return it to them. This is your paperwork and you shouldn’t have to pay to get it back. If you find you are in this situation, you should advise the Office of the Superintendent of Bankruptcy. If the Trustee didn’t tell you about a fee to meet with them, they shouldn’t be charging you to give you back your paperwork.

If you are unsure about dealing with the person you met with, don’t leave any of your paperwork with him or her. The same principle applies to paying a for profit credit counselor a meeting fee as paying a Trustee a meeting, you can speak with me at no charge, so why meet with someone who will charge you money to speak with them?

Call me at 310-PLAN or email me and I will be pleased to discuss your financial situation with you.

On February 4, 2009 Ted Michalos was interviewed by the Globe and Mail. The article got a huge response, so the Globe and Mail asked Doug Hoyes to participate in a “live chat” event. Readers were invited to send in their questions about personal bankruptcy in Canada, and Doug gave them instant answers to their questions. The reporter e-mailed Doug the questions, and he typed his answers and e-mailed them back. The readers asked some really good questions and we were told that the Globe and Mails servers had a hard time keeping up with the demand.

The questions illustrated the wide range of financial problems people have, and Doug was happy to share the wide range of solutions that are also available. You can read all of the questions, and his answers, in the Globe and Mail’s article on what you need to know about bankruptcy. If you didn’t get your question answered, please e-mail us your questions now, and our team will respond as quickly as possible.

Ted Michalos was also hard at work on Wednesday, doing a live interview on BNN, the Business News Network. You can watch Ted discuss the five things to consider before filing bankruptcy on the Hoyes, Michalos bankruptcy video page.

I suspect you will see Ted and Doug, and the other trustees of Hoyes Michalos, on the radio, on television, and in the newspaper frequently over the next few months. The media’s job is to cover the issues that matter to Canadians, and at the moment there is nothing more important to most Canadians than the state of our economy. Many of us have more debt than we can handle, and the media is looking for people that offer solutions. I am proud to be a member of a firm that has a great reputation, which is why the media calls on us for comments.

The good news for you is this: you don’t have to wait for us to appear on TV, and you don’t have to submit your question to a newspaper to get an answer from our experts. Simply contact us today, by phone at 310-PLAN or by e-mail, and we will answer your questions, tell you your options, and help you get a fresh start.

Increasingly I am seeing a lot of advertising with catchphrases such as “we can reduce your interest rate” or “we can reduce your debt by 70%”. The ads are popping up everywhere, on the internet, bus shelters and print. Just what do these ads mean?

I would like to share stories of 2 people I met with recently. I have not used their real names. The first person, I will call her Jill, was dealing with Company A. She was doing was she thought was a debt management plan . Jill had $20,000 in credit card debt and was paying company A $500 per month. What she didn’t realize was this was just their fee to start the process. Company A was charging her a total fee of $5,000. After this fee was paid, they would then approach each of her creditors to see if they would agree to a settlement plan. In the meantime Jill was continuing to receive past due notices and very aggressive collection calls. It wasn’t until she followed up with Company A that she realized what their plan was about. Jill had never met with anyone in person. She just filled out an on-line questionnaire, received information about a payment plan and sent in a void cheque for payment. She thought she was going to be debt free in 40 months; instead she was more stressed than ever. That is when she came in to see me. We reviewed her options and she chose to file a consumer proposal .

Last week I met with Gary. He was about to sign up with a plan with Company B and wanted a second opinion. We reviewed the information he was given and I pointed out that Company B was going to charge him $2,400 for a fee and then he would pay $200 per month for 36 months to his creditors. After Gary paid Company B all they were going to do was to refer him to a trustee to file a consumer proposal after their fee was paid. When someone files a consumer proposal with a trustee the monthly payment includes all fees and disbursements. You can probably guess what he decided to do. He saved himself $2,400 and filed a consumer proposal with me.

The lesson here is buyer beware. What services are you signing up for, who will you be dealing with and how can the company guarantee a debt reduction? If the fee sounds unreasonable the easy answer is don’t do it. I deal with many credit counselors who charge $25 – $200 for the time they spend with you.  Anything more than that is probably not very reasonable. If all the credit counselor is going to do is complete a form and then send you a trustee it’s important to remember that you can just call me yourself and meet with me. Finally, no one can guarantee a reduction in your debt. In a consumer proposal it is up to the creditors to vote on the plan, it is your proposal to your creditors and your creditors decide if they want to accept it.

If you want more information about whether a consumer proposal is right for you call me at 310-PLAN or email me.