The Rebecca Martyn Bankruptcy Windsor Blog

The Office of the Superintendent of Bankruptcy published the 2009 statistics this morning. I view the numbers as a mixed message. Bankruptcies in Canada increased by 28.4% over 2008 and consumer proposals. In Ontario the numbers are 28.5% and 43.3% respectively.

What about Windsor? Windsor bankruptcy filings are up 25.3% and the consumer proposals increased by 14.8%. For bankruptcies we are just about average compared with Ontario and Canada. This is not bad news. In prior years, Windsor had above average bankruptcy filings. The economic downturn hit Windsor first due it our dependence on manufacturing. It appears that the rest of the province and country has just caught up with us.

I was rather surprised to read that Windsor was below the national average for consumer proposal filings. In the Windsor office, I saw an increase in the number of proposals filed in 2009. The good news, is that some debtors still have the ability to make payment on their debt. Does this mean that many people don’t have the income to fund a consumer proposal? It might. I looked at the statistics for filings for January 2009 to September 2009 and Windsor had a small decrease in the number of proposals filed. This means, that the majority of consumer proposals were filed prior to the change in the legislation. What I take from this is that once people understood the consumer proposal option better, they choose that route.

2009 was an odd year due to the change in bankruptcy legislation in September 2009. Many people who otherwise may have delayed filing bankruptcy for several months filed prior to the change in legislation. We will have a better idea what, if any impact that had this time next year.

The message is always the same. Call us at 519-250-8060 or 310-PLAN to develop a plan that is right for you.

Consumer proposals have become increasing popular since we opened our Windsor office in 2003. Each year I have seen an increasing number of filings in Windsor and surrounding area. Since Hoyes, Michalos first opened its doors in 1999 we have maintained a database of creditor voting patterns and we have noted some very interesting recent voting patterns.

I can’t name names because I could get sued, but I want to share some examples of recent votes. Big Bank A recent voted against a consumer proposal and would not accept any counter offers. They stated they voted against the proposal because the debtor’s debts were too low (his total debts were $16,000). In another example, Big Bank B voted against a consumer proposal with a rate of return of 21% and they made a counter offer with a rate of return of 27%. In both cases there were sufficient other votes for the consumer proposals that they both passed even without Big Bank A and B’s support.

The logic of some of the voting is strange to say the least. The debtor has offered a consumer proposal with a reasonable rate of return and a rate of return far greater than a bankruptcy. In many cases when a consumer proposal is rejected the debtor has no other option but to file for bankruptcy. It doesn’t seem logical that a creditor would reject something that would pay money.

In 2008 (the latest year statistics are available), Hoyes, Michalos filed 8% of all of the consumer proposals in Ontario. Keep in mind that this includes regions we don’t even have offices in. We estimate that if we only include the regions where we have offices, our firm filed 25% of all of the consumer proposals filed.

What does this mean? If you are looking to file a consumer proposal you want to be dealing with someone who has extensive experience in this area. You want to hear about creditor voting patterns to make sure your are offering a consumer proposal that is fair to both you and your creditors.

Call me at 310-PLAN or 519-250-8060 or email me and we can review your situation and formulate a consumer proposal that is right for you.

I was speaking with someone the other day and he commented on what a tough job I have and wondered how I can do it each day.  From his perspective, he thinks that all day I meet with people who have problems and their problems would just drag down my emotions.

Well, lets be honest.  People don’t call me because they are managing to pay all of their bills on time and everything is fine.  They call me because something has happened in their life and they need a plan to get back on track with their debt.  Everyday I hear alot of sad stories.  I think about the single parent struggling to raise a child, or the person who’s income is decreased as they are recovering from a lenghtly illness.  But the important thing to remember is that I am here to help.  There are financial options available, and more often that not, once the person hears there are options they leave my office happy knowing that after so long they finally see a light at the end of the tunnel.

It is rewarding to receive a phone call from someone who has just completed their consumer proposal thanking me for all of the help and letting me know how their life has improved.  Or an email from someone just discharged from bankruptcy thanking me for not making them feel embarrased becuase they had to file.  But the best reward happens when I receive a new caller letting me know their friend referred them to me because they are happy with my service.  In what other profession do you get so many thank yous?

If you need a plan to manage your debt, call me at 310-PLAN or 519-250-8060.

For those in Windsor, you may be wondering about the news of the Windsor Star’s CCAA filing. I am oversimplifying the process, but essentially what the parent company has done has offered a payment plan to it’s creditors. As was noted in the paper, they stated very clearly that they did not file for bankruptcy. In recent years many large companies and sports teams have made use of this legislation to restructure their debt.

It sounds familar doesn’t it? A company is unable to manage it’s debt load and asks the creditors to accept partial payment.

For the individual debtor, this a called a consumer proposal. You offer your creditors a payment plan to accept a portion of their debt over time and the creditors vote for or against acceptance.

Reading about a companies financial diffculties remind us all that the downturn in the economy effects everyone and all businesses.

What can you do if you are having a hard time managing you bill payments. You can call me at 310-PLAN or email me and we can arrange a meeting to review your situation in detail.

As a Windsor trustee, I have spent some time looking at what happened in 2009 for the office. It was another record year for filings. Since the Windsor office opened in 2003, each year since has seen record filings.

The reason for the increase in 2009 is two fold. The change in bankruptcy legislation in September 2009 caused many people to rush to file who may have otherwise delayed for several months. These new rules make it more expensive to file for bankruptcy if income is above a certain limit (why the government would enact a rule that penalizes people is a topic for another blog).

The next reason is obvious to many Windsorites. We continue to feel the sting in the downturn in the manufacturing sector. Overtime has been cutback or reduced and many people have had to take wage cuts in order to save their jobs. The US dollar is also having an effect on our clients who live in Windsor, but work in the US. Many people budgeted their household based on the 70 cent dollar of a few years ago. Now that the dollar has continued to remain in the 90 cent range, many people have exhausted their savings or have maxed out their credit supplementary what is essentially for them, a decrease in income.

What does this mean to you? Making a plan has never been more important. Times are still tough and will probably remain that way for a little while longer. If you have having difficulty managing your debts you should come in and meet with me. We can sit down and review your situation and see if credit counseling , a consumer proposal or bankruptcy is a option to help you with your debt. Call us at 310-PLAN or 519-250-8060 and we can help you with a plan.

This morning I noticed a press release in the Windsor Star commenting on how bankruptcy rates in Ontario have decreased and what great news this is.  A word of caution; while it is always nice to read about a decrease in filings, it is important to review the periods that are being compared.  You can read the complete report on the OSB’s website .

In the article it states that the decrease compares October 2009 and September 2009.  What is fails to mention is that September 2009 was a record month for filing.  We experienced an influx of people trying to file for bankruptcy prior to the rule change.  As you have read in previous blogs, the new rules can make it more difficult and more expensive for certain people to file for bankruptcy.

When the 12 months ending October 2009 is compared to 12 months ending Octoober 2008 there has been a 31% increase in personal bankruptcy filings and a 40% increase in consumer proposal filings.  I don’t see the increase in consumer proposal filings as a bad news story.  The increase in consumer proposal filings means that although people can’t pay their debts in full, they can offer a partial payment to their creditors.

What does this mean to you? It shows you that you are not alone. Unfortunately many people find themselves in financial difficulty and we are here to help review your options. In Windsor, give us a call at 519-250-8060 or 310-PLAN. We also have a Leamington office at 519-326-1467.

Not surprising to anyone having financial difficulties, there was a large increase in the number of personal bankruptcy filings in the third quarter of 2009 (the latest statistics available by the Office of the Superintendent of Bankruptcy).

Statistics for individual cities are no longer available. Instead they are published based on region. Our region includes Windsor, Chatham and Sarnia. In our region, there were 1,061 personal bankruptcy filings in the third quarter of 2009, a 44% increase from the third quarter of 2008. In addition, there were 213 consumer proposals filed, a 20% increase over the same period in 2008. For the 12 months ending September 30, 2009 there was a 41% increase in bankruptcies and a 24% increase in consumer proposals filed. The bankruptcy numbers are not surprising since many people rushed to file bankruptcy before the change in legislation took place. In fact, in our office the first half of September resulted in record bankruptcy filings.

Times continue to be tough in Windsor, but the message remains the same. Now is the time to develop a plan to deal with your debts.

For a no charge, no obligation meeting to review your situation, call me at 310-PLAN, email me, or complete the online evaluation form.

We have all seen the signs around Windsor. The company states you can avoid bankruptcy and they can get your debts reduced to 30%. Wow, sounds like a great deal doesn’t it? Sure, it’s called a consumer proposal. Who is allowed to administer a consumer proposal? A bankruptcy trustee. Don’t let our title scare you. Both consumer proposals and bankruptcies are administred by the same piece of legislation called the Bankruptcy and Insolvency Act.

And what about the ads? What does that company do. Callers have told me they will first charge you a fee to meet with them. I have been told that you need to bring $300 cash to your meeting. They will then help you complete the paperwork and refer you to a bankruptcy Trustee, but only after paying them an application fee. I have been told that application fee is anywhere from $500 to $1500.

So I guess you need to make a decision. You are having financial difficulties but you don’t want to file for bankruptcy (that’s ok, bankrutpcy is not always the best solution). You can call the company with the ad, pay them a bunch of money, and then have them refer you to a bankruptcy Trustee. Or you can call me, and I am a bankruptcy Trustee, at 519-250-8060 or 310-PLAN or email me and we can arrange a NO CHARGE meeting to review your situation in detail.

As a Bankruptcy Trustee in Windsor, I am often asked why I don’t do corporate work. For many Trustees corporate work is seen as the interesting work and the work that gets the attention. Well, the attention part can be true. There have been a number of high profile companies file for bankruptcy recently in Windsor and this can attract some media attention. I noticed two such articles in the local paper last weekend. The interesting note for me is our phone lines increase when this happens. As someone who used to work for a national firm this doesn’t surprise me. Someone may have called one of these firms and set up an appointment to discuss options to their personal situation. They book the appointment but then the trustee they were supposed to meet with starts working on a corporate file. What happens next? You guessed it – the personal appointment gets cancelled in favour of the corporate file.

That same person then calls Hoyes, Michalos, meets with me and we review the options in detail. They were stressed and annoyed that their meeting at another firm was cancelled, but now they are happy to know the options available to them.

It is important to meet with someone and review your options when you are having financial trouble. You can call me at 310-PLANto set up an appointment.

So, you probably googled “bankruptcy” or “consumer proposal” and you are wondering why the title of this blog is Cupcakes. I could also have titled it Customer Service.

Let me share with you a recent experience I had.

I called a bakery to order a mix of pastries for an event. The first problem I had was that they had machinery running in the background and I literally had to yell into the phone to be heard. The second was the order takers attitude when I placed the order. I wanted her to mix up a dozen pastries for me. I didn’t think my request was out of the ordinary since you can go to the local donut shop and order a dozen mixed donuts. Apparently it was though, because she didn’t understand my request despite my clarification that she could just box a dozen of whatever pastries they had. She was getting rude and I was getting annoyed and I was tempted just to end the call and call another company. Instead I settled on a dozen cupcakes.

That made me think about the Hoyes, Michalos approach to customer service when you call. First, you reach a live person who will take some general information (and no, we don’t have machinery running in the background). You are then forwarded to a Trustee or other professional who will take a few minutes to review your situation and help you to book an in person meeting. When the caller ends the call, they have the information they need, they know what to bring to the meeting and the address of where they are going. The caller now is feeling much better knowing that they have options to deal with their debt problems.

If you need someone to talk to about your financial situation, email me or call me at 310-PLAN.