Why is this date important? It is the date that is used to determine whether student loans are discharged with a bankruptcy or consumer proposal. Under the current rule, you have to be out of school for 7 years before your student loans are discharged automatically. It is important to realize that the end of study date may not be the same date that you finished or left school. If you had studies that were not funded with student loans that time period is still considered when determining the end of study date. The Canada Bankruptcy Student Loan blog has more information about student loans.

Just because you have student loans that won’t be discharged by a bankruptcy or a consumer proposal doesn’t always mean you don’t have options. It’s important to call me at 310-PLAN and we can review your situation in detail

It also means that some of Windsor’s heavy equipment operators are back to work. And that is a very good thing. It seems like there has been a drought for some of these workers so the jobs are good news for them, and good news for Windsor. But it’s important to realize that these projects are just temporary. Once the road is repaired or built, the job is done. Yes there may be another road to build but a lot of these projects are done under special funding and that special funding has been spent. As I have always discussed before, you need to make a plan for the future. Even though the income is very high now, you need to start planning for the lean times. If you need to buy items, think about what you need versus what you want. You also need to start saving cash for the future. It’s tempting to go out and buy all the stuff you have been wanting or putting it on credit cards with the plan to pay for it over time, but that is very expensive. If in the fall you may no longer have the income and you need to think about how you will be able to make those credit card payments.

If you already in financial difficulty and need to discuss your situation in detail call me at 310-PLAN or 519-250-8060 or complete the online evaluation form. Together we can develop a plan that is right for you. And don’t forget to check the road detour routes before you head out.

But am I going to talk about a tornado on a bankruptcy blog? No I am not, but when many people tell me about their financial difficulties they talk about how they feel like they are in the eye of the storm. They know something is going to strike and they need to know how to deal with it.

It was wonderful to read that there weren’t any serious injuries in Leamington. When you read the stories in the newspaper, those affected by storm discuss that they listened to the activity outside and realized that they needed to make a plan for their safety. Financial problems are like that too.

When you realize the storm is coming, make a plan to deal with your debts. The first step is to see if you qualify for a consolidation loan or credit counseling. If you don’t qualify then a consumer proposal or bankruptcy in Windsor may be an option. If so, call me at 519-326-1467 or (519-250-8060 in Windsor) or 310-PLAN and I will help you weather the storm.

I met with him and he advised me that he was interested in filing a consumer proposal. Upon reviewing his situation, I agreed that was best option for him. I told him that even though the other firm would have told him all about the voting process in a consumer proposal, as the Trustee, I needed to review that with him. He advised me that the other firm didn’t tell him anything about the mechanics of a consumer proposal. After he meet with them and learned nothing, he researched his options on our website at hoyes.com.

A few things should have happened when he called the other firm to book the appointment. Someone should have entered the appointment into a calendar so the Trustee knew her schedule. If she was called away, then they should have given the client the courtesy of a telephone call to reschedule. When meeting with a client, we have the responsibility to go over all of the options with them. None of that happened in this case.

Here is what happened when he met with me. I first reviewed his assets, debts, and budget in detail. We discussed other resources such a credit counseling and debt consolidation. We then reviewed bankruptcy and consumer proposals and the pros and cons of each. He had read most of this information on our very informative website, but I am still required to review the processes with him. He left the office with a clear understanding of his options. Although he already knew that he wanted to file a consumer proposal, he left feeling better about his decision.

Getting a referral to someone is great, but if the Trustee won’t take the time to meet with you, or you didn’t like the service, you have the choice to meet with someone else. You can call our office at 310-PLAN or 519-250-8060 and speak with either me; Catherine or Tina and it would be our pleasure to help you. Or, if you prefer, you can email me your question.

I am not a lawyer, and I am just giving my opinion on the topic.

The question I have been getting is “if the debt is greater than 2 years old can it be collected”. The short answer is yes (the long answer is you need to speak with a lawyer). The limitations act does not just automatically make the debt go away. The collector can still call and send letters. However, when they get to court it becomes a different matter. If you don’t show up and the creditor gets judgment, the limitation doesn’t apply. If you show up in court and advise the court that the debt falls within the statute of limitations, the court will take that into consideration and will not issue a judgment. Again, this is a legal matter and you will need legal advice on filing a defense. The statue of limitations does not apply to all debt, and again legal advice will be needed.

If you are inquiring about this, it is probably because you have debt troubles. Call me at 310-PLAN or email me and we can discuss your options and even book a no charge, no obligation meeting.

You have seen the ads that promise to “reduce your debt by up to 70% without filing bankruptcy.” The ads sound too good to be true, and they make you wonder who you are dealing with. How can someone running an ad in a newspaper make such a bold claim?

The procedure they are “selling” is often a consumer proposal and the claim of 70% debt reduction is often correct. Most people that file a consumer proposal repay about 30% of what they owe.

The second half of the claim, “without filing bankruptcy” is also true. A consumer proposal is a legal procedure administered by licensed trustees in bankruptcy who also serve as consumer proposal administrators, but it is not bankruptcy.

Where the people running these ads run into trouble (and that is not to suggest they are breaking the law because as far as I can tell they aren’t) is the fact that they charge you a fee for their services when all of the information they provide and the assistance that they give is available free of charge from trustees in bankruptcy.

Let me say that another way: the service these companies provide is to help you assemble the information necessary to file a consumer proposal. They can’t actually file a consumer proposal themselves, as only licensed consumer proposal administrators can do that. So once they have gathered up all of your information and you have paid them their fee, they refer you to a trustee to prepare and file the consumer proposal. What they don’t tell you is that if you had called a trustee directly there wouldn’t have been this extra fee – they would have provided the same service without the fee.

So who are you dealing with? Well, the companies running these ads call themselves debt consultants. There are no regulations for this industry as until some one thought up this “scam” a few years ago the industry didn’t exist. If there are no regulations then there is also no government oversight. If you decide to deal with one of these companies and something goes wrong, your only recourse is through the Courts. Given that you called them because you were in financial difficulty, what are the chances if something goes wrong you can afford to take them to Court? For most people the answer is slim or none.

So, if you are going to have to deal with a licensed trustee to file a consumer proposal, and the trustee won’t charge you an extra fee to help you assemble the information required to prepare a consumer proposal, why exactly would anyone ever deal with one of these companies?

The answer for some people is that they saw an ad, and responded to it, without asking any questions. For other people they use a debt consultant because they were afraid that a trustee would only talk to them about bankruptcy, and wouldn’t mention other alternatives, like a consumer proposal.

Don’t be fooled. Before you sign any agreement to help you deal with your debts, and before you hand over any of your hard earned (and in short supply) money, ask the person if the solution for you is to file a consumer proposal. If it is then ask them if they are a licensed trustee. If they are not then there really isn’t any point in dealing with them further.

Want to find out more? Call Hoyes, Michalos & Associates today. You can reach us at 310-PLAN (no area code required anywhere in Ontario), or call us at 519-250-8060, or you can email us, or even fill out our free online evaluation and we will respond with some personalized suggestions to deal with your debts.

We are licensed by the federal government as both trustees in bankruptcy and consumer proposal administrators, and we do not charge an up front fee. We will explain to you, in detail, all of your debt management options, so that you can make an informed decision.

No high pressure ads. Just information from licensed professionals.

These are the things I look at. There are other factors, but these give me a starting point.

1. What is your net income and monthly household expenses? The more money you have left over, the greater the likelihood a consumer proposal makes sense.

2. How much money do you owe and to which companies?

3. What is your monthly net income? The higher the net income, the more expensive bankruptcy will be.

4. What are your assets? The more you have in assets, the more expensive bankruptcy might be.

For example, consider Joe (a made up situation).

Joe is single, takes home $1,300 biweekly and owes $22,000 on credit card debt. If Joe were to file for bankruptcy it would cost him approximately $9471 (this assumes the same pay rate). Joe has the opportunity to work overtime which would result in even higher bankruptcy payments. If he were to file a consumer proposal, he may be able to offer $250 a month for 40 months. Both would cost about the same, but Joe would have a lower monthly payment with a consumer proposal. In this case, Joe would choose the consumer proposal.

If you are experience financial difficulty it’s important to talk to someone about your options. You can call me at 310-PLAN , email me or complete an online evaluation.

By now you have read about your options and in particular, all about consumer proposals. The big question is what do you offer?

That is where I come in. You can meet with me for a no charge meeting , and I can review your particular situation to determine what kind of consumer proposal makes sense for you.

1. Who are your creditors? Hoyes, Michalos maintains a database of creditor voting. I am going to let you know how your creditors have historically voted so you don’t offer a consumer proposal that has a small chance of being accepted.

2. What would a bankruptcy cost? No, you are not filing bankruptcy, but creditors will not accept a consumer proposal if they would get more money in a bankruptcy. If you have assets that have value or you have surplus income you need to offer at least that amount of money in a consumer proposal.

3. What can you afford to pay? I need to see an accurate monthly income and expense statement to determine what you can afford to pay. It is important to include all items such as groceries, lunches and cigarettes and to show your creditors you have a balanced budget when you include the consumer proposal payments. It doesn’t make sense to offer a proposal payment that will cause you to have a hard time paying your rent each month.

After reviewing all of the above, we can discuss what kind of proposal might be accepted. Remember, it is always up to your creditors to decide if they want to accept your proposal. If anyone tells you they can get your debt reduced, they are not telling you the whole story.

Call me at 310-PLAN, 519-250-8060 or email me and together we can formulate a plan that is right for you.

Income will be reduced, so before you think you will need to retire you need to start reducing your debt and expenses.

I met with a gentleman who recently retired.  His contract stated he had to retire at the age of 65, but retirement still came as a surprise to him.  2 years before he retired he financed a lot of stuff.  His income is reduced and he came to see me to see what he could do.  When looking at his budget, all his payments on stuff he financed came to over $2000.  His pension is $2200, so it doesn’t leave any money for rent, food, or other living expenses.  I asked him what stuff he is willing to get rid of and he doesn’t want to get rid of anything.   In addition he has over $75,000 in credit card debt.  The options that are available to him such as a consumer proposal, bankruptcy, or a debt management plan won’t help him until he can learn to live on his income.

I understand the attachment to things you have financed such as a car or boat, but when it comes to money, you need to make some hard choices.  Having groceries and a place to live is more important than a shiny new car.

What should have happened?  In the years leading up to retirement, he should have reviewed his needs versus wants, financed stuff to either pay it off before he retired, paid cash or financed stuff he could afford on a reduced income.

If you are facing a reduction in income and you need a plan to help with your debt, call me at 310-PLAN or 519-250-8060 or email me.

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.