The Rebecca Martyn Bankruptcy Windsor Blog

As a Windsor trustee, I am often asked what happens to a second mortgage if someone files for bankruptcy.

The answer depends on what the plan is with the house.  If your plan is to keep the house, you have to keep paying your first and second mortgages.    You are not able to file for bankruptcy, keep your house, but not pay the mortgage.

If you are asking this question, you are probably dealing with a cash flow problem.  Call me at 310-PLAN and we can review your situation in detail and work out a plan that is best for you and your family.

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.

I received a phone yesterday to my Windsor office. The caller was concerned about the effect of her bankruptcy on her spouse. 

She had accumulated this debt many years ago when married to her first husband.  He filed for bankruptcy and since she had cosigned debt, the debt then became her responsibility. 

She assumed just because she and her current spouse were married, her debts automatically became his debts.   I asked if her husband had co-signed any of the debts and she advised that he had not.  She was happy to hear that if she filed for bankruptcy the debts would not be his responsibility. 

The caller is now in the process of getting a fresh start from her debt through filing for bankruptcy.

If you need a fresh start call me at 310-PLAN or email me.

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.

When the new bankruptcy rules were announced we noticed a change in the paperwork requiring debtors to disclose their highest level of education.  All of us at Hoyes, Michalos were very offended by this disclosure requirement.  I don’t think it is relevant what your level of education is.  When I am reviewing your situation, I need to know your debt, assets and income, but it is not necessary for me to know your education to evaluate your situation.  I can only assume the government wanted this information for statistical purposes.

Yesterday we find out, due I am sure in large part of the lobbying by Trustees to have this changed, that this disclosure was no longer required.

The new rules are here and we are all familarizing ourselves with them.  However, if you are in financial difficulty and need to speak with me call me at 310-PLAN to book a no charge, no obligation meeting.

Yesterday I attended a seminar put on by the CAMH Problem Gambling Project. We had the pleasure of listening to counselors tell us about the services that are provided locally to those with gambling addictions.

We also heard from Deputy Registrar Diamond from Toronto Court. He advised us of what the Court wants to see when someone has gambling debt. One of the primary functions of the Bankruptcy and Insolvency Act is rehabilitation and the Court wants to make sure the debtor is taking steps in that direction. In order to get discharged the court wants to see a letter of self exclusion from the local gaming establishment and proof of attendance at gambling counseling. The discharge will then be granted based on the debtor’s efforts at rehabilitation.

It was an interesting seminar and it is always helpful to know the resources available to help people.

If you are having difficulty paying your bills, it is important to speak with someone about your options. Call me at 310-PLAN to review your options.

As readers of the blog will know, the government has passed new rules effective on September 18, 2009.  The net effect of the bankruptcy changes is that bankruptcies will cost people more.  Why would the government make bankruptcy more expensive for people in today’s economy?  I am not sure, but it might be that they want more people to file a consumer proposal.

As I noted in the last blog, as of Friday, if you are $200 a month (on average) over the government’s income guidelines your bankruptcy will automatically last 21 months (36 months if you filed bankruptcy before). 

This may mean that more people will file a consumer proposal.    As an example, if your bankruptcy will cost you $400 a month for 21 months, you may decide to file a consumer proposal of $200 a month for 48 months.  Yes, a proposal is costing more money, but the payments are easier to manage. 

I haven’t noticed any changes to the credit reporting websites, but currently a bankruptcy stays on your credit report for 6 years after discharge.  If your bankruptcy last 21 months, then the bankruptcy is on your credit report for almost 8 years (7 years, 9 months).  However, if you file a consumer proposal, the proposal is on your credit report for 3 years after it is paid off.  If it takes the full 4 years to pay it off, it is off your record in 7 years.

It is important to speak with someone about your situation and to see how the new rules could affect any bankruptcy filing.  Email me or call me at 310-PLAN and lets discuss a plan that is right for you.

As I mentioned in a post last week, the new bankruptcy rules are scheduled to come into force next month.  However, at the time I wrote the post the government hadn’t announced the details of the rules.

Specifically, I want to write about surplus income. Under the new rules, if someone in bankruptcy has surplus income their bankruptcy will last 21 months if a first time filer and 36 months if it is a second time bankruptcy. When I wrote the post last week I was unsure if there was a surplus income limit, and on August 19th, the government clarified that there is a guideline.

If your surplus income is greater than $200 on average, the bankruptcy will extend to 21 or 36 months.

So what does this mean to you? If you have been thinking about filing for bankruptcy and your income is greater than $200 above the income guidelines, you need to review whether it is better to file now or later. Each situation is unique, so it may not be as clear cut as just being $200 over the income limit.

It is important to come in and see me soon. You can call me at 310-PLAN to review how the new rules could impact you.