The Rebecca Martyn Bankruptcy Windsor Blog

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.

The phone calls start at 8 am.  You answer and on the other end of the phone is a collection agent critizing you for owing money and telling you they are taking you to court.  You explain that your hours are cut back at work, but the collector just doesn’t care and demands you borrow the money to pay them.  You hang up the phone feeling angry someone spoke to you way, nervous about the threat of court and confused about what to do. 

The calls continue thoughout the day until you leave for work, and you can see all of the other calls on your call display when you come home.  Maybe a collection agency called you at work and bothered you there.  Now your boss is starting to get annoyed with the phone calls.

It is affecting your work and your sleep.  But what do you do?

The first step might be to call a local not-for-profit credit counsellor.  You can talk to someone and they can help give you your options.  Calling us is a good option.  Just because you call me doesn’t mean you need to file bankruptcy . In fact, we refer a large portion of new callers to other agencies, such as credit counsellors.

You finally decide to call us and you come in to meet with me. The stress is hard to deal with and the tears start. That’s ok, I have tissues on my desk. I understand that tears are a good stress reliever. After I explain your options you leave with a better understand and happy that someone was there to listen.

Maybe you decide to file, maybe not, but at least now you know your options. The meeting was no charge, so if and when you decide to do something, it is up to you.

If you need advice about your debt, please give me a call at 310-PLAN or email me and we can review your unique situation.

or email me.

Quite often I receive emails to my Windsor office simply asking what bankruptcy costs. It might seem like an easy question, but the answer is not always easy.

First, you have to make payments based on your income and the number of people in the family. A family of 2 with a total net income of $4,000 is going to pay more than if the same family had an income of $2,000. In addition there is an adminstrative charge. This is something everyone pays and at Hoyes, Michalos it starts at $160 per month for 9 months.

Without knowing the net family income and number of people in the household when someone emails me, its hard to answer the question.

If you want to know if bankruptcy is right for you, call me at 310-PLAN or email me.

Doug Hoyes, of Hoyes, Michalos and Associates Inc. did an interview with Business News Network on August 12, 2009. You can watch the interview on the BNN website. He explained the new bankruptcy rules and how a bankruptcy may last longer if you have surplus income.

Doug spoke about alot of same things I deal with everyday in Windsor. A person unexpectedly loses their job and uses their credit to pay for day to day essentials as they look for new employment. As the bills pile up, the person might be left with the prospect of filing for bankruptcy .

Our message is the same to everyone we meet. The bankruptcy rules are changing and it’s best to be informed now so you can decide if it is better to file now or to wait.

For more information, contact our office at 310-PLAN and arrange a meeting, and we’ll help you with a plan that is best for you and your family.

On August 6, 2009, much to our surprise, Trustee’s received an email from the Office of the Superindent of Bankruptcy informing us that the new bankruptcy rules are finally coming into force.

You can read all about the new rules at our bankruptcy reform web site. Personally, I feel that the new rules are both good and bad.

The good news is that the cap on the amount of debt allowed for a consumer proposal is increasing from $75,000 to $250,000.

The second piece of good news is that a secured lender can’t seize your car if you file for bankruptcy. Currently there are lending instituations that seize your car just because you filed bankruptcy. It doesn’t matter if you were up to date and wanted to keep you car, that was their policy.

The bad news relates to debtors who have surplus income based on the governments income guidelines. If you are a first time bankruptcy filer, your bankruptcy will last 21 months, if you are a second time filer your bankruptcy will last 36 months. This means that your bankruptcy will probably be more expensive. Does this mean that if you are $1 over the governement’s income limit your bankruptcy will lost longer? Unfortunately, I don’t know the answer to that. The goverment won’t be publishing the new rules until August 19th and we can only hope this matter is clarified.

What does this mean for you? If you are thinking of filing a proposal, but your debts are over $75,000 it is best to wait until the new rules come into force. If you bring home a little bit more than the goverment imposed income limits it might be better to file prior to September.

If you are having financial difficulties and want to talk to me about how the new rules might affect you and if its better to file now or wait, call me at 310-PLAN or email me.

I received an interesting email the other day and I thought I would share it.

The emailer basically didn’t see the point of filing a consumer proposal. He/she stated that if you owe money you should just go to the bank, get a consolidating loan and pay your debt that way. If your credit is poor, he/she just suggested getting a cosignor. In the second part of the email, the emailer also mentioned that he/she didn’t think it was right that the Trustee charges money to administer the consumer proposal.

I will deal with the first point made. It is true, it is always best to try to get a consolidation loan first and we review that option with the people who come in to see us. But let’s look at the reality of the situation. Your bills are already with collection agencies so your credit rating is poor. Since your credit rating is poor the bank won’t lend you money. Times are tough for everyone so not a lot of people are able to co-sign a loan. I didn’t even mention the risk to the co-signor if you are not longer able to pay. Asking someone to co-sign really is a big deal. As a result, the only companies that will lend you money are going to charge really high interest rates.

Now consider the effect on your credit rating. Just because the bill is now paid doesn’t mean it is no longer on your credit report. Negative items remain on your credit report for 7 years after it is dealt with. I have written numerous articles about the consumer proposal process and the pros and cons and I am not going to repeat them here.

The next comment made by the emailer dealt with the fees. Yes, it is true that the trustee charges money to administer a consumer proposal. The trustee is providing a service and I would think you would agree that the trustee deserves to be paid for the time being put in to help you. The fees are regulated by the Bankruptcy and Insolvency Act, so all Trustee’s have to charge the same. If you get a bank loan, the bank will charge you interest. When you do your job do you work for free? No, you expect to be paid for the work you do.

It is important that you review all of your options and consider all the facts before making your decision. I can help with that. Call or email me today with your question or comment.

I receive numerous emails to my office in Windsor asking who we, as Trustees, work for. In addition, there are numerous for-profit counselors advertising stating “don’t go see a Trustee, they work for your creditors” (if you have been following my blog you can read more about for-profit counselors).

Trustees are appointed by the Office of the Superintendent of Bankruptcy to help you with either a bankruptcy or a consumer proposal. Yes, you pick the Trustee and yes you pay the Trustee to help you, but the Trustee does not work for you. Well then, you must be thinking that we work for the creditors. No, we are here to make sure both parties, the debtor and the creditors, are following the rules.

Let me give you a few examples. I am not using anyone’s real name.

Sue filed a consumer proposal with me. After the date of filing, Credit Union X took money from her pay cheque. We advised the credit union that they had to give the money back and they refused. Although the money in question was around $200, the point is that the credit union was violating the rules by not returning the money. I arranged a court date and the Credit Union finally agreed to return the money. That doesn’t sound like I was working for the creditor does it?

Robert filed for bankruptcy and was due to be discharged later this week. He hasn’t made the payments he was required to make based on his income. As a result he is not getting his discharge as scheduled and will have to pay the required payment in order to get out of his bankruptcy.

When you are in financial difficulty and need advice it is important to feel comfortable with the person you are dealing with. If you were uncomfortable at your meeting, you always have the option to see someone else before you sign any papers.

Call me at 310-PLAN or email me and I will explain all of your options to you.