Howard Hayes - Client Services - Hoyes Michalos & Associates Inc

On this blog we often talk about the dangers of carrying too much of a debt load on credit cards.  We discuss dealing with credit card debt on this blog every week and we offer pratical solutions to solve debt problems.

When visiting my doctor for a routine check up, his advice to me at the end of our meeting was that “an ounce of prevention is worth a pound of cure”.  Those words put the idea in my mind for today’s blog about how having a credit card can actually be a good thing. 

The key to successful credit card ownership follows the same principle of prevention is better than the cure when it comes to debt.  Used responsibly, here are five reasons why carrying a credit card in your wallet can be good for you.

1. Good substitute for cash.  If you planning on making a big purchase, for your own safety and security, it’s probably a better idea to consider carrying a piece of plastic in your wallet to the store rather than a lot of cash  
2. 0% interest.  On most credit cards, if you pay your balance in full at the end of each month, you won’t get charged interest.
3. Cash back and rewards.  Most credit cards have some kind of rewards program which you can use and redeem toward other things such as airline tickets, gift certificates, cash back.
4. Record keeping.  A lot of credit card statements are now issued with your purchases for the month itemized into categories of spending, such as groceries, electronics, toiletries.  This can be a helpful tool when looking at planning a budget, you can see what areas you spend money the most.
5. Protection. Most credit card companies have good fraud prevention programs.  They monitor unusual activity on the account and can take steps to help prevent you from mis-use of the card and fraud. Some credit cards also offer certain types of warranties or service plans, insurance against particular purchases.

Some of the best advice on credit cards is to simply not use them, however when used responsibly you can take advantage of some of the points above.   Try to keep in the back of your mind that a credit is best used as a substitute for cash, not a substitute for borrowing.  If you don’t have the money in your checking account for the purchase you want to make, leave the card at home, save up and buy it another day when the money is there. 

Remember, prevention is often better than the cure.

For more helpful advice on using credit cards, budgeting and for solutions on how to get out of credit card debt such as a Consumer Proposal, call me at (519) 622 3773 or send me an email today!

Howard Hayes - Client Services - Hoyes Michalos & Associates Inc

It’s the time of year again that children look forward to the most – back to school.  

This also means it’s a time of year that a parents wallet can get hit hard.  The cost of putting a child through a school year seems to rise every year. 

MoneyProblems.ca has recently run a 5 part series of blogs with helpful advice on money saving tips related to sending kids back to school.

Make a List:Plan for what you’ll need to purchase and where you can get your supplies from.  Ask the children and have them involved in the process by having them look in the local store flyers for the best deals.

Shop at Home: From your list, see what you already have that could be used again. Perhaps your eldest child may have finished with something that could be handed down to a younger child. Especially with simple things like, pens, pencils text books.

Make a Budget: Before you hit the stores, have a clear idea in your mind of what you’d like to buy and how much it will cost.  Keep the children involved. Set yourself a realistic budget and explain to the children why a budget is important to stick to and helps them to learn where to prioritize where the money in a budget is best spent.

Don’t Buy Everything All At Once: Some back to school supplies you may not need to buy.  Once your child gets in school, you may realize that some items are indeed supplied by the school and it may not also be immediately apparent what your child actually needs for the particular course they’re going to be taking.

Try shopping on-line:If you have a big purchase in mind such as a new lap top, the internet is a great tool for quickly being able to research the best deals.  Save the time, energy and cost of trawling around all the big stores by looking up the latest deals on the internet first.  You’ll quickly be able to see which stores have the items you want at the price in your budget before leaving your home.

If you’re heading out this weekend with the children to get some back to school supplies, clothing, electronics, try leaving the credit cards at home before you go too.  It’s a great way to force yourself and your children to stick to your list and your budget and not be tempted to add a few more things to the shopping cart you didn’t originally intend to buy.

If you’re looking for further budgeting advice or if you’d like to talk to myself about options available to deal with debts and debt repayment options such as a Consumer Proposal, call our office today or 310-PLAN or email me your questions.

Howard Hayes - Client Services - Hoyes Michalos & Associates Inc

If a lender’s efforts to recover a debt are not successful, they often hire a third party collection agency to try to recover their money.

A piece of advice we always give our clients is not to ignore the collection calls.  It will likely only make things worse.  Even if you have little or no money and know that you’re not going to be able to meet the demands of the collection agents, ignoring them will only leave them guessing as to why you’re not making payments and they’ll continue to call.   

Here are three options to stop collectors from calling:

1. Negotiate with them and work out a plan. Some collection agents are better than others.  Not all of them, but some collection agents are slowly realizing that it may benefit everyone to work out a reasonable plan with you rather than coercing you into unrealistic repayment plans.
2. You can file a Consumer Proposal with a licensed trustee, or
3. File for Personal Bankruptcy which, like a Consumer Proposal will legally protect you and force them to stop all collection actions against you. 

Collectors are often on  commission  (they get paid more if they can collect more money from you) so one incentive they have to call as often as they do and make demands is that by collecting money from you they are increasing the size of their own pay cheque.

In Ontario, collectors are obligate to stick to very specific rules when it comes to collecting debts, however based on what many of our clients tell us.  It’s also apparent that not every collection agent sticks to these rules.

• You’re entitled to be notified in writing first, that your account has been assigned to them for collection.
• If calling you, the collector must clearly identify themselves, who they work for, and amount owing.
• They cannot make calls that may be considered harassing to you and your family.
• They cannot give you false or misleading information
• When collecting a debt, they can only call other people to confirm phone number and address.
• They must have written permission from the original creditor to take any legal action to collect a debt from you.

A full list of regulations can be found on the Ontario Government website.

The most important factors to remember if collection agents are calling you are that you have rights and most importantly, you have options.

At Hoyes Michalos & Associates Inc, we’re happy to provide you with the advice you need to deal with collection agents that call and to help you with ways to bring your debts under control.  We can discuss your options either on the phone or we can arrange to meet with you in our office for a no charge consultation.   Contact us by sending an email with any questions you may have or call me at 310-PLAN or our local number (519) 622 3773.

Howard Hayes - Client Services - Hoyes Michalos & Associates Inc

I met with a gentleman this morning in our Cambridge office that was looking for ways to solve his debt problems that were largely caused as a result of his previous employer having to lay him off during the economic downturn of 2009.  He claimed employment insurance benefits whilst laid off which allowed him to at least be able to pay his rent and feed his family, but he had nothing left over at the end of the month for his ever increasing credit card debt.

He had just found out earlier this week that he had been offered a job at a machining plant in Cambridge and he’d be guaranteed full time hours.  This was great news for him and he’s excited to be returning to finally be returning to work after a 9 month layoff.  However with his credit cards going to collection agents for unpaid balances, he’s left unable to meet their demands of full payments on the accounts and came to us for help. 

He does not want to file for personal bankruptcy and now that he has a full time job he wants to pay back the money he owed on his credit cards as he is worried that now he is working again, if the collection agents found out where he was going to be working that they could contact him there or even worse, garnishee his pay if he did not pay them back soon. 

He’d like to offer to pay back as much of his debt as he can reasonably afford over a period of time and as he’s struggling to negotiate with the collection agents himself,  we discussed how a Consumer Proposal works and what terms he could realistically afford and he decided it would be the perfect solution for his debt situation.

After he left the office, this prompted me to look up some statistics as his story is one we’re coming across more frequently here in our Cambridge office.   

The latest statistics provided by the Office of Superintendent of Bankruptcy show a decline in the number of Personal Bankruptcies being filed in Cambridge, Ontario.

Howard Hayes

Insolvency Filings in Cambridge during the first 6 months of 2010:

144  Consumer Proposals

108  Personal Bankruptcies

352  in total

In the first 6 months of 2009, the total number was over 400.

A decline in the number of people filing personal bankruptcies in Cambridge is good news for the city and its residents.   Most indications are that the economy is starting to show signs of recovery in 2010 when compared to downturn of 2008 and 2009.    

The obvious sign here is that more people are returning to work and as a result are finding ways to deal with debts they have without having to turn towards a bankruptcy or proposal.

To further demonstrate this, of those people filing a bankruptcy or consumer proposal in 2009, 31% filed a consumer proposal. In 2010, the number has jumped to 41%.  This is a clear sign that more people prefer to opt for a proposal where you’re able to negotiate a settlement with creditors to have your debts paid over a period of time at an affordable rate. 

Like the story of the gentleman above, the numbers confirm that he is not alone. 

Here at Hoyes Michalos & Associates Inc in Cambridge we’re happy to meet with you at one of our ‘no charge’ consultations or we can talk on the phone if you prefer.  We’d be happy to talk with you about all your available options that you have to deal with your debts such as the Consumer Proposal the gentleman in our story above will file.  The local number for our office is (519) 622 3773, or send me an email with your questions and I’ll respond personally to you.

Howard Hayes

Most Ontarians have tried their luck at winning the jackpot, as the prize amounts are enough to change anyone’s life dramatically in an instant.  Having said that, my own personal winnings to date amount to about $20.

During a Bankruptcy, lottery winnings are considered a “Windfall”.  A Windfall is defined as “A sudden, unexpected piece of good fortune or personal gain”.   Windfalls are considered an asset of the estate and should be turned over to the trustee for distribution to your creditors during the period of your bankruptcy. 

A windfall may not just be lottery winnings; an inheritance is another example of a windfall along with valuable gifts received and certain types of insurance/compensation payouts.

If you’re bankrupt and you receive a windfall, you won’t necessarily lose the entire windfall.  If you receive a windfall you’ll want to talk to the trustee about your options.  It would be a nice problem to have if it happens to you!

One option would be to simply surrender the funds to the trustee.  The trustee will arrange to pay the creditor’s claims and then will apply to the court for your discharge from the bankruptcy.  The trustee will be allowed a fee and then, if the court agrees, the surplus funds remaining will be returned to you. The bankruptcy however, will still remain on your record.

Another option would be to discuss with the trustee the option of offering the creditors a proposal.   With the approval of the creditors and the court, the bankruptcy would be annulled and off your record and the creditors would receive the funds much earlier.

Clearly, none of us have a crystal ball and can predict if we will ever win the lottery, but if you know there may be a chance that you will be receiving an inheritance in the near future or other form of windfall, it’s important to remember in a consumer proposal, the trustee does not have control over your assets, therefore if you receive a windfall, the asset remains yours and you would be in a position to decide what to do with the windfall. 

If your original proposal is accepted by the creditors, they cannot later demand repayment of the full original debts, because of your good fortune.   It is important however to disclose an expected windfall to the creditors at the start of the process if you are aware of it.

If you find yourself in a financial crisis and are considering a Bankruptcy or Consumer Proposal and know there is a possibility of an inheritance or other windfall sometime in the near future, give our office a call to discuss your options.  As well as helping you to establish a plan to get your financials back on track, when you meet with us here at Hoyes Michalos & Associates Inc , we’ll discuss implications of questions such as this so that you’re fully informed and can make the best decisions possible for you and your circumstances.

Howard Hayes

But what happens if payments to your provider get behind?  Can Cell Phone Bills be included in Bankruptcies & Consumer Proposals?

This question is one of the most common questions that we come across from people we meet with in our Cambridge Office.

The simple answer is yes.  However, you must be willing to cease usage of the service prior to filing the Bankruptcy or Consumer Proposal.   If you continue to use the service after filing a Consumer Proposal or a Bankruptcy or make a payment to the provider after the date of filing, you will then re-confirm your contact with the provider and they will continue to hold you responsible for the debt.  

Some companies that provide cell phone services may also cancel other ‘bundled’ services you have with them such as Internet, Cable.  A bundled account is typically one account; therefore if you include one service from the bundle into a Bankruptcy or a Consumer Proposal, they may exercise the right to cancel all your bundled services on that account.

Additionally, if you have a cell phone that is currently in good standing, but you get behind during the course of a Bankruptcy or Consumer Proposal, you will be unable to include this debt in the proceedings at a later stage.  

When you meet with one of our professional staff here at Hoyes Michalos & Associates, we’ll review your monthly budget with you before you file a Bankruptcy or a Consumer Proposal to help you make the decision as to whether or not continuing with a service such as a cell phone contract is feasible.  It’s often the case that if you bring your debts under control through filing a Consumer Proposal or Bankruptcy that this will free up money within your budget to allow you to continue with a cell phone service as normal.  You may also consider even needing a landline – perhaps just having a cell phone negates the need to have two different numbers to be available on.

If these are decisions you may be facing or if you’re seeking help with budgeting and dealing with debts, then send me an email or give our office a call at (519) 622 3773 or 310-PLAN and let’s get started.

Howard Hayes

Here at, Hoyes, Michalos & Associates Inc., have advised clients in Cambridge from our Cambridge bankruptcy office since 1999.

With offices in Cambridge, Kitchener, Guelph, as well as other cities in Ontario, the team here at Hoyes, Michalos & Associates Inc. has a wide range of experience, and can meet clients in Cambridge or many surrounding communities.

Cambridge clients are unique, and have different issues than residents of other cities.

For example, housing costs in Cambridge tend to be lower than in Hamilton, Mississauga, or Toronto. However, with no direct commuter link to the city of Toronto, many Cambridge residents who work in Toronto, Hamilton, or Mississauga, thend to find that their lower housing costs are partially offset by increased gas and other transportation costs.

Cambridge is also home to large automotive manufacturers and other industries. These employers create jobs, but we still deal with many clients that have gotten behind on their payments and need help.  When the automotive industry is hit hard like in 2008/9, a lot of industry in the Cambridge area suffers too as a result.

Regardless of your situation, we are here to help work out a solution that’s right for you and your family, so send us an email or give us a call at 310-PLAN, and let’s get started.

Howard Hayes

A lot of people think that if they simply ignore all the calls for a while, they will eventually stop.  Unfortunately, the complete opposite can happen.  In fact with modern day technology, most collection agents now use computerized auto dialers that keep calling at set times of the day until someone in the house picks up.

I would never advise someone to ignore calls from creditors.  Not only will they not stop, but the creditors will just try harder.  They might call more often, or find different numbers to call you on such as friends/family/employer.  They’ll also send threatening notices in the mail.  Eventually, they will go to court and attempt to get a wage garnishment against you.  For a consumer debt, that means your employer must give up to 20% of your gross pay to the creditor.   Obviously, a wage garnishment is much worse than some pesky phone calls and you want to avoid this happening.

Ignoring collection calls will only make your problem worse.  The only way you can get them to stop is by one of these three options.

1. Finding some way to pay at least some of the money you owe.  You might try to make a deal with them to pay your debts in a way you can afford.
2. You can file a Consumer Proposal with a licensed trustee, or
3. File for Personal Bankruptcy which, like a Consumer Proposal will legally force them to stop all actions against you. 

If you would like to discuss any of these options for getting your creditors to stop calling, I would be happy to speak with you.  Call 519-622-3773 or send me an e-mail and we can make it possible for you to pick up the phone without fear!

The Hoyes Michalos Rotary Run Team

As proud sponsor and supporter of the event, Hoyes Michalos & Associates Inc  Cambridge Office entered a team this year.

Although it’s not about where you finish, we’d not do this blog justice if we failed to mention that Adam and Scott from our Kitchener Office both won medals in their respective age categories and that Hoyes Michalos won the overall team event.

The Cambridge Times reports that this years Rotary Run will also feature special guest Walter Gretzky.

Walter Gretzky

If you’ve not already registered, it’s not too late to join.  The registration fees for each race is $20 and $25 respectively.

Doug Hoyes

Scott Schaefer

Our Cambridge Office Trustee, Doug Hoyes will be running this year along with other members of the team here at Hoyes Michalos & Associates.