Howard Hayes Bankruptcy Cambridge Ontario Blog

Each week Howard Hayes and I meet with lots of people in our Cambridge bankruptcy office who ask me the same question: “Should I go bankrupt in Cambridge?”

Everyone’s situation is different, so for the answer for you, I suggest you give us a call at 519-622-3773, or send us an e-mail, so we can review your unique situation. It”s important that you don’t let the stress of collection calls and letters pressure you into a decision until you have all of the facts.

I consider personal bankruptcy to be the last option to consider when dealing with financial problems. Before considering bankruptcy, I want to explain your other options, such as cutting your expenses so you can pay your debts off by yourself, debt consolidation, or credit counselling. If one of these options works for you, great, you won’t need to go bankrupt.

If those options won’t work, the next option we consider is a consumer proposal. You can read my comments on the cost of filing a consumer proposal . In a consumer proposal we contact your creditors (credit cards, banks, the government, etc.) and work out a plan where you pay a fixed amount each month, and in exchange your debts are eliminated. This is a great option if you have a stable income each month, and can afford to make payments, but have more debt than you can handle on your own.

If you don’t have enough income to file a consumer proposal, then you may have to consider bankruptcy. Personal bankruptcy is also an option if your wages are being garnisheed by your creditors, since a bankruptcy will stop most garnishments.

To find out more, give us a call in Cambridge at 519-622-3773, or call us at 310-PLAN, or send us an e-mail, and we will set up a time to meet to review your options.

Last month I discussed the advantages of filing a consumer proposal. A reader sent me an important question: what does it cost to file a consumer proposal?

The answer is simple to say, but harder to calculate. The simple answer is that a consumer proposal will cost you more than a bankruptcy, because we must offer more to the creditors than they would get in a bankruptcy in order to get them to accept the proposal.

In a bankruptcy you are required to make payments each month based on your income (the more you make, the more you are required to pay). You may also lose the equity in your house, and non-exempt RRSPs.

For example, if your bankruptcy payments would be $300 per month for nine months (based on your income), and you have $10,000 in equity in your house (the difference between the house value and the amount owing on the mortgage), and you have a non-locked in RRSP worth $5,000, the total amount you would pay, or lose, during your bankruptcy would be $17,700.

It may be possible to offer the creditors a proposal where you pay $500 per month for 50 months, or $25,000 in total. Since the $25,000 the creditors will receive in the proposal is larger than the $17,700 they may expect to receive in a bankruptcy, it is likely the creditors will accept the proposal. It’s a good deal for the creditors, because they get more, but it’s also a good deal for you, because you know exactly what you must pay each month, and you don’t lose your house or your RRSP.

Feel free to e-mail me a question or call my office in Cambridge at 519-622-3773 and my staff will set up a meeting so that I can personally review your situation, and help you determine the cost of a proposal in your circumstances.

Most people I meet with in our Cambridge, Ontario office (at 8 George Street North in downtown Galt, above the dentist’s office), ask me if a consumer proposal is better than bankruptcy. The answer depends on your situation.

A proposal is a deal we negotiate with your creditors. For example, if you owe $50,000 on five different credit cards and bank loans, we could offer a proposal where you pay, say, $300 per month for the next four years. That money is then divided amongst your creditors, and if they accept it, you can avoid filing bankruptcy.

A big advantage of a consumer proposal are that once the proposal is accepted you know exactly what you must pay each month, so you no longer have to juggle between all of your debts. Another advantage is that you are not required to sell your house, or lose your RRSP or other assets.

In a bankruptcy, the amount of money you must pay each month that you are bankrupt will increase as your income increases, so bankruptcy can be expensive if your income increases. It is also possible that you will lose your house or other assets in a bankruptcy.

So which option is better? It depends. If you own a house in Cambridge that has significantly increased in value, a proposal may be the best option to deal with your debts and keep your house. If you expect your income to increase, a proposal may also be your best option.

However, if you don’t own any assets, and if you expect your income to remain stable or decrease, a bankruptcy may be the correct option.

Feel free to call my office in Cambridge at 519-622-3773 and my staff will set up a meeting so that I can personally review your situation, and determine which option is best for you and your family.

About two weeks ago I met with a man in our Cambridge bankruptcy office. I’m not going to share specific details of his situation since our consultations are confidential, but I will tell you that he had more debt than he could handle, and he didn’t know what to do.

He needed a plan.

We started by looking at his budget. It turned out that he lives in Cambridge but works in Toronto, so he spends a lot each day on gas for his car, and for coffee and food. He leaves Cambridge early each morning to drive to work. On the way he stops for a coffee and a bagel. He’s on the road all day, and he stops frequently for coffee, another bagel, lunch, and more coffee.

When we added up when he was spending buying coffee and food on the road, it was well over $100 every week. As a result he had no money to pay his debts, and was getting deeper and deeper into debt.

I suggested a relatively simple solution: make your own coffee and lunch.

He said it was worth a try, so left my office and went an bought a big thermos for his coffee. He already had a coffee machine at home.

There was no way he could ever repay his debts; they were too large, so earlier this week he came in to file bankruptcy. He had this amazed look on his face. When I asked him to explain, he told me that he had taken my advice.

Before bed each night he fills up his coffee maker, and he makes his own lunch. When he gets up in the morning he pushes the button on his coffee maker. When it’s time to leave for work, he packs his lunch and fills up his thermos full of coffee.

He still drinks just as much coffee as before, but he told me that other than paying for gas for his car this week, it only cost him about $10 for coffee and lunch; and that’s for the whole week! He told me that before he started “brown bagging it” he was spending $10 each day BEFORE LUNCH!

The look of amazement on his face was because, for the first time in a long time, he had cash in his pocket!

He was not thrilled with having to file personal bankruptcy, but he is happy that now he has a plan, not only to deal with his debts, but also to keep his expenses down so he won’t get into trouble again.

That’s what I call a fresh start, and that’s exactly what we are trying to give everyone. If you need a plan and want a fresh start, give us a call at 310-PLAN (no area code required) or e-mail us and let’s get started.

Personal bankruptcy is designed to give you a fresh start. Once you are discharged from your bankruptcy, you are able to borrow again. (More information can be found in our article on What happens at the end of my Cambridge Bankruptcy?).

Many residents of Cambridge, Ontario require a car to get to work, so being able to borrow to purchase a car is important. Whether you live in Galt, Preston or Hespeler, home ownership is another goal of many Cambridge residents. Does going bankrupt in Cambridge mean you will never be able to borrow to purchase a car or a house?

No, bankruptcy does not mean you will never be able to borrow again. In fact, over the years I have done hundreds of bankruptcies in Cambridge, and many of those people go on to borrow again for major purchases. Your ability to borrow in the future is largely up to you. Here is my advice:

First, start saving money. Put aside a set amount from each paycheque. Having a large down payment will make it much easier to finance a car or house in the future.

Second, keep all of your monthly bills up to date. If you fall behind on your Cambridge Hydro bill, or your phone or gas bill, you will do even more damage to your credit report.

Third, once your bankruptcy is over we will explain other ways to re-establish and repair your credit, such as through a secured credit card.

If you can save money, earn a good income, and take steps to re-establish credit after bankruptcy, you will be able to borrow again.

Tagged as: personal bankruptcy, bankruptcy Cambridge, borrow after bankruptcy

Each week I meet with a number of people in our Cambridge who ask me the same question: “I have a lot of debt; collection agents are calling; do I need to go bankrupt?”

The answer depends on your individual circumstances, so for the answer for you, I suggest you give us a call, or send us an e-mail, so we can meet to review your situation. However, in general, there are a number of factors to consider when deciding whether or not you need to go bankrupt.

At Hoyes Michalos we consider personal bankruptcy to be the last option when dealing with financial problems. Before considering bankruptcy, we discuss other options, such as working it out yourself, debt consolidation, or credit counselling. If one of these options works for you, a bankruptcy may not be necessary.

If those options won’t work, the next option we consider is a consumer proposal. In a consumer proposal we contact your creditors and work out a plan where you pay a set amount each month, and in exchange your debts are eliminated. This is a great option if you have a good income each month and can afford to make payments, but have more debt than you can service on your own.

If you don’t have enough income to file a consumer proposal, bankruptcy may be an option. Bankruptcy also is an obvious solution if your wages are being garnisheed by your creditors, since a bankruptcy will stop most garnishments.

Bankruptcy may be an option, so feel free to give us a call in Cambridge at 519-622-3773, or call us at 310-PLAN, or send us an e-mail a question, and we will set up a time to meet to review your options.

As the bankruptcy trustee responsible for the Hoyes Michalos personal bankruptcy office at 8 George Street North in Cambridge, Ontario, I constantly ask people “what was the cause of your financial problems?”

Recently more and more Cambridge residents have told me that they were living close to the edge before, but with high prices of natural gas and hydro, many people’s budgets are now out of balance. Many residents of Cambridge are commuters; they live in Cambridge but work in Missisauga, Hamilton or Toronto. I’ve even met people that commute from Cambridge to Scarborough every day!

That means that the high price of gas can put a significant strain on the family budget. (As I write this on Saturday July 8, the best price for a liter of regular unleaded is 102.6; you can check the most recent gas prices in Cambridge on the web).

Based on my experience, I don’t think high gas prices lead to personal bankruptcy in Cambridge, Ontario. However, if you already are carrying a lot of debt, and if something else happens, such as a job loss or a marriage break-up, higher living costs can be the “straw that breaks the camel’s back”.

I don’t have a crystal ball, but I doubt that gas prices will start falling anytime soon, so if you are have more debt than you can handle, I encourage you to e-mail me or call us in Cambridge at 519-622-3773 or 310-PLAN so that we can book a no-charge appointment to review your options, and work out a plan to get you back on track.

Tagged as: personal bankruptcy, bankruptcy Cambridge, Cambridge bankruptcy, high gas prices

I had lunch today with Anthony Benedetto, a credit counsellor with the Catholic Family Counselling Centre (at Mellville’s Cafe, in case anyone is interested, because it’s a short walk from both of our Cambridge offices).

Anthony is based out of Kitchener, but meets with clients in Cambridge, usually every Friday. Anthony and the Catholic Family Counselling Centre are the only not-for-profit credit counsellors serving Cambridge, Ontario, and they are a fully accredited member of the Ontario Association of Credit Counselling Services. Despite their name, they are non-denominational; they provide help to the entire Cambridge community.

Anthony told me that most of his work in Cambridge comes from referrals from various agencies in Cambridge, including the hospital and various Employee Assistance Programs at local companies. However, you don’t need a referral to meet with Anthony.

To book a confidential appointment, Anthony suggests you call Catholic Family Counselling Centre’s main number at (519) 743-6333 and ask for credit counseling. In order to fully understand your situation, they will do exactly what we do at Hoyes Michalos: they will ask you for detailed information about your debts, income, assets and living expenses. They will also invite you to one of their information sessions where you can learn more about their programs.

They will then begin a four-step process that includes a detailed financial assessment, identification of your problems, discussion of all options, and then the selection of an action plan.

As discussed in a previous post about their services, credit counselling is an alternative to bankruptcy, where Catholic Family Counselling Centre works out a plan for you to repay your creditors.

Anthony tells me that the typical person he works with in Cambridge has monthly income of between $1,500 to $2,000 per month (although he works with lots of people with income higher or lower than that range), and to pay their debts in full through a debt management plan a typical plan may involve payments of $500 per month over a three to four year period.

Of course no one plan fits everyone, so Anthony will meet with you to work out a plan that’s right for you.

Anthony’s approach is the same as mine: let’s find the solution that works best for you. He may be able to help you work out a budget to get back on track. You may need a debt management plan administered through the Catholic Family Counselling Centre. Anthony may decide that a more appropriate solution would be a consumer proposal or personal bankruptcy, in which case he will give you a list of the trustees in Cambridge that are able to help.

As lunch ended Anthony told me about a client he had recently helped who thanked Anthony for “giving him hope”. I think that’s a great summary of the work Anthony and the Catholic Family Counselling Centre does for the people of Cambridge.

At least once a week someone says to me “sorry I’m late, we had trouble finding your bankruptcy office here in Cambridge.” We have deliberately chosen a non-flashy office; we don’t have a big sign on the door that says Bankruptcy or Consumer Proposals, since in my experience most people don’t want everyone to know that they are meeting with a bankruptcy trustee, which sometimes means our office is hard to find.

Our office is located at 8 George Street North. We are on the second floor of a dental office building. (That’s a picture of our office in the upper right hand corner of this article).

For better directions, you can get a map at Google Maps.

One last word of advice: we are located in downtown Galt, so if you are coming from Hespeler or Preston, beware of Highway 24! It is not unusual for it to take 25 minutes to travel from Highway 24 and Highway 401 to our office at the end of the day. From the north it is often faster to go over to Blair Road and go south on Blair Road. Blair turns into George Street, which is where we are located, and it allows you to avoid Highway 24/Hespeler Road altogether.

For more detailed directions, or to book an appointment, give us a call at 519-622-3773 (don’t forget to dial the area code!) or e-mail me a question.

Tagged as: personal bankruptcy, bankruptcy Cambridge, consumer proposal.

Although you have found this blog entry on the bankruptcy-cambridge.com web site, I don’t want to talk about bankruptcy.

When I meet with people in my Cambridge, Ontario office (on George Street in Galt), I always discuss a little known bankruptcy alternative called a consumer proposal.

A consumer proposal is a deal that we negotiate on your behalf with your creditors. Here’s an example: I met with a person last month who had $25,000 in credit card debt. His hours were cut back at work, and now he is behind on his payments, and some of the credit cards have been turned over to a collection agency. He has a job and can make some payment each month, but he can’t afford to pay what they are asking for; the high interest is just too much.

He knows he owes the money and he doesn’t want to go bankrupt, but he doesn’t make enough to qualify for a debt consolidation loan. The solution may be a consumer proposal.

In this case he offered a consumer proposal where he contributes $200 per month for the next three years; as the proposal administrator my firm, Hoyes Michalos & Associates Inc., takes the $200 and distributes it to the creditors, with the larger creditors getting a bigger share of the proceeds.

Since I file more consumer proposals in Cambridge each year than any other trustee, I am confident that his proposal will be accepted by the creditors. He will have one monthly payment to make, and he no longer has to worry about creditors garnisheeing his wages or calling him at home and at work.

A consumer proposal is not the solution for everyone, but for many people it is the best solution, so I encourage you to e-mail us or call us in Cambridge at 519-622-3773 or 310-PLAN so that we can review your situation and help you decide which option is best for you.