Howard Hayes Bankruptcy Cambridge Blog

Does a First Time Bankruptcy always end after 9 months?

noreply@blogger.com (Howard) — Tue, 22 Jul 2008 20:36:00 +0000

No. The minimum period of time a bankruptcy will take to be administered is 9 months. However, if you have performed your duties and paid the required contributions and surplus income and neither the court/trustee or creditors object to the discharge, then you could receive an automatic discharge after 9 months if it is the first time you've filed for bankruptcy.
Simply put, surplus income is the governments way of saying 'someone who makes $5000 per month will have to pay more to file for bankruptcy than someone that makes $3000 per month'. The thresholds that determine if surplus income would be required are based on the size of your family.

The trustee has an obligation to inform the court of substantial surplus income during the bankruptcy. The typical line of reasoning is that if you have substantial surplus income payments to make during bankruptcy, you probably would have been in a position to avoid a bankruptcy by at least offering a proposal. So typically, if no surplus income was required during the bankruptcy the trustee reports as such and in that regard and the bankrupt could receive the automatic discharge if all the other bankrupts duties were performed.

On the other hand - an extreme example however would be that, if you make $10,000 and you choose to go bankrupt, the courts could decide that at the time of filing the bankruptcy, you had the income to file a viable proposal or avoid bankruptcy by paying for the debts. As such the courts could keep the bankruptcy open for as long as needed to be in order to repay all the debt.
There is no technical limit for which the court can impose an extension to the 9 month period.

So, although typically many bankrupts qualify for an automatic discharge at the end of 9 months, in our experience, with that kind of income, there is a more than small chance that your bankruptcy would be extended for a longer period of time.

If you have questions regarding this article, bankruptcy or surplus income, please call me at 519 622 3773 or email me your questions.

New Bankruptcy Laws

noreply@blogger.com (Howard) — Tue, 08 Jul 2008 19:16:00 +0000

New laws were brought into effect this week regarding filing personal bankruptcy.

The changes that have been introduced this week include the following main points.

* Student Loans - A student loan debt can now be discharged in a bankruptcy if 7 years has passed since you ceased to be a student.
* RRSPs - Under new legislation, all RRSPs and RRIFs (as defined in the income tax act) will be exempt from seizure in a bankruptcy. The only exemption to this, is, contributions you've made to your RRSP's in the 12 months leading up to the filing of the bankruptcy can still be seized.

If you have any questions, or would like to arrange for a free, no obligation consultation in our Cambridge office, please call me on 519-622-3773 or email me your question.

Thanks

noreply@blogger.com (Howard) — Mon, 16 Jun 2008 14:46:00 +0000

Thanks to the following companies with the help and services provided in helping with our Cambridge office renovations.

Budgeting - Stick with it

noreply@blogger.com (Howard) — Thu, 22 May 2008 15:25:00 +0000

For many people, the hardest part about budgeting is trying to stick with it. Like trying to quit smoking, if you don't stick with it, the old habits will come back.

It does not matter what method of budgeting you use in your household, the most important thing to remember is that your budget should be SMART.

Are you being Specific? (are you considering ALL expenses, like saving for a vacation, gifts)
Is it Measurable? (are you tracking your expenses)
Is it Achievable? (do you enough money coming in to cover your expenses)
Is it Realistic? (are your expenses taking you beyond your means)
Is it Timely? (are you budgeting with a goal in mind - saving for a new car?)

No matter if you keep receipts, track expenses, use computer programs or spreadsheets to help you track expenses, remember to try and budget for rainy day expenses - a new muffler, vets bills. The easy thing is to remember the regular items such as rent, hydro, groceries, but we forget to budget for the $20 we might need to buy the brother or sister a birthday gift.

When thinking about your grocery budget, don't forget the extra trips to the corner store halfway through the week to top up with milk and bread... and don't forget the extra $5 you spend on a lottery ticket while you're there!

If you draw up a budget and there is simply more going out than there is coming in, you have to look into other options.

Recognize The Danger Signals - You may have a debt problem, or are going to have one, if:
you continually go over your spending limit or you use your credit cards as a necessity rather than a convenience;
you are always borrowing money to make it from one payday to the next;
your wages have been garnisheed to pay for outstanding debts;
you pay only interest or service charges monthly and do not reduce your total debt over many months;
creditors pressure you for payment, threaten to sue or repossess your car, furniture or television, or hire a collection agency to recover the money for them; or
utility companies cut off service because your bills have gone unpaid.

Once you have started working on your personal budget planning, you will realize that there are only two ways to increase your cash flow each month.
Method #1: Increase your income Method #2: Reduce your expenses
There are many ways to increase your income; consider some of the following suggestions:
1. Work more overtime
2. Get a second job
3. Start a home-based business
4. Take in a boarder or room-mate
5. Try to find a better paying job
Remember to always consider the consequences when you try to increase your income. More overtime may mean less family time which, in the long-run, may not help you at all.
For most people, reducing expenses is a more immediate way to increase cash flow and improve their budgeting than increasing income. How can you do it? Start by looking at every item on your personal budget that you spend money on each month. Can any of those items be reduced?

Consumer proposal
Under the Bankruptcy and Insolvency Act you may make a proposal to your creditors to reduce the amount of your debts, extend the time you have to pay off the debt, or provide some combination of both.

Personal bankruptcy
If none of the above methods solves your debt problem, you may choose to consider filing personal bankruptcy. Filing bankruptcy should be a last alternative if you cannot meet your financial responsibilities through affordable payments over a specific period of time.

If having looked at your budget you feel like you need to discuss it further, please contact me by email or by phone at 519 622 3773 for a free consulation. I'll review your budget and options with you and see if a consumer proposal or personal bankruptcy would help you to be able to budget each month.

The Good, The Bad & The Ugly

noreply@blogger.com (Howard) — Fri, 02 May 2008 20:13:00 +0000

We've all heard the old saying "if it sounds too good to be true, it probably is". There are many schemes and promotions out there promising us "get rich quick", some more logical ideas than others. There is a growing trend of adverts alongside these now promising to "get out of debt quick" too. I met with a couple this week, who approached an agency whose advert promised them freedom from debts, an easy solution to the growing debt load they had... or so they thought.

After attending a meeting with a representative from the agency, they were told about how good the agency was at making deals with credit card companies and how they could reduce their burden. They could make one monthly payment and all their problems would go away. Encouraged that this would be just the solution they were looking for they asked about the monthly payments and the fees. The agency wanted $3000 up front before filing the 'proposal'. Note: I put the word proposal in inverted comma's as the proposal they were offering is an informal proposal and is not a legally binding consumer proposal that only a licensed trustee or consumer proposal administrator can do.

Thankfully they told the agency they wanted more time to think about it. The idea of paying $3000 up front did not seem right to them. They found the phone number 310-PLAN for Hoyes, Michalos & Associates and called to book a meeting with myself for a second opinion. Here at Hoyes, Michalos & Associates, we offer a free consultation service to review your options, which is when they told me about the 'proposal' the agency was offering them as a solution. The first thing they told me was "If I had $3000 dollars, I'd use it pay the debt myself!"

I assured them that we charged no up-front fee for filing a consumer proposal and we proceeded to discuss the advantages and disadvantages of all the options they had to deal with their debts. They were relieved to know that their instincts to not hand over $3000 to the agency served them well. They were happy knowing that a consumer proposal filed with a trustee in bankruptcy was offering them legal protection from their creditors and reduced their debt load to a manageable payment that fit into their monthly budget. Most of all they were relieved that they had just saved themselves $3000!

If you'd like to meet me and discuss ways to help reduce your debt load, call us at 519-622-3773 to set up an appointment, or email me your questions. We offer a free, no obligation consultation service.

Community Support

noreply@blogger.com (Howard) — Tue, 22 Apr 2008 14:35:00 +0000

Once again this year, I'm pleased to announce that we'll be supporting the Cambridge Oldtimers Slo-Pitch League.

See the old guys play ball at Riverside Park or Saginaw Parkway Diamonds on Monday, Tuesday, Wednesday and Thursday evenings during the summer. The season begins this year on May 1^st and runs through to the end of September.

Changing Habits

noreply@blogger.com (Howard) — Thu, 17 Apr 2008 22:19:00 +0000

One expression I've heard a few times that I was reminded of today is "filing bankruptcy relieves you of your debt, it does not relieve you of your spending habits". It's certainly worth some thought. Filing a bankruptcy or a proposal can clear your debts and get you back on track, so it's important to maximize your chances of having a fresh start.

If you filed either a bankruptcy or consumer proposal, you'll be required to attend two counseling sessions with a qualified credit counselor. These sessions are provided for you under BIA (Bankruptcy & Insolvency Act) guidelines and have to be done with a qualified professional counselor that passed the CAIRP National Insolvency Counselors Qualification Course.

Here at Hoyes, Michalos & Associates in Cambridge, I'll help you to set up those appointments with either Glyn Bickford-Jones who works for Credit & Debt Services or Anthony Benedetto, who works for The Family Counseling Centre of Cambridge and North Dumfries or. Both are excellent counselors and highly experienced.

At the first session, they'll discuss money management, spending and shopping habits, warning signs of financial difficulties and, obtaining and using different types of credit. The second sessions expands on the first and also includes discussions on the causes of your insolvency and developing a future plan. At no extra charge, these sessions, we believe in very strongly are a vital part of the process of filing for personal bankruptcy or a consumer proposal.

The sessions with Anthony or Glyn are on an individual basis and they both take the time to ensure the sessions are valuable to you regardless of reasons that may have lead you to file a bankruptcy or proposal.

I believe that, not only are the sessions of great benefit to you, they form an essential part of the process of filing for a bankruptcy or proposal.

If you'd like to talk about credit counseling or ways to help reduce your debt load, call us at 519-622-3773 to set up an appointment to meet me, or email me your questions. We offer a free, no obligation consultation service.

Co-Signed Debts

noreply@blogger.com (Howard) — Fri, 04 Apr 2008 14:46:00 +0000

What does it mean to co-sign a debt? Make sure you understand before you take on the responsibility. By co-signing, you are being asked by the lender to guarantee repayment of the debt. The same reasoning applies to applying for a joint loan/credit line/credit card too. Be sure to think it through before going ahead. If the primary borrower does not pay back the debt, you will assume responsibility to have to. Be sure you want to have this responsibility and that you could afford to pay it back if you had to.

In most cases you'd have to pay back the full amount including any interest and penalties if the primary borrower does not pay. Being joint on a debt does not mean you're only responsible for paying half the debt as the other co-signer has to pay the other half, this is not true, you're both 100% responsible to pay back 100% of the debt. You may also find that the lender will report the status of the loan on the credit reports of both the primary lender and co-signer and as such you'll both be affected negatively if payments are not maintained.

The lender will collect this debt from you. In some cases, the lender can request payment from the co-signer, without first trying to collect from the primary lender. If in default, the lender can and most likely will collect the debt from you using the same methods that they'd use against the primary borrower, such as taking you to court, repossessing pledged collateral and, garnishing your wages.

Filing a consumer proposal or an assignment in bankruptcy will relieve the person who files of the obligation to pay the debt. The co-signer, if not filing a proposal or bankruptcy would still be responsible to maintain payments. That is one reason why a lender would be reluctant to remove a co-signer from responsibility for the loan as they know if one of the two borrowers files for bankruptcy, the other would still be responsible for the debt – they double their chances of having the debt repaid. If neither borrower could pay for the debt, both would have to file separate bankruptcies or proposals in order to be relieved from the debt.

I you are unable to meet your debt repayments, including and debts you have co-signed for, please call us at 310-PLAN or email me your questions.

Common Traps

noreply@blogger.com (Howard) — Mon, 24 Mar 2008 20:44:00 +0000

Having a credit card in today's society can be very useful, however, beware of the common traps. Two of the main ways credit card companies make money is by charging the merchant a fee every time you use the card and by charging you an interest rate on your cards balance. If they can persuade you to use the card they will. We have a common saying here at Hoyes, Michalos & Associates, "use the card as a substitute for cash, not a substitute for borrowing".

Credit Card companies use a variety of ways to encourage you to use the card or open a new account with them. They like to target students and people in their early twenties with advertising campaigns. They are all to aware of the fact that being young and on a low wage, you'll feel more pressure in today's consumer society to use credit to finance purchases your pay cheque can't cash.

One of the first ways is to offer you a "low introductory rate". The envelope will come in the mail with a big colorful 0.9% on the front. Read the small print carefully! The 0.9% will usually only apply for a limited time, and may also only apply to balance transfers. After the limited time is up, the interest rate will jump up to the cards regular rate.

"No annual fee". If you're planning on paying on your balance in full every month, then a card with no annual fees probably makes sense, if not, choose the card with the lowest interest rate. Beware of the wording too, just because you have no annual fee might not necessarily mean you don't have to pay a renewal fee!

"Bonus points". Spending more money on a credit card might allow you to accumulate points towards a holiday or a purchase of a vehicle. Again, beware, the points may only be valid for certain purchases and might only be valid for a certain period of time. The points you accumulate may have an expiry date so if you don't redeem them before they expire, they're useless.

"10% off". More commonly seen in superstores/big box stores, retail outlets will invite you to apply for their credit card when you make a purchase with the offer of 10% off your purchase. Sure, the 10% saving sounds great, but consider if you don't pay off the card within the next couple of weeks, you'll be paying 20-25% interest.

"Win your spending". Another advertising campaign encourages you to spend more in the hope of winning it all at no charge. The odds of winning are slim as the campaign encourages you to go out and spend more money.

These are just some of the ways you're being encouraged to spend money on credit. Try to avoid overwhelming yourself with debt by falling for the traps. Always consider the following questions when applying for a credit card too.

Can I pay for the purchase with cash, or if I buy on credit, can I pay the full balance within 30 days?

Is this a need or a want?

Are you using credit with the belief you'll be able to pay it off by landing the big job soon or winning the lottery?

When the limit on your credit increases it's usually because the credit card company is enjoying making lots of money from you and they want to encourage you to spend more by raising your limit. The interest they make on a $10,000 balance is higher than a card with a $2,000 balance.

If you'd like to talk about credit card debt and ways to help reduce your debt load, call us at 519-622-3773 or email us your questions. We offer a free, no obligation consultation service.

Repossessions to Increase?

noreply@blogger.com (Howard) — Tue, 11 Mar 2008 16:02:00 +0000

Today I met with Greg Matthews from Domus Select. Greg works in the Mortgage business in Cambridge. His company helps people to buy and sell real estate, re-finance 1^st and 2^nd mortgages. They can also help with other products such as secured credit cards and home equity visa's.

Greg was telling me that he is seeing an increase in industry regarding home repossessions. Some mortgage lenders are starting to take more note of the current housing problems being experienced in the United States and are taking steps to avoid similar problems in Canada. Your home could be at risk if you do not maintain your mortgage payments and some mortgage companies in the future may be a little quicker to 'pull the trigger' should you fall behind.

In turn, this could lead to an increase in personal bankruptcies and consumer proposals. Two things could drive this increase

An increasing pressure to try and keep up with mortgage payments may mean resorting to unsecured credit (credit cards) to pay for other day to day expenses such as groceries, leading to higher interest charges and higher monthly repayments.
If your home is repossessed and the sale by the bank does not generate enough monies to cover the outstanding mortgage balance and fees, you could still be liable to pay those expenses and shortfalls.

If you're experiencing financial difficulty, my suggestion would be to give our office a call at 519 623 3773 and talk to myself or one of my colleagues. We offer a free, no obligation consultation service. Everyone's situation is different and we can help to explain various helpful options for you to consider. From budgeting advise, credit counseling, consumer proposals, bankruptcy or referring you to a mortgage broker such as Greg, we can help you to understand the pro's and con's of each option so you may decide on what the best solution for you is.

Call 310-PLAN or email us your question today.

Bankruptcy with a mortgage

noreply@blogger.com (Questions) — Wed, 27 Feb 2008 09:49:00 +0000

Question: If I do need to declare myself bankrupt, I believe I may asked to pay some equity from my house. Would it be worth transferring the house over to my wife's name?

Answer: Unfortunately you can't transfer your house to your wife and then go bankrupt. When you file bankruptcy, one of the questions you must answer is "have you, in the last five years, transferred or disposed of any real estate". In your case the answer would be yes, so if you went bankrupt you would be required to pay back the equity.

We suggest that you get a house appraisal, and a confirmation of the balance owing on your mortgage, and then make an appointment to see us (call 519-622-3773 to set up an appointment) and we can calculate the equity in the house.

If the equity is large, another option may be to file a consumer proposal.

Should I Go Bankrupt in Cambridge?

noreply@blogger.com (J. Douglas Hoyes, CA, Trustee) — Sat, 23 Feb 2008 16:48:00 +0000

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.

What does it cost to file a consumer proposal in Cambridge?

noreply@blogger.com (J. Douglas Hoyes, CA, Trustee) — Mon, 04 Dec 2006 19:19:00 +0000

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.

Should Cambridge residents consider a consumer proposal instead of bankruptcy?

noreply@blogger.com (J. Douglas Hoyes, CA, Trustee) — Wed, 15 Nov 2006 19:06:00 +0000

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.

For a fresh start during your bankruptcy in Cambridge, make your own coffee

noreply@blogger.com (J. Douglas Hoyes, CA, Trustee) — Fri, 20 Oct 2006 16:11:00 +0000

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.

When my bankruptcy in Cambridge ends, will I ever be able to borrow again?

noreply@blogger.com (J. Douglas Hoyes, CA, Trustee) — Tue, 19 Sep 2006 23:41:00 +0000

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

How Do I Know If I Need To Go Bankrupt in Cambridge?

noreply@blogger.com (J. Douglas Hoyes, CA, Trustee) — Fri, 25 Aug 2006 16:14:00 +0000

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.

Do High Gas Prices Lead to Bankruptcy in Cambridge, Ontario?

noreply@blogger.com (J. Douglas Hoyes, CA, Trustee) — Sat, 08 Jul 2006 19:53:00 +0000

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

Credit Counselling in Cambridge, Ontario

noreply@blogger.com (J. Douglas Hoyes, CA, Trustee) — Fri, 23 Jun 2006 18:30:00 +0000

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.

I Can't Find your Cambridge Bankruptcy Office!

noreply@blogger.com (J. Douglas Hoyes, CA, Trustee) — Mon, 19 Jun 2006 15:43:00 +0000

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.

Consumer Proposals - Cambridge's best kept secret alternative to bankruptcy

noreply@blogger.com (J. Douglas Hoyes, CA, Trustee) — Tue, 06 Jun 2006 00:41:00 +0000

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.

Credit Counselling: Is it an alternative to bankruptcy in Cambridge?

noreply@blogger.com (J. Douglas Hoyes, CA, Trustee) — Sat, 13 May 2006 00:20:00 +0000

Most of the people I meet at the Hoyes Michalos personal bankruptcy office in Cambridge, Ontario, do not want to go bankrupt. Since I also view bankruptcy as an option to use if no other options are available, I always explain your bankruptcy alternatives, including dealing with your financial problems yourself, getting a debt consolidation loan, and filing a consumer proposal.

Another popular alternative is called credit counselling. In Cambridge, there is one not-for-profit credit counseling agency: Catholic Family Counselling Centre. Their credit counselling services are available to all residents of Cambridge and Waterloo Region, and neither religious affiliation nor ability to pay is ever a determinant of service.

The credit counsellors at Catholic Family Counselling Centre can help you with budgeting, and will help you deal with your creditors through a debt management plan. In a debt management plan your creditors agree to accept payment in full over a period of no longer than five years, and in exchange agree to waive all further interest.

Debt management plans work best if you have the ability to repay your debts, but need help dealing with your creditors. For example, if you have $10,000 in credit card debts, and can afford to pay $500 per month, a debt management plan may be a good solution for you. However, if you have $50,000 in debts, a debt management plan won't work, because it would take too long to repay your debts. In that case a consumer proposal or bankruptcy may be more appropriate.

We can help you calculate the payments you may be required to make in a debt management plan, a consumer proposal or abankruptcy, so please contact us to help you make a decision about which option will best help you get back on track financially.

Will I lose my house if I go bankrupt in Cambridge?

noreply@blogger.com (J. Douglas Hoyes, CA, Trustee) — Fri, 21 Apr 2006 00:49:00 +0000

As I mentioned in my previous blog entry, house prices have increased in Cambridge over the last few years, so many people are borrowing against their houses to repay higher interest rate debts.

If your debts are very large, you may be considering bankruptcy. If you own a house, here's what you need to know:

If you go bankrupt in Cambridge, the trustee is required to recover the equity in your house. For example, if your house is worth $150,000, and the mortgage is $130,000, then your house has equity of $20,000. (I am over-simplifying this example, because real estate commissions and other costs would be considered in determining equity). If you went bankrupt, you would be required to either pay $20,000 to the trustee (to be distributed to your creditors), or you would be required to surrender your house.

If you have a house with no equity, then you would not lose it if you went bankrupt, provided you kept making your mortgage payments.

If your house has equity, but not enough equity to refinance your debts, you could consider selling the house, or you could consider a consumer proposal as a way to deal with your debts but keep your house.

This is a complicated area of bankruptcy law, so I suggest you contact us to arrange a consultation so we can review your situation in more detail.

I own a house in Cambridge - should I get a second mortgage instead of going bankrupt?

noreply@blogger.com (J. Douglas Hoyes, CA, Trustee) — Fri, 14 Apr 2006 12:27:00 +0000

The real estate market in Cambridge, Ontario has been strong for a number of years. If you bought a house a few years ago, it has probably increased in value.
If you have other debts, such as credit card debts, should you borrow against the increased value of your house in Cambridge to repay your debts?

The answer depends on the equity in your house, and the amount of your debts.

If you own a house in Cambridge worth $200,000, and have sufficient income, you would typically qualify for a conventional mortgage of 75% of the value of the house, or $150,000. If you currently have a $120,000 mortgage, it is therefore possible that you could borrow an additional $30,000 against your house, either as a second mortgage or as a line of credit secured by your house.

If you have $30,000 in credit card and other debts, this approach may make sense. You borrow against your house at relatively low mortgage interest rates, and use the money to repay your high interest credit card debts. Of course, if you have $60,000 in debts, this approach won't work.

In my next blog entry I will discuss whether or not you lose your house if you go bankrupt in Cambridge.

My conclusion: if you can re-finance and repay all of your debts, and still afford your now increased mortgage payments, a second mortgage is a good bankruptcy alternative. However, if your debts are too high, a consumer proposal may be an option.

Feel free to e-mail a question and we will help you review your options.

I Don't Want to Go Bankrupt - What are my Bankruptcy Alternatives?

noreply@blogger.com (J. Douglas Hoyes, CA, Trustee) — Sat, 25 Mar 2006 01:41:00 +0000

Most of the people who contact our helpline at 310-PLAN don't want to go bankrupt. They are having financial problems, and they want to explore all of their bankruptcy alternatives. I advise them that they have a number of options.

First, try to deal with your debts on your own. This might involve reducing your expenses to free up cash to use to repay your debts, or perhaps working more overtime or getting a second job to increase your income.

Second, a debt consolidation loan may help reduce your monthly payments, by borrowing at a lower interest rate to repay high interest credit card debts. Of course this option only works if your credit is good enough to get a loan.

Your third option is a debt management plan, a repayment arrangement offered by non-profit credit counselors. In Cambridge, Ontario the only not-for-profit credit counselling service is Catholic Family Counselling Centre. They are based in Kitchener, but have office hours in Cambridge, Ontario once per week. Catholic Family Counselling will take all of your credit card and unsecured bank loan debt and negotiate a repayment plan where you pay your debts in full, but with no further interest in most cases.

If you can't afford to repay your debts in full, the next option is a consumer proposal. Like a debt management plan we will negotiate a repayment plan with your creditors, but in most cases you will not repay the debts in full.

If you can't afford the payments in a consumer proposal, the final option may be bankruptcy.

Each person's situation is different. We will meet with you personally to review each of the above options, so if you have more debt than you can handle, contact us to arrange a no charge initial consultation. We will meet with you at our office at 8 George Street North in Cambridge to review your options.