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

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

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.

However counselling services are also offered outside the scope of a Bankruptcy or Consumer Proposal.

Danielle Ratford & Glyn Bickford

Friday I sat down with Glyn Bickford a credit counsellor from Credit and Debt Services, who performs counselling for people from Cambridge who are experiencing financial difficulty.   I took this opportunity to ask her some questions related to her services and the benefits of credit counselling. Here are some highlights from our discussion.

Q: Should I meet with a credit counsellor before I meet with a Trustee In Bankruptcy?

A:  Sometimes clients will come in to see a credit counsellor before meeting with a trustee because they feel intimidated by the process, by meeting with a counsellor we can assist them and guide them in the appropriate direction for their situation. We are able to help initiate the process should they decide to file a Bankruptcy or Consumer Proposal and work closely with the trustee.

Q:  What do you feel is the biggest misconception about credit counselling?

A: Often times, people I meet with feel as if they are going to be judged with regards to the current situation they are in and can sometimes be defensive because of it. A credit counsellor is not there to judge, rather they are there to help and make the client feel comfortable discussing their situation. Also, sometimes people assume that the counselling session will take place in a group setting, which is not the case, all our sessions are completed in a one on one format.

Q: What would you say is the biggest benefit of credit counselling? 

A: Budget management is an important topic that we discuss; a budget is the foundation of financial management. Sometimes I will meet with clients who have no experience with creating a good budget, and they find this to be an extremely helpful and valuable tool.   When I meet with people during a Consumer Proposal or Bankruptcy, the service is provided at no cost to the client, so its a good opportunity to get professional advice for free.

Q: What are some topics I can expect to discuss during a session?

A: First and foremost budgeting, we will also discuss the causes of your current financial situation, and warning sings of financial difficulties going forward. We discuss what percentage of your income should be designated for certain expenses such as debt repayment, as well as ways to re-establish credit. 

Set up a meeting today with a professional that can help you.

Q: How can a credit counsellor help someone through a Bankruptcy or Consumer Proposal?

A:  Credit counsellors can help individuals through the Bankruptcy or Consumer Proposal process by assisting with money management skills for the future, as well as explaining any questions you have about the Bankruptcy or Consumer Proposal process. However one of the biggest advantages of meeting with a credit counsellor is being able to “share” the stress by discussing your feelings and talking through the process and what lead to your current situation. Clients will often leave counseling sessions feeling like they have gained a better understanding of how to manage their finances as well as a renewed sense of hope and like a weight has been lifted off their shoulders.

If you feel that meeting with a local credit counsellor such as Glyn from Credit & Debt Services will be beneficial or are simply considering your options, call us at 519 622 3773 or send us an email we would be happy to help you make a plan to deal with your finances.

Does this sound like you?

What can you do?
Individuals in this kind of situation have a number of options. Obviously without a regular income it is difficult to save up enough money to pay back your debts. Solutions to this problem include a debt management plan, a proposal to creditors, but most likely bankruptcy.  In a bankruptcy some assets may be liquidated and the money is used to pay back your creditors. It is one of the fastest ways to get rid of debt.

If this sounds all too familiar and you’re looking for help, call our office today at 519 622 3773 or email me your question.

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.

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.