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!

Danielle Ratford - Client Service Specialist - Hoyes Michalos & Associates Inc

With the summer months fast approaching us I thought it would be useful to share some money saving tips to help cool off spending in the heat of the summer.

Here are my top 5 tips:

Turn down the Air Conditioning- Some days can be sweltering during our Canadian summers, but you can take advantage of our cool nights. Open your windows and let the cool air in. It’s good to breath in the fresh air and good on your wallet. Less Air conditioning means less energy which equals more money in your pocket.

Keep your summer holidays local- Everyone needs some form of get away to unwind and enjoy time with family and friends especially during the warm months. Check your local newspapers and blogs to scope out free events in your area. There is practically something going on every weekend in the summer, from Music Festivals in local parks, to out door movies at City Hall. Most of these events are offered for free or at a small fee, these events are local and support your community. Click here for more information

Walk, Bike, Rollerblade to work- In the summer month’s gas prices often peak. If you live close enough to your place of employment, why not consider leaving the car at home on nice days and walk to work. You will save on gas, and get some exercise at the same time. If you do this a couple times a week, you will be amazed at the savings this can generate. Our Region is participating in the 11th Annual commuter challenge, which challenges all of us to consider a more eco friendly to travel. For more information on how to get started check out the link below.

Hang your clothes outside to dry-Instead of using the clothes dryer to dry your clothes, hang them out to dry on warm days. You can purchase a clothes line from your local hardware store which are relatively inexpensive. Using clothes lines to dry your clothes will again cut down on the energy you use and are friendly for the environment.

Create a summer budget- Summer time is often one of the busiest times of year for some people. It is important to create a budget to achieve as much as possible during the summer without causing a strain financially. Set up a budget for all areas, but include summer specific categories examples of areas to consider could be vacation or day trips and parties. It is important to create a realistic budget and stay within it.

If you finding yourself in a position where you cannot stay within your budget and  are stretching beyond your means each month and you are considering your options or need guidance with your financial situation, feel free to give at 519-622-3773 or send us an email to discuss your options.

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. 

Danielle Ratford

Today’s post will look at 5 reasons why filing a Consumer Proposal may be a better option for you than filing for Personal Bankruptcy. 

 If you compare Bankruptcies and Consumer Proposals side by side, what stands out the most is Consumer Proposals are easier, less “complicated” if you will.

Here are the top 5 reasons why:

• 1  -  In a consumer proposal you still have control of your assets.

In a Bankruptcy you “assign” your assets to the trustee.  In a proposal, you remain in control.  You are still able to manage, and make withdrawals from your investments if you so chose.

You lose this right in a bankruptcy and you could even lose the asset all together.  Recent contributions to RRSP’s will be seized by the trustee and any investments such as RESP’s, Canada Savings Bonds, Stocks and Shares can be collapsed and the proceeds distributed to your creditors.

•  2  -  With a Consumer Proposal all the work is done at the beginning.

It’s less complicated than a bankruptcy. Your regular monthly income and expenses are only assessed once by a trustee and creditors when you file a consumer proposal. 

While Bankrupt you are required to submit detailed Income and Expense statements for the duration of the bankruptcy, which will include supplying copies of pay stubs or bank statements to verify income received.

• 3  -  Your monthly payment will remain the same.

It’s easier to budget knowing exactly what you’re required to pay to the trustee each month.  Where-as in a bankruptcy you might not know from one month to the next exactly what you have to pay, in a proposal it would be easier to plan ahead with a budget knowing you’re payments to the trustee won’t change.   If your income increases during the proposal, specific rules prevent creditors from requesting more money at a later date during the proposal if you’re fortunate enough to be making more money.

During a bankruptcy, the more money you make, the more you’ll have to pay.  Your monthly payments will vary depending on your family income.

The Government sets out thresholds for bankrupts depending on your family size. For example under current guidelines, a family of four’s threshold is $3501(net). If your household income exceeds this amount you are required to pay to the trustee half of the amount you’re over the limit by.  If your household income averages to be more than $200 over the limit, your bankruptcy will be extended, which will result in more fees and possibly more income reporting.

• 4  -  You keep your GST and Income Tax refunds

Many people look forward to receiving, or rely on receiving their quarterly GST cheques as well as a tax refunds during tax time. In a Consumer Proposal you keep your money.  Unless you owed CRA money at the time of filing the proposal, the government will still send you your GST or tax refunds that you would normally acquire. However in a Bankruptcy you will lose your GST and Tax refund during the course of the bankruptcy.

• 5  -  You get the same legal protection and benefits

As a consumer proposal is filed through a licensed trustee and is governed under the same federal legislation as a bankruptcy, you receive the same legal protection from your creditors that you’d receive in a bankruptcy, without having to file bankruptcy.  

A 1^st time bankruptcy remains on your credit score at an R9 rating for up to 7 years after you’ve been discharged from the bankruptcy.  It typically takes between 9 to 21 months to be discharged from a 1^st bankruptcy, so you could be looking at 9 years altogether. 

A Consumer Proposal is better on your credit rating.  It remains on your credit at an R7 rating for three years after you’ve made the last payment.  A proposal can be run over a maximum 5 years, but there is no penalty to you if you choose to pay off your proposal quicker than your original term, so if you have your proposal paid off in 3 years it will be there for 6 years altogether.

If you’d like to discuss a Consumer Proposal with me in more detail, use the form provided and let me know your questions or call me on (519) 622 3773.

Normally, collection agents are hired to collect on a debt when the person you owe to realizes that you’ve not been making the monthly payments on debts.

The collection agent usually has one thing in mind – keep calling, calling, calling until the account is collected.  It can get so bad for the person who owes the money as every time the phone rings they never know if it will be someone asking for money that they simply do not have.  If this sounds like you, you may be wondering how you can stop these annoying calls?

Here’s some idea’s:

Howard Hayes

Firstly, you can try to make a deal with the creditor that you will pay-off what you owe them in a way you can afford.  This is for people who think they can pay back the entire debt but just can’t make the monthly payments that are being asked.  If they are able to make smaller monthly payments over a longer period of time, they could eventually pay back everything they owe.  Sometimes, creditors will agree to this. 

You could also try to make a lump sum deal with the collection agent themselves.  Collection agents are paid by commission based on how much money they get so, if you offer them a lump sum of what you can afford, even if it is not the full amount they might go for it since it means they will get commission right away rather than having to wait many months for it.

File a Consumer Proposal. By offering a Consumer Proposal that is filed through the office of a licenced trustee, you’ll be legally protected from collection agents calling you trying to collect on the accounts.  As soon as the collection agent is made aware of the filing of the proposal (usually within 2 to 5 days of filing) they have to cease their efforts in trying to collect.

File personal bankruptcy.  This will guarantee that these collection calls are stopped.  When you file for personal bankruptcy, all of your unsecured debts are cleared.  As with the consumer proposal above, upon filing a bankruptcy, a ‘stay of proceedings’ is sent to the creditors telling them to stop all the actions they have taken against you, including collection calls.  A stay of proceedings is federal law under the authority of the Bankruptcy & Insolvency Act, so you will have peace of mind when your phone rings knowing that it is a friendly call and not someone demanding cash.

If you would like to learn more about how to stop collection calls, send me an e-mail or call me at 519-622-3773 and I would be happy to answer any of your questions and review all of your options with you. 

Other useful ideas along with an explanation of your rights are explained in more detail in books such as “The Wolf At The Door”, written by expert and previous collection lawyer Mark Silverthorn.  Click here for more information on how to obtain your copy.

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.

Does this sound like you?
The company you were working for was forced to shut down and as a result, you’ve been laid off. You’d been working for the company for quite some time and before the shutdown you were making a substantial income. You have yet to find a new job and are beginning to fall behind on monthly payments. What should you do?

What can you do?
The first step is to make a list of monthly expenses. By identifying your specific expenses, you will be able to determine which ones you can reduce.

If you are still, after reducing your expenses, unable to make your monthly debt payments, you may want to consider a debt management plan, a proposal to your creditors, or possibly even bankruptcy. Bankruptcy should be considered the last resort, but can give you a financial fresh start. To research your options further, contact our Cambridge bankruptcy office for a free consultation, or email your questions to our bankruptcy trustee in Cambridge.