Posted on Thursday, July 21, 2005Is Bankruptcy the Right Thing to Do?The real question that everyone wants us to answer when they come in for a consultation is "how do I know if bankruptcy is the right thing for me to do?"Unfortunately, no one else can make the decision for you. We can tell you how bankruptcy works, what may happen if you file, what is supposed to happen when you finish. What we can't do, is tell you if it is the "right" thing for you. Like most decisions, you need to consider a lot of different things if you are thinking about filing bankruptcy. What will it cost? How long will it take? Who is going to find out about it? etc, etc. A less obvious, but equally important consideration is "how do I feel about filing bankruptcy?" Bankruptcy is one of those legal terms that everyone has heard; most people don't know exactly what it is, but they are pretty sure it's not good. In other words, most people feel pretty bad about even thinking about bankruptcy. That's ok - no one expects you to be happy about, but you need to keep things in perspective. The concept behind bankruptcy is that you need relief from your debts. For whatever reason (and there are many) you have accumulated more debt than you can handle and you need to find a way out. If you've found your way to this website, then you are probably already falling behind on your bill payments. The phone may be ringing. You may be afraid to open your mail. The stress from all of these things already has you feeling pretty bad about yourself and your situation. Then someone comes along and suggests you think about bankruptcy - can it get any worse... This is the turning point. Until you start looking for help to solve your financial problems you aren't really in control. The lack of control is where most of the stress and the "bad feelings" come from. If you've made the effort to find this website and you are experiencing financial difficulties then you should take the next step - book an appointment to see one of our professionals to review your situation (if you don't live near any of our offices then find a local trustee to go and see). Bankruptcy is not the only way to solve financial problems. Whomever you talk to will discuss 3 or 4 different ways to approach your difficulties. The solution that you pick will depend on your situation and on what makes you comfortable. So, we can't tell you if "bankruptcy is the right thing for you to do". We can work with you to help you understand your choices so that you can make an informed decision on how to deal with your financial problems. Once you make that decision some of the stress will be relieved and you will start to feel better about your situation and yourself. Posted by Ted Michalos, CA trustee @ 2:35 PM
Posted on Monday, July 18, 2005What is the First Step If I Need to Go Bankrupt?I am often asked how to start the bankruptcy process in Ontario.At Hoyes, Michalos & Associates Inc., the first step is for you to meet with one of our professionals to determine if bankruptcy is the correct option for you. And when we meet, we will always ask you these three questions: Who do you owe money to? What do you own (a car? RRSP? House?) How much do you earn each month, and what do you spend it on (in other words, we would like to see a simple monthly budget)? During our meeting we will probably ask you many other questions as well, because we need to understand your situation before recommending a solution. For many people, a detailed budget can help them identify areas to reduce expenses, so that they can free up enough cash to pay off their debts on their own. (Try this: add up how much you spend at the coffee shop each month! By making your own coffee instead of buying it, you may be able to cut your expenses enough that bankruptcy isn't necessary). By preparing a budget and cutting expenses, you may find that you qualify for a a debt consolidation loan. If budgeting alone isn't enough, or if you don't qualify for a debt consolidation loan, we may recommend a debt management plan through a licensed credit counsellor to deal with your debts. If your debts are to high for a debt management plan, a consumer proposal may be the solution. Only if all of these options are not suitable for your unique situation will we recommend that you explore the bankruptcy option. So to answer the question, the first step is for you to contact us today, so that one of our professionals can help you explore your options, and show you how to get a fresh start. Posted by J. Douglas Hoyes, CA, Trustee @ 8:06 PM
Posted on Monday, July 04, 2005Joint Credit CardsI was recently asked this question:"I took over a joint credit card after my wife and I separated and only I have charged items to the card since the separation. I have now cancelled that credit card. Does this mean my ex-spouse will not be responsible for the balance on the card if I go bankrupt?" I had to tell this person that cancelling a credit card only means that his ex-wife would not be responsible for future charges after that date, and since the card was cancelled it was unlikely there would be charges other than interest on the outstanding balance. As the card had remained in both names after the separation, the credit card company has the right to look to the ex-spouse to cover the balance if the current user of the card filed for bankruptcy. Cancelling a credit card does not cancel the outstanding debt to either party. A request can be made to the credit card company to remove the name of a co-signor, but in this case it is unlikely they will agree at this point in time. Sometimes the credit card companies will do this if proof can be shown that only one person has charged items to the card since the card was first used. It is better to cancel all joint credit cards upon separation and open new credit cards in just single names. That way the balance on the old card can be paid jointly or covered in the separation negotiations and the new cards will be in the individual names and the responsibility of the charging party only. We encourage you to e-mail us your questions before you decide to go bankrupt, or call us to set up a time to meet to review your options in more detail. Posted by Norma Yau, Trustee @ 2:38 PM
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