Posted on Friday, June 30, 2006Can Personal Bankruptcy Relieve Stress?Every week I meet with people who are feeling overwhelmed by their debts. Bill collectors are calling, and they don't know where to turn for help.About two months ago I met with a person who told me that the stress of her situation had gotten so bad that their doctors were treating her for high blood pressure, stress, and depression. She told me that her doctor suggested she contact a financial professional, such as the staff at Hoyes Michalos & Associates, for help. I met with her and we reviewed her options. She had a job, but since she had missed work due to illness, she was behind on her bills. Collection agents were threatening to take her to court, which only increased her stress levels. She was having trouble sleeping, and her doctor had to increase her blood pressure medication. We discussed credit counselling, consumer proposals, and personal bankruptcy. Based on her income, she decided that a consumer proposal was the best option. We filed the proposal, and it was accepted by her creditors. I saw her again last week, and she seemed like a new person. She told me that filing the proposal was a very difficult decision, but once the process started she felt a tremendous sense of relief. The proposal did not solve all of her problems, but she is not getting phone calls from bill collectors, and she is able to get a good night's sleep. Her stress levels are lower, and even her blood pressure has improved! Financial problems are not a life sentence. There is help, so click on the e-mail link on this page, or contact one of our Ontario offices to book a free consultation with one of our professionals, and let's get started. Tagged as consumer proposal, personal bankruptcy, bankruptcy Posted by J. Douglas Hoyes, CA, Trustee @ 12:33 PM
Posted on Friday, June 23, 2006Update to the Exemption for AutomobilesOn June 22, 2006, new legislation was passed in Ontario dealing with the equity in an automobile in a bankruptcy. Prior to June 22, 2006, an automobile was exempt from seizure if its value was less than $5,650. For example, if the car was valued at $5,550 it was not seized by the trustee, but if it was worth $5,651 it was seized or the bankrupt had to pay the trustee the value of $5,651.Under the new legislation, the first $5,650 is exempt from seizure. For example, if the car is valued at $5,700, the bankrupt person has to pay the difference of $50 ($5,700-$5,650) to the trustee. This new wording will help people filing for bankruptcy get a fresh start. To discuss your financial situation and develop a plan that is right for you, call a Hoyes, Michalos and Associates office near you at 310-PLAN or e-mail a question. Posted by Rebecca Martyn, CGA, CIRP, Trustee @ 3:54 PM
Posted on Thursday, June 22, 2006Spouse's Debts and BankruptcyWhen meeting with couples or soon to be couples, I am often asked if the debts of one will impact the other, if the one with the debts files for personal bankruptcy. This is often the situation when couples are just starting out and one has debts from prior to the relationship that they are paying.Simply, your debt is yours and yours alone. You only share the debt with someone if they share the debt with you jointly, have co-signed for the loan or have an extra or in many cases a supplementary credit card. So just because you are married or common-law with someone does not mean that there is a financial relationship and you share or are responsible for the other person's debts. Thus, there should be no effect on your spouse's credit if you have no financial relationship with respect to debts. The one area of impact that does come up, is in the case of a bankruptcy by one of the parties. One duty for the bankrupt person is to file a monthly income and expense statement that indicates not only the bankrupt's income or take home pay, but also the total household income. To verify this information the trustee must also get any paystubs or income information from all members of the household, not just the bankrupt person. This is so the trustee can determine if there is any surplus income for the household that will then result in a surplus payment by the bankrupt. This is a complicated calculation, and if you go bankrupt your spouse's income has only a very minor impact on your payment, so feel free to e-mail a question or contact our nearest office for full details. So there is some homework, so to speak, in a personal bankruptcy that a bankrupt person must complete that will require information from their spouse or common-law but it should not affect their credit. If you would like to discuss this and other options available to you in order to deal with your debts, please contact us at 310-PLAN and set up an appointment for a free consultation. Posted by Sandra Sykora, Trustee @ 11:23 AM
Posted on Tuesday, June 20, 2006The Financial Impact of IllnessThere are many reasons that so many Canadians find themselves unable to manage their debt. I see many clients who have fallen behind in their payments to creditors because of illness. As long as we are working, and able to meet our financial obligations, life continues on. So often, however, we are faced with a crisis that suddenly, and often without warning, changes our lives in a very dramatic way.Dealing with illness is one such crisis. We can be well one day, only to wake up to a debilitating illness the next. In my former career on the front lines of the healthcare system, I was part of a team that assisted people back to the path of physical wellness. Now, as a member of the Hoyes Michalos & Associates team, I see another side to illness; the side that deprives people who are ill of their ability to manage financially. The combination of financial and physical stress is compounded by the emotional stress that accompanies illness. If you are dealing with illness, and are struggling to manage financially, we may be able to help. Call 310-PLAN to book a free consultation, or e-mail us a question, and let's get started. Posted by Susan Jung, MBA @ 11:08 AM
Posted on Monday, June 19, 2006Are you being "harrassed" by collection agencies?On June 1st, the Government of Ontario announced changes in the regulations to the Collection Agencies Act. These changes were in response to complaints from consumers about collection procedures by agencies and include the limiting of threatening or profane language and the number of phone calls from the agency.Some of the highlights are: - the agency cannot contact the debtor until 6 days after a notice is sent to the debtor which outlines information about the debt and the collection agency - limiting contact of the debtor to 3 times in 10 days, unless through ordinary mail, once contact has been made - limiting contact on Sundays from the hours of 1 to 5 pm - limiting contact if the debtor has supplied written notice of dispute of the debt or referred the collection agency to a lawyer - continuing to contact the person if the collection agency has been advised they are not the person the agency is looking for (unless the agency takes precautions to show they are the person) - the collection agency cannot give false or misleading information to the debtor - the agency cannot use threatening or profane language, or undue and excessive pressure to collect. Every week Hoyes Michalos meets with people who have experienced all these types of behaviour from a collection agency. They meet with our professionals to discuss their options and sometimes it means referring them to the proper government agency who will register their complaint against the agency. If you are experiencing the "harrassment" of a collection agency and feel you are unable to maintain your debt payments, please e-mail us or call us at 310-PLAN to discuss your situation. Posted by Norma Yau, Trustee @ 2:10 PM
Posted on Tuesday, June 13, 2006Student Loans and the Bankruptcy and Insolvency ActGoing to post-secondary school can be an expensive investment and sometime does not result in the income producing job that one may have hoped for. The Federal and Provincial governments have student loan programs to assist students while attending school. The loans do not require payments until sometime after schooling ends and then payments are required or interest relief is requested. For some individuals, the amount of student loans and other debts become unmanageable and alternative options, like a consumer proposal or personal bankruptcy, are filed.There are special rules for student loans in bankruptcy. Section 178(1)(g) of The Bankruptcy and Insolvency Act (BIA) sets out that student loans through the government cannot be discharged unless 10 years have passed from the time they ceased to be a student and the time they file personal bankruptcy. What that means is that the a student loans less than 10 years old will survive and be payable after the consumer proposal or personal bankruptcy is completed. The student loans cannot force collections while someone is in a consumer proposalor personal bankruptcy though. In 2005, there were a couple of interesting cases around student loans: 1. In the Chenier v. Canada (Attorney General) it was found that the BIA provisions for student loans are not in violation of the Charter of Rights; and 2. In the Pyke case it was held that a student ceases to be a full-time student on the last day of the month of Canada Student Loan Act eligibility, not the graduation date. For individuals that have filed bankruptcy prior to the student loans being 10 years old and 10 years now have passed, there is a provision to request the courts to discharge the loans - this falls under section 178(1.1) of the BIA. The case law around this varies, so we suggest you call us to discuss or seek legal counsel. As Hoyes, Michalos & Associates Inc. we operate in various cities, and are continuously working with individuals to find a plan that works for them. To discuss your situation and options in detail, please contact us or call us at 310-PLAN. Posted by Scott Schaefer, CA @ 3:14 PM
Posted on Monday, June 05, 2006What can I do after a consumer proposal has been rejected?I recently met with a debtor who filed a consumer proposal and the creditors rejected it. He had two questions - why was it rejected and what can I do now?Why was my consumer proposal rejected by the creditors? Many companies have certain conditions that they need to have met before they will consider accepting a consumer proposal. For example, Bank A might not accept anything that will give them a dividend (rate of return) of less than 30%. Other companies have a corporate policy of just rejecting everything regardless of the rate of return of the proposal. This debtor unfortunately had a large dollar amount creditor vote it down who refuses all consumer proposals presented to them. However, the debtor felt that they should at least try to offer the consumer proposal. It might not seem logical sometimes when the creditors reject a consumer proposal, but it is their right under the Bankruptcy and Insolvency Act. What can I do now? For some people, since they can't work out a payment plan, they file for personal bankruptcy. In the situation mentioned above, the creditor rejected a consumer proposal that would have given them about 35% of their money back over the course of the proposal. Now that the debtor has filed for personal bankruptcy, the creditor will get a lot less back, perhaps as low as 5%. If you would like to discuss the consumer proposal process, contact us today for a no-charge initial consultation. Posted by Rebecca Martyn, CGA, CIRP, Trustee @ 3:51 PM
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