Sandra Sykora, Trustee : Recent Articles

The other day our Hoyes Michalos head office lost power.   It appears that some contractors were doing some work outside our building, and they cut the hydro lines that feed our head office in Kitchener, leaving us in the dark.   We are able to offer fast, efficient service to everyone with financial problems because all of our offices across Ontario are connected to our central database in Kitchener. Of course the power outage in Kitchener terminated my our access to head office, and affected all of our offices including my bankruptcy and consumer proposal office here at Yonge and Bloor in Toronto.

Sandra Sykora, Bankruptcy Trustee

First my apologies for any of you trying to reach our offices and not being able to get through. Nothing is more frustrating then getting a busy signal when you need to reach someone. We did get things up and running, at least on a temporary basis later in the day and we were fully functional by Friday morning. Of course there was the catch up that needed to be done.

Second and probably most important, I realized how in the dark I was here in Toronto. Being the proactive type I found it hard not to know what was going on and when and how it would be fixed.  It made me feel very anxious and alone. And it became clear to me that maybe that is how many of you are feeling regarding your debts and money problems.

Most people I meet do not discuss finances with family or friends; you probably feel embarrassed, and keep the issues to yourself. I was only powerless for a couple of hours and found it hard, and cannot imagine feeling like that for a long period of time.

Just knowing your options can empower you (no pun intended) and provide you with at least a plan on how to deal with the various issues and what will happen next. Sometimes it is the not knowing that is the most difficult.

For many of you the starting point is making a list of your debts and then doing up a budget. Your budget let’s you know how much money you have available to deal with your debts.

For some the solution may be personal bankruptcy, but if you seek help earlier on it may be possible to deal with your debts through a consumer proposal. Or it can mean being able to choose between the two options and deciding how you want to deal with your debts instead of your creditors dictating the process.

At Hoyes Michalos & Associates, we would be glad to meet with you to discuss your options and come up with a plan that will work for you and your family. It is really that simple. There is no point wandering around in the dark.  Give us a call today at 310-PLAN (that’s 310-7526, no area code required) or e-mail us to ask a question or to arrange a no-charge initial consultation, and let’s get started.

When 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.

When you see a trustee for the first time, many people come in thinking that the only option available is bankruptcy.

Depending on your financial situation, that is, who you owe money too and how much, what you own and what your household budget is like, there maybe other options available to you to deal with your debts, like a proposal.

You will also want to know about each of the options and how they will affect the debts you have and also the things you own or assets

Are all debts included and will all the debts go away?

A garnishment for instance stops in a bankruptcy or proposal situation.

There are also debts that although included do not go away or get discharged. An example would be student loans that are less then 10 years old. Pease see the Student Loans in Bankruptcy section of our website for more information on this subject.

On the other side are the things you own. You will want to know how each option affects the things you own for example a house where you have equity or a car. What happens to this equity and how can I keep it in each of the options?

You may also want to know if all assets are included. Can they take everything I own? Some assets, depending on what province you live in, are exempt from seizure up to certain values. In Ontario, a car worth less then $5,630 will be exempt from seizure.

Many people want to know how each option affects their credit rating or credit report and how do they rebuild their credit. Because after all you want a fresh start

Often people ask me at a first meeting or consult, when we discuss their options, if they need to include all the people they owe money to, including family and friends and also if they can keep a credit card.

The answer is a simple one. You need to include all debts in a proposal or a bankruptcy. Both are formal proceedings that allow you to get a fresh start from all debt so you will want to include all the people you owe money to in order to get that fresh start. There is little point “cherry picking” and being potential stuck with a debt after you have completed the bankruptcy or proposal. Including debts to friends and/or family is difficult, however, it could potentially be more difficult down the road if you have excluded them and there is a falling out between the parties. You do not want to be responsible for the debt after you have completed your bankruptcy or proposal because you deliberately excluded someone.

As for keeping a credit card, I get asked this question most often if people have points they have accumulated on the card and they owe no money on the card at the time of the bankruptcy or proposal. Credit cards, the actual card itself, is the property of the credit card company that issued it to you and it needs to be returned to that credit card company when you file for bankruptcy or a proposal. So unfortunately, even with points and no balance, the card needs to be returned.

For most people, financial problems start gradually, and get progressively worse, until you deal with them. Here are some warning signs that indicate you may be having financial problems:

Carrying a balance your credit cards is a sign of potential financial problems. Are your cards at or near their limit? Are only making minimum payments each month, such that you seem to never be getting ahead of the debt? Do you use one card to pay another? This vicious debt cycle is an obvious sign of financial trouble.

Another sign of financial problems are collection agent calls. Are collection agencies calling you regarding your debts and threatening to garnish your wages if they do not get payment? They seem to call at all times of the day and night. They even try to call family and friends. You can’t enjoy a night at home because the calls never stop. Are they also calling you at work? This can mean a discussion with the boss about the number of personal calls you are getting. Now your debts are affecting not only your personal life but work and it seems like everyone knows.

Are you no longer using your bank account to deposit your paycheques because you are afraid the funds will be seized by a creditor to pay your debts? In many cases this results in you using cash advance places and they are taking a portion of the cheque, leaving less income to pay your rent, food and other living expenses, and then you don’t have the money to pay your debts.

If one of these signs reminds you of your financial situation, you have options regarding your debts. It won’t get better. You need a plan. The stress is affecting you and your family. Contact us today, and let’s get started on a plan to deal with your debts.