Archive for the ‘PLAN’ Category

We all know the problem with debt consultants.  Some of them will charge you a big up front fee, and then do nothing.  They tell you they will contact your creditors to work out a plan, but they don’t.  I had a meeting today with a representative for a large bank and he told me quite simply that “we don’t make deals with debt consultants.”  Sadly, people still use them, which is why here at Hoyes Michalos we’ve heard many debt consultant horror stories.

So why are unlicensed, for profit debt consultants allowed to run radio and television ads promising to reduce your debt, when more than 99 times out of a hundred they can’t?  Why doesn’t the government stop them?

Great question.  I was asked that question recently, and here’s my answer:

In summary: I don’t know why the government doesn’t do anything.  If there is anyone from the government reading this and they can give me an answer, please do.  Call me at 310-PLAN and let me know.

For everyone else, do your research.  Read our real life debt consultant stories.  Before you part with your hard earned money, be sure you meet with your debt consultant in person.  Don’t just talk to them over the phone; meet with them face to face so you can get a full explanation of all of your options.

If they don’t explain all of your debt management options, you are not getting good advice.  It’s as simple as that.

Credit Education Week 2011  launches on November 14 and runs through to November 18.

“So what?” you might ask; why do Trustees in Bankruptcy care about Credit Education Week anyway? Well, we are so glad you asked.

Credit Education Week is a week of financial literacy events.  Speakers include CBC host George Stroumboulopoulos, and financial writer Alison Griffiths.

One of the interesting features this year will be an essay contest, to run until October 21, and open to both school students and adults.

Grade 12 students will write a short essay about “What is the dumbest thing I have ever done with my money and what did I learn from it?”, and first prize is $5,000!

For adults, the subject is: “The real empowering freedom you get after making it through a wicked desert storm – that’s what I got when I conquered my financial challenges.”  The best entry also gets a $5,000 prize.

Full details can be found on the Credit Education Week Essay Contest webpage.

Hoyes Michalos is not a sponsor of Credit Education Week; in fact, we are not involved with it in any way.  So why are we publicizing it here?

Because we believe that credit education is very important, and we are pleased to support credit education.

As bankruptcy trustees we want you to gain control over your financial life.  In fact, the law requires every Trustee in Bankruptcy to educate you about all of the options that exist for you to deal with your financial challenges – imagine that… there is an actual law that makes it impossible for a Trustee to tell you what to do. By law, we have to explain ALL of your options to you, so that you can make the decision that is best for you and your family. Like Credit Canada and all of the other participants at Credit Education Week, a Trustee in Bankruptcy can help you to understand how you can manage your debt, improve your credit and enjoy more peace of mind.

We share the same vision as the founders and participants of Credit Education Week; simply put, Hoyes Michalos and Associates wants to help you to “start enjoying life again”.

So, dare to imagine that there really IS help available – have a look at the Credit Education Week website – there are lots and lots of things you can learn just by visiting the site, and even more to learn if you attend one or more of their events.

PEACE OF MIND and a PLAN to START ENJOYING LIFE AGAIN may be just one simple click away.

Jane Merling

I spoke with a gentleman recently who is struggling with an overload of debt. He and his spouse are living on a limited income from pensions and do not own property, so creditors would not be able to take collection action such as a wage garnishee or liens against assets. However, that doesn’t stop interest from accumulating on the debts or telephone calls from collectors, which can be very stressful.

The stress doesn’t stop there, as he is in rapidly failing health and is very concerned about his spouse having to deal with all this when he is no longer able to.

What should he do?

He needs relief from the stress. He needs to quiet his mind about what will happen to his spouse when he is no longer with her. He needs to channel his strength into coping with a terminal illness and making his remaining time peaceful and meaningful for his family.

She needs to concentrate on supporting her spouse as he navigates his way through some very difficult treatments for his failing health. She needs to keep her strength up and her mind clear to deal with issues that were primarily his role in their relationship. And she needs to have freedom from other stresses to cope with the inevitable grieving process.

We shared a calm and direct chat about the bankruptcy process and I answered his many intelligent questions throughout.

What I found really interesting about this dignified gentleman was that he kept thanking me for taking the time to discuss his many concerns. He was grateful to be able to speak directly to a live person and not have to go through a lot of automation and useless prompts.

I assured him that all of the highly trained professionals at Hoyes Michalos & Associates do this with every inquiry we receive.

Not all situations are as dramatic as this one, but dealing with debt can certainly be awkward and difficult. It took this gentleman a long time to “get up the nerve” (his words) to call us.

If you want to get started on a plan to deal with your debts or have questions about the process, contact us.  We’re here to help.  I know this gentleman feels better knowing his options, and so will you.

Several surveys conducted by organizations around the world have found respondents still feeling the effects of the recession. In one survey, when asked about their spending plans, 51% of respondents stated that they would be spending less on Christmas this year. More than half of respondents said that the recession has given them cause to rethink how they would give gifts this year.

So, does cutting back mean you can’t enjoy Christmas this year? Absolutely not, but we really do need to be thoughtful and intentional in our approach to the festive season. And, we may have to rethink what enjoying Christmas is really all about. Even though retailers would have us think otherwise, Christmas really isn’t just about the gifts. Here are some tips and suggestions:

What we can do:

1. Look at your budget and try to be honest about how much money you really have to spend this Christmas. Ideally, the money we have to spend is the cash that we have saved specifically for this purpose.
2. Explain to your young believers, that Santa wants to make sure that all of the children in the world get the 1 gift they really want this year, and ask them to choose what their special gift will be. Beyond that 1 special (and usually more expensive) gift, head to the dollar store and pick up some extras – dollar store finds are perfect for stocking stuffers, and the best part – you can buy a lot of stuff for very little money.
3. See if family members might agree to not buy for the adults this year. I saw a client this week who shared with me that this year, everyone in his family over the age of 16 will be buying a $20 gift certificate – all of the gift certficates will be put into a pot, and each person gets to draw their gift. What a great idea!
4. Consider a pot-luck Christmas dinner – share the costs and the work. My family and I have adopted this tradition, and it is always an overeating success – we all make each other’s favourite dishes and we have a fabulous feast.

What we should not do:

Let’s face it, most of us would like to have more money than we have. Christmas is one of those times when we are generally even more aware of this wish – we want to buy our children everything on their wish lists; we want our spouses and sgnificant others to be dazzled and overcome when they open that special gift. Unfortunately, most Canadians are not in the position of being able to do it all. And, this is where Christmas can get tricky and even very risky. Credit cards can make it easy for us to have it all, but the problem is that “Having it all” in December sometimes turns into “Losing it all” in February or March.

That’s not to say that making Christmas purchases on credit is a bad thing. Sometimes it’s not – if you can manage to pay the debt off in no more than a few months, then it may be a reasonable plan, but if you can’t pay it off on a timely basis, or worse yet, you already have substantial debt that is already a burden, adding to the problem is simply not a good idea.

I know that is not easy, and life’s financial burdens can weigh that much heavier at this time of year; the desire to simply worry about things after Christmas can be a powerful motivator to simply use credit to get through the season.

I’m sorry if I sound like the Scrooge in Christmas – I really don’t mean to, but I do want you to try to PLAN for Christmas this year. A PLAN can take many forms: if you have manageable debt now, don’t let impulse make it unmanageable in the future; if you are already struggling with debt, don’t make it worse; and… if the stress of debt is making it difficult for you to even think about enjoying Christmas this year, we may be able to help – for further information, please  call us at 310-PLAN, or try our free debt options calculator to review your options. Let us help you Turn the Worry of Debt into a PLAN for a Less Stressful Financial Future.

Scott Schaefer

We receive hundreds of e-mails every day from people experiencing financial hardship. Several of these e-mails ask similar questions so we have decided to provide answers live on the radio at 12 noon on Saturday November 14, 2009.

Scott Schaefer, the bankruptcy trustee responsible for our Kitchener office, and Howard Hayes from our Cambridge office, are going to answer your questions during the hour long Ask the Experts show on AM 570 News.   570 is Waterloo Region’s All News station.

We have created an e-mail address to allow youto send in their questions.  Send us your questions, and will will answer them  live on the Ask the Experts radio show.

Howard Hayes

If you have a question that you want answered, or you think other people would like to have answered, please e-mail us your question today.

If you can’t wait until Saturday, or you want to discuss your situation off air, call us at 310-PLAN (no area code required) or e-mail us today.

The economy is getting worse. I just met with a car salesman who told me that he is selling fewer cars this year than last. Factory workers are telling me there is no more overtime, and many are now on reduced shifts or layoffs. I even met with a collection agent this week who is in financial trouble because the economy is so bad he can’t even collect on delinquent accounts! What does this mean?

It means you need a plan.

If you have any debt, the worsening economy may mean that your income will be reduced, and it will be harder for you to repay your debt in the future. Ask yourself this question: what will you do if you lose your job tomorrow, or if your hours get cut back? What will you do if the price of gas keeps increasing, and you have less money to make your debt payments?

You need a plan to deal with your debts.

If you still have a job, and if your wages are not yet being garnisheed, you have more options. You may be able to get a second job to increase your income, or you may be able to start cutting expenses to free up cash to pay your debts. You may still qualify for a debt consolidation loan to reduce the interest rate you are paying on your high interest credit card debt. You may be able to file a debt management plan through a not-for-profit credit counsellor who will negotiate a repayment plan with your creditors.

What if the bank won’t give you a debt consolidation loan, or you can’t afford a debt management plan?

Then you should consider a consumer proposal. Give us a call at 310-PLAN and one of our professionals will ask you some simple questions, such as how much money you owe, what you own, and what you take home each month. If you could afford to repay some of your debt, a consumer proposal may be the solution for you. For example, if you have $50,000 in credit card and other debts, we could file a consumer proposal where you pay $400 per month for 50 months, or $20,000 in total. You get an affordable repayment plan, with no interest, and your creditors are happy because at least they get some of their money. Of course the exact amount your creditors will accept will depend on your individual circumstances, but the call to us at 310-PLAN is free, so you have nothing to lose (but your debt) by calling us today.

If you cannot afford a consumer proposal, the final option is personal bankruptcy in Ontario. At Hoyes, Michalos & Associates we consider personal bankruptcy to be a last resort, if all of the other options won’t work for you. However, bankruptcy exists to give you a fresh start, so if that’s what you need, we would be happy to walk you through the process. So what do you need?

You need a plan.

No option is right for everyone, but one of the options discussed above is right for you. You don’t need to suffer through the endless telephone calls and threatening letters. It is possible to get a fresh start, but your fresh start only starts when you make a plan to deal with your debts. Here’s how we can help:

Call us at 310-PLAN. We have professionals available from 8:00 am to 6:00 pm during the week, and from 9:00 am to 1:00 pm on Saturdays. Our 310-PLAN phone number works throughout Ontario, and you don’t even need to dial the area code. Or, take three minutes and complete our free on-line bankruptcy evaluation form. One of our professionals will review your information and e-mail or call you back with a plan for your unique circumstances. Or, just send us an e-mail and we will call or e-mail you back with the answer to your questions, and if you want, we’ll arrange for a no-charge initial consultation at one of our 22 fresh start offices in Ontario.

There is help available, but you need to make a plan to get started.

If you have a lot of debt and creditors are calling, you have two choices: deal with them, or ignore them. Ignoring them may work for a while, but eventually it is in your best interests to make a plan to deal with them.

I had two interesting experiences this week that illustrate the different approaches possible when dealing with people, and how making a plan to deal with them is usually the best option.

My first experience was a meeting I had with a debtor and a creditor. Not surprisingly, the creditor was upset because he was owed money. The debtor, due to a failed business and job loss, did not have the money to pay. The creditor thought the debtor had money, so he took him to court and sued him, in an attempt to garnishee his wages. Our meeting was the first time they talked face to face. By the end of the meeting it became apparent that what the creditor wanted most, other than his money, was an explanation of how the problems started. Had the two parties sat down and discussed the problem, the situation would probably have never gone to court, and a suitable resolution might have been possible.

Unfortunately, once a wage garnishment starts, personal bankruptcy is often the result.

My second experience happened yesterday, when I had the pleasure of attending a fundraising luncheon for the Catholic Family Counselling Centre, the only non-profit credit counseling agency operating in Kitchener, Cambridge, and surrounding areas. Also in attendance were financial professionals from other credit counseling agencies, including the Family Counselling Centre of Brant.

The guest speaker was Bill Clinton, the former U.S. president, and he told an interesting story about his dealings with Yassar Arafat and Ariel Sharon in the year 2000, trying to bring peace to the Middle East. He told the story of Ariel Sharon’s proposed visit to a site considered sacred by Arafat’s people. Mr. Sharon made the visit not to upset Mr. Arafat, but rather as a show of strength to members of his own political party, who viewed him as weak.

President Clinton advised Mr. Arafat not to over-react, but instead to meet with Mr. Sharon face to face, peacefully, to work out their differences. For political reasons Mr. Arafat refused to do so, and as a result we sit here today, six years and one Middle East war later, still waiting for peace in the Middle East.

My point is this: we all need a plan, whether it’s to deal with our creditors, or to try to bring peace to the Middle East, and all plans start with dialogue. Without dialogue and a plan, no solutions will be found.

I have no idea how to bring peace to the Middle East, but I do know how to give you peace when dealing with your creditors: start by talking to them. Tell them your situation; tell them how much you can afford to pay them each month, and see if you can work out payment terms with them.

If you can’t reach an agreement with them, get help in your negotiations with a credit counselor in Ontario, or give us a call to talk about helping you negotiate a legal settlement (called a consumer proposal) to deal with your debts.

It is possible to work out a plan to deal with your debts, but it all starts with you. You need to make that first call. We want to help you make a plan, which is why our phone number is 310-PLAN (no area code required), so call us or e-mail us today, and let’s get started.

Filed under credit counselling, consumer proposal, personal bankruptcy, Bill Clinton