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.

Choosing to file for personal bankruptcy was very difficult for her. She had been pretty down on herself for months prior to coming to see us. Now that she has filed bankruptcy, she has begun to understand the benefits of getting a fresh start. While no-one wants to file bankruptcy, it can be the fresh start that allows you to finally deal with your debt problems. Not everyone sends us letters like this.. but pretty much everyone has experiances like this.

Hi Sandra,When I had to declare bankruptcy this past June, it was a painful, embarrassing decision that left me feeling very guilty. I felt like a failure and angry with myself for getting myself into the situation I ended up in.

Over the last couple of months, I still have residual guilt. I am not sure that will ever go away as it has had a great impact on who I am as a person, and I am reminded of my decision every single day.

My first counselling session was extremely eye-opening. I followed the counsellor’s advice and documented every cent I spent, and the mere act of being consciously aware of what I was spending started me on the road of discovery, not to mention my recovery. The “why” of my spending habits was brought to the fore-front and it has taught me to be a lot more self-aware.
I further took her money saving advice and opened a savings account, and looked into ways to reduce the amount of money I pay for phone service by packaging everything for a lower monthly price.

When I saw the counsellor the second time, I was feeling a lot better about myself and my circumstances. Although I had to make a life-altering decision, it has taught me a lot about myself. I am so much more aware and that to me is more than half the battle. Thank you for allowing me to fix my rather large accumulation of mistakes.Sincerely,

If you are having financial troubles, give us a call at 310-PLAN, or e-mail us your question, and let’s get started.

This is a story about Mrs. B. She is in her 50′s, divorced and has no dependants. Mrs. B’s financial difficulties started 18 years ago. She separated from her husband, who subsequently went bankrupt and saddled her with their joint debts. She raised her infant son, worked two jobs and managed to purchase the condo she owns jointly with her sister, which they both live in.

During all these years, she made payments towards her old debts, but never paid them off in full. She never had enough extra money to make a big dent in the outstanding bills.

Over the past few years, the number of hours given to her at work had decreased. She was still working her two jobs, but with fewer hours. This is when the financial pressure started to increase. She found that she had to start using one source of credit to pay another. Her liabilities had now grown to just over $70,000. The balancing act continued until she ran out of credit to meet her payments. That is when she called me.

We sat down and looked at her financial situation. She had a few small assets: a 10 year old car and an extremely modest RRSP. But what she did own was a 50% interest in her condo with her sister, which was practically debt free. This was the key that would unlock her financial mess.

If Mrs. B and her sister were to sell the condo, after paying real estate commissions, legal fees, a penalty to break the mortgage, and paying off the mortgage, Mrs. B’s share of the proceeds would be about $40,000, which is obviously not enough to repay her $70,000 in debts.

Fortunately, there is a way to use the equity in her condo to offer her creditors a proposal; a deal to pay them something, not everything, but more than what they would receive in a bankruptcy, and Mrs. B did not want to have to file for bankruptcy after coming this far in her life.

At Hoyes Michalos we have a network of professionals we can call on to help solve financial problems, so I put Mrs. B in touch with a mortgage broker who was able to find a lender willing to provide enough financing to pay her creditors the equity in the condo.

Here’s what we did: her share of equity in the condo was $40,000, so the mortgage broker arranged a $40,000 mortgage. Mrs. B then offered her creditors a $40,000 consumer proposal.

The creditors were better off because they received this equity without a fight, with little delay and without the additional costs that would have been incurred if Mrs. B were forced to sell the condo. Mrs. B was better off because the monthly mortgage payments were far less than what she was paying in monthly minimum payments, and she was able to keep her condo, the roof over her head.

I asked Mrs. B why she hadn’t tried to get help sooner. She said that she never thought things were that bad that she couldn’t manage them. She now wishes she had sought help years earlier; the stress on her was great, but she managed to live with it year after year. Now the stress is gone.

Would you like me and the team of professionals at Hoyes Michalos to put our experience to work for you? Mrs. B learned that the sooner you ask for help, the sooner we can work out a solution, so if you have more debt than you can handle, please give our office a call today at 310-PLAN (that’s 310-7526; no area code required anywhere in Ontario, and your call will be routed to our nearest office), or fill out our no-obligation bankruptcy evaluation form, or e-mail us today, and let’s get started.

Joe had a good job, but he had a huge amount of debt. Joe told me that things had been going well for many years, but then his marriage ended. His wife had always taken care of the finances, so when she left, Joe had no idea where the money went.

Joe’s son was living with him, and with two mouths to feed, and without his wife’s income to help, Joe began to rely on credit cards to pay his day to day living expenses. He fell deeper and deeper into debt.

When he came to see me, he was afraid that he had fallen so far behind that his creditors would take him to court and garnishee his wages. He didn’t know what to do.

He felt completely hopeless.

I started by telling him that I understood the pain he was feeling. I have met with hundreds of people over the years who work hard, but for some reason have nothing to show for it at the end of the week. They live from paycheque to paycheque.

I also told Joe that my job is not just to be a shoulder to cry on. My job is to give practical advice on ways to get out of debt.

I pulled out a blank piece of paper and asked Joe to tell me everything he spends money on each month. He listed his rent, grocerices, car insurance, gas for the car, telephone bill, and hydro bill each month. He also showed me some recent pay stubs so we could figure out how much he makes each month.

What did we find? Based on what Joe was making, and what he told me he was spending, he should have had about $500 left over each month. But he didn’t.

So I dug deeper.

I asked him to describe his typical day. He told me that he got up early each morning to drive to his job in Toronto. On the way to work he stopped at the coffee shop for a cofee and a muffin.

“Stop right there”, I said. You didn’t mention the coffee shop earlier.

It turned out that Joe stopped for a coffee and muffin on his way into work, and also went to the coffee shop at this morning coffee break, at lunch, at his afternoon break, and on his way home (he had a long drive each day). He was spending about $3 on the way to work, $4 for his morning coffee break and snack break, $8 for lunch, $3 in the afternoon, and $2 on his way home.

That’s $20 per day, five days a week, or over $400 per month at the coffee shop!

Joe didn’t realize what he was spending at the coffee shop. Once he realized what he was spending, it was easy to make a plan to save money. Joe already had a coffee maker at home, and a big thermos. That night he went to the grocery store and bought a loaf of bread and some cold cuts, and he went home and filled up the coffee maker. When he got up the next morning he pushed the button on the coffee maker, and by the time he left for work he had a fresh pot of coffee, which he used to fill up his thermos. He made himself two sandwhiches and brought them with him to work. With a full thermos and a full lunch bag, he didn’t need to stop at the coffee shop.

One week later I saw Joe again. He wasn’t looking depressed. He was actually looking happy. He told me something amazing:

He had change in his pocket! Loonies, Twonies, a whole bunch of change!

Amazingly enough, by simply making his own coffee and lunch, Joe had managed to save a lot of money.

Now I don’t recommend that we all boycott the local coffee shop. We all like a fresh cup of coffee; it’s what makes us Canadian. But by actually writing down what he was spending, Joe was able to make decisions about where to cut back.

Making his own coffee and lunch allowed Joe to free up some cash, but his debts were too large. He was not able to dig his way out of debt on his own. However, with the “extra” cash he had each month, Joe was able to do a consumer proposal. We offered his creditors a plan where he paid $400 per month (the money he saved by making his own coffee and lunch) over a four year period.

They accepted the deal, and now Joe has one monthly payment, and no worries about supporting his son.

Joe is a success story, because, with our help, he was able to take control of his financial life.

Would you like to be a success story? Give our office a call today at 310-PLAN (no area code required anywhere in Toronto), send us an e-mail, or fill out our free bankruptcy evaluation form, and let’s start.

I explained that since she has no assets and only has pension income, she is basically “creditor proof”, meaning if she does not pay her credit cards they cannot seize her assets (she doesn’t have any) or garnishee her wages (she doesn’t receive wages). She could simply open a new bank account at a new bank where she doesn’t owe any money, and stop paying the credit cards.

After much thought and discussion, she said she understood what I was saying, but said she wanted to deal with her debts, even if her creditors couldn’t garnishee her, and even if she had to make a contribution each month towards the cost of her bankruptcy.

She wanted closure.

I was reminded of this last night, at about four o’clock in the morning, when my young son woke me up. Apparently there was a fly or bug or something flying around his room, and he couldn’t sleep. (It’s interesting that when the problem is a bug that needs to be killed my son wakes me up, but when one of my boys has a bad dream and they need comforting, they wake Mom up).

I went up to his room, and we searched for the bug.

I couldn’t find it.

So my son wouldn’t go to sleep.

Finally, as I left his room I saw something move, so I smacked the wall with the fly swatter. I’m not sure if I hit the bug or not, but my son was satisfied. In his mind, the problem was solved.

He had closure, and he was fast asleep in about one minute.

When dealing with problems, we want closure. We want a plan. That’s what we do here at Hoyes, Michalos & Associates. We review your situation, and explain your options. You might need a debt consolidation loan, or a debt management plan through a non-profit credit counsellor, or a consumer proposal, or you may need to file personal bankruptcy. Either way, you understand your options, you pick the one that best deals with your debt problems, and you get closure.

If you want closure, give us a call today at 310-PLAN (that’s 310-7526; no area code required anywhere in Ontario), or complete our confidential bankruptcy evaluation form, or send us an e-mail with your questions, and let’s get started.

He explained that when we first met, he felt like he had a big elephant on his back. His marriage had ended and he had lost his job, and he was drowning in debt. He had found another job and he was back working again, but he still had more debt than he could handle. Every month he sent as much money as he could to all of his creditors, but it was never enough. They kept asking for more, and with his living expenses and child support payments, he couldn’t keep up.

He felt like his debt was an elephant on his back.

When I first met with him I told him the first step was to figure out where he was spending his money. I helped him make a budget. By writing down his expenses he was able to find areas where he could cut back and save money. By getting his expenses under control he was able to manage his regular monthly expenses, like rent and food. My job was then to help him deal with his debts.

I explained various options to him, and after discussing them he decided that a consumer proposal would best help him deal with his debts. I worked with him to decide what he could afford, we filed the proposal, and it was accepted by his creditors. He now makes one manageable monthly payment, and all of his debts are under control.

The elephant is off his back.

We were able to help him, and we can help you, so if your debts make you feel like you have an elephant on your back, give us a call us at 310-PLAN (that’s 310-7526, no area code required, anywhere in Ontario), or complete our one minute on-line evaluation and one of our professionals will contact you to set up a no-charge initial consultation to help you get the debt elephant off your back.