Hoyes Michalos and Associates Ontario Personal Bankruptcy Blog

Over the past month I have received a number of calls from reporters asking for my thoughts on the economic crisis.  I’m always eager to share practical advice on how to deal with debt.  On November 8 I appeared on ProvinceWide on CTV Southwestern Ontario on a show called Your Money, Your Future (you can watch a clip by clicking on this ProvinceWide link).  I advised everyone to reduce their debt, and make a plan to stay out of debt in the future.

This morning I also appeared on Canada AM in a report by Pat Foran, who did a great story on How to Survive the Crumbling Economy.  You can watch the report here on the Canada AM web site.  I gave the same advice: reduce your debt, and have a “Plan B” in case your situation gets worse.

You can read more in our article on Surviving the Economic Crisis.  Mr. Foran led off his report by noting that consumer bankruptcies are way up, and he’s right.  In Ontario, personal bankruptcy and consumer proposal filings in Canada are up 8% over the last year,  18% over the last three months, and were up 32% in September 2008 as compared to September 2007.  Clearly the economy is in bad shape.

I agree to appear on television not to spread doom and gloom, but instead to spread the word that there is help available.  If you have more debts than you can handle, take action now.  Give my office a call at 310-PLAN (no area code required anywhere in Ontario) or e-mail us and we will explain your options for dealing with debt.  There is help available, but only if you take the first step and contact us today.

It seems that every time we open a newspaper or turn on the news we hear more stories about banks failing, bailouts, higher unemployment, and other economic bad news. All of this bad news is starting to take it’s toll on our outlook on our economic future. I have met with many people over the last few weeks who have told me they are very worried about the future, and they don’t know what to do.

My advice to everyone is the same: The most important action you can take now to protect your personal finances is to reduce your debt. In a recession, debt is a killer.

If you earn $2,000 per month, and your rent, food and other monthly living expenses are $1,800, you are in good shape. But, if you have $500 per month in debt payments, you’ve got a problem. That’s why getting out of debt is so important; it gives you the flexibility to survive the recession.

For more information, please read our article Five Tips to Survive the Economic Crisis, and then give us a call at 310-PLAN if you have any questions.

As people get older, their lives can become both more fulfilling and more challenging. Retirement brings the freedom of not having a set schedule but can also lead to a number of difficulties, including financial ones.

Working at the Hoyes, Michalos & Associates offices in Kitchener and Barrie, I am hearing from more and more people who are concerned about their aging parents getting into serious financial debt.

The trouble is this: Many seniors are living on a pension income that barely covers their living costs such as rent and food. Often, those who are aging are in need of many medications and it seems the government has cut-back on what is available free or at a reduced cost. This leads to a situation where seniors are unable to cover their monthly living expenses as well as the cost of their prescriptions and are forced to use credit cards in order to get by.

In addition, taxes are not always deducted from CPP and old age pension cheques, so often Canada Revenue Agency (CRA) comes to the person at the end of the year asking for these taxes. They will then use their credit card to pay the CRA for these taxes as well. If the pension was taxed at the source, this would not happen however, it would mean a less income each month to put toward other things because taxes would be taken off each month. It is easy to see how senior citizens are at an increased risk of creating huge credit card debt that they will be unable to pay back. Making the problem worse is that many older people believe it is unacceptable to speak about their finances and are very embarrassed that with all of their life experience and after having raised their own family, they have now found themselves in financial trouble.

If you are concerned about your parents’ finances, or you are a senior who needs help getting out of financial trouble, please know that at Hoyes, Michalos & Associates we understand how easy it is for even the most experienced and hard-working individuals to find themselves in debt. We are committed to helping you get out of financial trouble in a way that works for you.

When you contact us, we will walk you through all of the options that will be available to you or your parents so you can make them feel more prepared and comfortable if they would like to come and see us. If you would like to speak to someone now, call 310-PLAN (no area code required) or send us an e-mail and we will be happy to discuss your situation and options with you, and set-up an initial consultation free-of-charge at one of our bankruptcy offices in Ontario.

Ted Michalos and I were guests on two live call-in radio shows on Saturday morning. We started the day appearing on The Experts Show on AM 640 in Toronto at 10:00 am, and then at noon we were guests on Ask The Experts on 570 News in Kitchener.

The theme of both shows was debt, and our goal was to give listeners some strategies for dealing with debt.

One of the callers said that he owed $65,000 to Revenue Canada. His problems started while he was out of work while he recovered from heart surgery. He was not able to pay his taxes, and now he owes taxes, penalties, and interest. Many people we help have had health problems that lead to financial problems. We have also helped many people deal with tax debts.

We told the caller that if he cannot afford to continue paying Revenue Canada in full, one option would be to get a debt consolidation loan. Unfortunately with his high level of tax debt, that may not be possible.

A consumer proposal is another option, and is best suited to someone with sufficient income each month to create a repayment plan. Without sufficient income, the final option is personal bankruptcy.

During both shows we emphasized that even though you may feel “stressed out” and overwhelmed by debt, there are solutions. You are not alone. Our professionals are here to help you make a plan to deal with your debts, so call us at 310-PLAN, 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 make a plan to deal with your debts.