What happens at my first meeting with Hoyes Michalos?

What happens at my first meeting with Hoyes Michalos?

Many people I meet with for the first time make the same comment: “I was afraid to make the first call, and I’m really nervous about this meeting.”  I don’t think people are afraid of me; I’m a nice guy.  People are afraid of the unknown.  If you have never had debt problems before, meeting with a bankruptcy firm can be intimidating.

So what happens at that first meeting?  Will we scold you, and tell you not to spend so much?

No, we are not here to judge you.  We are here to do a debt assessment and explain your options.  

A debt assessment starts by asking you three questions:

  1. Who do you owe money to?
  2. What assets do you own?
  3. How much do you earn and what do you spend every month?

With this information we can look at some debt relief options and help you develop a plan to become debt free.

That plan may not even involve filing bankruptcy. In some cases a consumer proposal may be a better than a bankruptcy and in other cases you may not have to file with us at all. That’s OK, we’ll still give you a plan about what to do next.

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Read Transcript

Interviewer: Where we left off, you were talking about ‘give us 30 and we’ll have a solution for you’ and you pinpointed the fact that you’re saying you’ll sit down with a client for 30 minutes, and by that point you can what, assess the amount of debt, or already have a plan formulated?

Doug: We can already have a plan, and you know, we’re happy to sit down with you for an hour, there’s no time limit on this, but a lot of people say you know I don’t want to be going to some 3-day course here. No problem. So, you’re gonna sit down with us and we’re gonna say, tell me who you owe money too. I don’t need exact numbers right to the dollar, but you know who’s yelling and screaming at you, tell me who that is. Tell me what you own. Do you own a house, do you own a car, do you have an RRSP? What do you have? And then tell me what comes in every month and what goes out every month. So, bring your last pay stub, we’ll do some quick math. You probably already know what your rents, your mortgage and so on is. Once we’ve got that information we can say, ok, let’s look at some options. So, before the break we talked about maybe what you need to do is cut some expenses, your debts aren’t that great, you can chip away at them on your own, perfect. Your credit report will look great, you’re out of debt, it’s all good. Maybe you qualify for a debt consolidation loan. You go to the bank, you get a line of credit secured against your house or you borrow some money at 6 or 7%, instead of the 20% you’re paying on your credit card, pay off the debts, more of your payments are going to principle, you get out of debt quicker. Fantastic. Maybe what you need is a debt management plan, so we’ll put you in touch with someone like Mosaic Family Counselling, they contact everybody you owe money too, and work out a plan where you pay the debts in full, but they can usually get you a break on the interest you’re paying. And if that’s all you need, great solution. Now, if you can’t afford to pay all the debts in full, if you don’t qualify for a consolidation loan, if you can’t cut your expenses enough to get out of the soup, then we’ll talk about a consumer proposal or a bankruptcy. The trick in a bankruptcy is you lose some stuff, like if you have a house with equity in it for example and the more money you make the more you got to pay. So unfortunately, with the way the rules work in Canada, bankruptcy isn’t free. You’re allowed to make a certain amount if you make more than that you’re paying a penalty each month.

Interviewer: So, it’s not a get out of jail free card so to speak?

Doug: Correct, it isn’t so we of course will walk you through all the math, show you how much a bankruptcy cost. So, you know, if you’re a single guy for example, I’ll give you a real simple example, a single guy’s allowed to make around $2000 a month. I’m not going to use exact number because I don’t want to bore people with math –

Interviewer: Allowed to make that and qualify for declaring bankruptcy?

Doug: Well, if you make more than the $2000 a month, and I’m talking take home pay, after taxes and everything. Whatever you make over that limit, you have to pay a penalty of half of the amount you’re over. So, if with all your over time and everything you’re making $3000 a month, you’re $1000 over the limit, the penalty you’d have to pay in the bankruptcy is $500 a month. Because you’re over the limit, instead of the bankruptcy just lasting for the minimum 9 months it’s going to last for an extra year, 21 months. So, you’re going to end up having to pay roughly $500 a month for 21 months.

Doug: So, your bankruptcy could end up costing you 10, 11, $12000 depending on what your income is each month, plus you lose your tax refund, plus you lose any assets that you may have. ‘Ok well wait a minute now, I have $50,000 worth of debts, I can’t afford to be paying 500 bucks every month, that’s why I’m in this mess, I can’t afford to go bankrupt, what do I do?  Well let’s talk about a proposal. So what we could do is go to everybody you owe money to and we say well I know I owe you money, I gotta pay you something back, I can only afford to pay 250 bucks a month, but I will do that for 3 years or 4 years or 5 years, which is more than what I’d have to pay in a bankruptcy, but because I’m stretching it out for a longer period of time, the monthly payment is lower and I can actually afford it. That’s the beauty of a consumer proposal. The credit card companies, everybody you owe money too is happy because they’re getting a little bit more than what they would’ve got in a bankruptcy. But you’re happy because you can actually afford it, I can afford the 250 a month, I can’t afford the 500. And the beauty of the proposal is if things get better, if you do get that fantastic job and are making more money, if you get more overtime, if you get a big tax refund, whatever, you can take that money and pay it off quicker. So, you’ve got way more flexibility with a proposal. So, when you come in to meet with us that’s what we do, we walk you through all those options, explain how they work and then you get to decide which one is going to be right for you. But it’s a good point you raised because when you come in to meet with us, you’re not dealing with a clerk, you’re not dealing with a call centre, you’re dealing face to face. The average person working for me has been with me for 5 years or more. So, these are professionals who know what they’re doing, happy to help.

 

Close Transcript

Our commercials say “Debt Free in 30”, and that’s what we mean: give us 30 minutes to review your situation and explain your options, and then you can decide what options are best for you. 

I mentioned it in the video, and I’ll emphasize the point again: when you meet with us, you will be meeting with a professional, not a “salesman” or a “clerk”.  We have 19 trustees in our firm, so in most cases your first meeting will be with a trustee, but even if you meet with one of our other accredited credit counsellors you will be meeting with an experienced professional and you always meet with a trustee before you file. 

Is it really possible to explain your options in 30 minutes? Yes, it is although if you want us to spend more time with you, that’s fine too.  We’ll take as long as you need and are happy to book a repeat consultation if that’s what’s best for you.  Many people want to go home and review these option with their spouse or family member.  No problem, we never pressure you to make a decision that day if you want to think about it.

Do you need to bring a list of your debts, a recent paystub, or a list of what it costs you to live each month, and details on any assets you own? No although it does help make sure we have a complete picture.  Don’t worry, our team knows what to look for so we can assess your unique situation, and explain all of your options.  If we need more information down the road, that’s something we’ll work together with you to achieve.

So really, it’s a pretty simple process.

That’s why we say Debt Free in 30.  It works, so let’s get started.

Similar Posts:

  1. Debt Free in 30 – It’s That Simple
  2. Is Bankruptcy the Right Thing to Do?
  3. What Do I Need To Disclose To My Bankruptcy Trustee?
  4. Why I Won’t Judge You
  5. Pick the Right Bankruptcy Trustee By Asking These 5 Questions

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