When you’re struggling with debt, you want to talk with someone who will understand and provide you with clear, honest answers about your options.
We Understand Bankruptcy Issues in Toronto
Hoyes Michalos & Associates is a leading personal insolvency firm in Toronto. We have 10 locations across the Greater Toronto Area providing bankruptcy and consumer proposal services.
Our Toronto team of licensed insolvency trustees and credit counsellors understand the unique debt and financial challenges faced by people living and working in Toronto. We see people with debts accumulated due to the high cost of housing and rents in Toronto. We’ve even seen a number of insolvencies driven by renovictions. Many of our clients are self-employed contract and gig workers. Working part-time with no benefits is very difficult in a city as expensive as Toronto. A city the size of Toronto also leads to high commute and transportation costs. If you live in the suburbs like Oshawa, Pickering, Scarborough, Brampton, Vaughan, Markham, or Newmarket for example, and work elsewhere in the city your transit, gas, and commuting costs are a fact of life and consume a significant portion of your paycheque. This needs to be considered in your budget when deciding on any possible debt relief solution.
We believe it is important for someone looking for solutions to debt problems to research all their options including bankruptcy alternatives.
Personal bankruptcy is a legal process, governed by the Bankruptcy & Insolvency Act, that will discharge your debts. By filing bankruptcy you receive immediate protection from creditor actions like harassing phone calls and legal threats and you stop dealing with your creditors.
You do not lose all your assets
If you declare bankruptcy in Toronto you are allowed to keep one motor vehicle with no liens or loans against it worth up to the current exemption limit. If the vehicle is worth more than that amount, you would be required to pay the trustee the amount over that limit.
You are also allowed to keep personal clothing, and exemptions usually cover most household furniture and appliances.
Ontario law also allows you to keep the equity in your home if it is valued at up to $10,000. With the average price of a home in Toronto at close to $1 million, most homeowners have an equity value over this limit. We can help you explore options to keep your home while still dealing with your debt, options like a consumer proposal.
How much does bankruptcy cost?
You are required to make a monthly payment into your bankruptcy. The payment is based on your monthly income, the size of your family, and whether or not you pay child support or eligible medical expenses.
Many people in Toronto earn a higher than normal income. Government rules say you can keep a certain amount of your income to pay for living costs but if you earn above this limit you are required to pay half into your bankruptcy. If your income is high enough to trigger a surplus income payment you will also be bankrupt longer. This can make bankruptcy quite expensive for many in Toronto. You can avoid this penalty by filing a consumer proposal as an alternative.
Are you eligible to file?
To declare bankruptcy you must be insolvent according to the Bankruptcy and Insolvency Act. This means:
- you owe more than $1,000
- what you own is worth less than what you owe, and
- you are unable to pay your debts.
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How long will you be bankrupt?
The minimum personal bankruptcy period for a first time bankrupt is nine months. If you have surplus income, this period is extended to 21 months. Second bankruptcies last a minimum of 24 months and 36 months if you have surplus income.
If you have income significantly higher than the government determined average, it is possible that your bankruptcy will last for more than nine months. Again, we will explain this in more detail and will help you review alternatives like a consumer proposal.
What does bankruptcy do for you?
There are two reasons why you may want to declare bankruptcy: to eliminate debts like credit card debt, payday loans, bank loans, tax debt, and overdue bills and to gain protection from your creditors.
As soon as your bankruptcy is filed with the court, the bankruptcy starts, and more importantly, your creditors (the people you owe money to) are prevented from taking you to court, garnisheeing your wages, or even calling you at home or at work. The legal term for this is “stay”, meaning the creditors must “stay away” from taking legal action against you. This stay comes into effect once we file your bankruptcy paperwork.
What is the role of a bankruptcy trustee or licensed insolvency trustee?
To claim bankruptcy you must see a Toronto Licensed Insolvency Trustee. A trustee like Hoyes Michalos acts as a referee in a hockey game: we don’t work for you or for your creditors. We are there to make sure that everyone involved follows all of the rules. We are an officer of the court.
- We provide help with your bankruptcy options by explaining debt consolidation, credit counselling, consumer proposals, and other bankruptcy alternatives. This advice may help you avoid bankruptcy.
- We give you advice to help you deal with your secured creditors. Even if you owe money on your car or house it is possible to declare bankruptcy and keep your car and your house.
- We explain the bankruptcy process to you in detail. If you have a question to ask, we’re here to ensure you fully understand the process. We know filing bankruptcy is a difficult decision. We won’t ever force you into a decision.
- If you have problems completing your bankruptcy duties, we provide help and advice to help you finish the process.
- Once your bankruptcy is completed, we will provide your discharge certificate and give you advice to help you rebuild your credit after bankruptcy.
How do you file bankruptcy?
You must work with a licensed insolvency trustee. The first step is to book a free consultation with one of our Toronto debt professionals. This does not mean you will have to file bankruptcy. It’s an initial assessment of your situation. At that first meeting, your Toronto debt expert will review your options with you, and answer all of your questions. They will help you decide if bankruptcy truly is the best solution in your situation.
If you decide to declare bankruptcy, you will be required to complete an information form to give the trustee the information necessary to complete all of the required paperwork. Once the bankruptcy paperwork is prepared, your trustee will have you sign the required forms so that you can officially declare bankruptcy. Before you sign any papers, we will explain again the bankruptcy process and make sure that you have received answers to all of your questions. We will go over each page of the bankruptcy application with you, explain it to you, and then ask you to sign it. Once signed, your trustee will submit the forms electronically with the government and you will become bankrupt.
Ready to file? Contact us to talk with a Licensed Insolvency Trustee. We'll explain the process and make sure bankruptcy is the right option for you.Get Started
Bankruptcy Alternatives in Toronto
More than 7 in 10 insolvencies filed in Toronto are consumer proposals. We strongly believe residents of the GTA should consider a consumer proposal as an alternative to bankruptcy.
A consumer proposal is an offer you make to your creditors to pay a portion of your debts. Like bankruptcy, a consumer proposal gives you legal protection from your creditors. It will stop a wage garnishment and stop collection calls. Unlike bankruptcy, you get to keep all of your assets (eg. house, car, investments, etc.) and the payments don’t go up if your income increases.
A consumer proposal is a debt settlement offer made to your creditors to settle your debts. Legally binding, sanctioned by the government and filed through a bankruptcy trustee it is a great way to avoid bankruptcy altogether. In fact in the Toronto area more than 70% of the files all insolvency filings are consumer proposals.
How Do I Get Started
With 9 locations across Ontario, an A+ rating on the Better Business Bureau and an excellent rating from our clients, we will work tirelessly to provide you with the best debt solution for you and your family.
When working with Hoyes Michalos you are guaranteed respect, confidentiality, and expert financial advice. At Hoyes Michalos we believe you should always talk with a professional. For over 20 years we’ve focused solely on helping individuals find debt relief.
To reach us, call us at 1-866-747-0660 or contact any of the trustees in any one of our Greater Toronto Area locations.