Windsor Ontario Personal Bankruptcy Blog

consumer proposals in Windsor, Ontario

2009-05-05T13:46:00.000-04:00

Question: If your consumer proposal is accepted, you pay off credit cards and such, do you keep your cards, or do the card issuers want them cut?

Thanks!

Answer: When you file a consumer proposal you give up all of your credit cards; they are cut up and sent back to the credit card companies. In order for the proposal to be successful it is important that you do not incur any additional debt, which is why you lose your credit cards.

What is debt consolidation?

2008-09-22T14:55:00.000-04:00

When faced with numerous loan payments and credit cards bills each month, the first step for many people is to find out if they can obtain a debt consolidation loan. The debtor (the person who owes the money) will go to his or her bank and apply for the loan. If the debtor qualifies, the bank will then give a loan and pay off the other credit card and loans. Once you receive the loan from your bank, if the bank doesn’t cut up your credit cards, you need to make sure you do it yourself. If you currently don’t have a source of income, it is unlikely you will be able to obtain a loan.

The main advantage of a debt consolidation loan is that it takes all of your debt and combines it into one monthly payment. Your new loan payment should be less than the minimum payments you were paying on your credit cards and loans. If it is not a lower monthly payment, this might not be the best option for you.

Another factor to consider will be the interest rate you will be charged. Most credit cards have interest rates between 10% and as high as 28% per year. The interest rate charged on the loan should be lower than you are paying now.

You will also need to consider any other terms the bank has. Do they want to put a lien on your car, or do they need a cosignor? If they do, you need to consider the risk to your car and the cosignor if you are unable to pay the loan in the future.

If you are able to make a monthly payment, but you don’t qualify for a debt consolidation loan, a consumer proposal might be a better option for you. You can call me at 310-PLAN or email me to discuss this option in more detail.

death and bankruptcy

2007-06-15T23:54:00.001-04:00

Question: What happens if someone is in the middle of their bankruptcy and have not been discharged and they die?? Can they still be discharged?? How do the creditors or trustees get paid??

Answer: The answer depends on how far the bankruptcy has proceeded at the time of death. If the bankrupt has fulfilled all of their duties, the bankruptcy may proceed to a normal discharge. If the bankrupt has not completed their duties, and they cannot be completed by the bankrupt's estate (such as through life insurance proceeds), the bankrupt will not be discharged, which is in most cases not an issue, since after death it is not likely the creditors will be pursuing the bankrupt.

Can I keep my house if I file for bankruptcy?

2007-01-22T15:57:00.001-05:00

As a Windsor trustee, this is a common question.

First question - is there equity in the house. Equity means if you sold you house, after paying the mortgage and costs would there be money left over? If there would be bankruptcy may not be for you. The money that would be left over belongs to the bankruptcy and you would have to pay it to your bankruptcy. If the amount is large enough a consumer proposal might also be something to consider.

If there isn't equity, as long as the mortgagor agrees, the bankruptcy will not take your house.

What happens to the debt after a consumer proposal is completed?

2007-01-08T15:52:00.000-05:00

I had a debtor come in today to make the final payment under the terms of his consumer proposal. He was a very happy person.

He had heard a rumour that now that the proposal is done, he now has to make repayments for the balance of the debt. He didn't think it was so, and just wanted confirmation. I told him that expect for some circumstances (such as student loans that are less than 10 years old), this is not true. A clause in the proposal states that if the creditors accept the consumer proposal it is for final settlement of the debt.

If you have a question, feel free to send me an email.

What causes bankruptcy in Windsor?

2006-12-12T15:51:00.000-05:00

There are a two main reasons for bankruptcy in Windsor. The first is marital separation or divorce. A family unit has 1 or 2 incomes, and 1 set of expenses. After separating, the 2 spouses each of the same income, however now they both have their own set of expenses. In addition, each might have their own debt, plus joint (in both of their names) debt.

Another factor in Windsor is the reduction of overtime and in many cases layoffs. Employees might have had steady overtime hours 2 or 3 years ago, however, now their hours have been cut back to 40 or less. The debt was probably manageable at 60 hours a week, but now at 40 hours a week, there just isn’t enough paycheque to go around. If this sounds like you, then call me at 519-250-8060 or email me so we can discuss the options that are best for you.

How to choose a trustee

2006-12-07T11:55:00.000-05:00

Realizing that you have financial difficulties is overwhelming. Next you need to know where to turn to get advice in Windsor on what your options are to deal with your debt. When you call a trustee consider these questions:

1. Did they take your call right away or within a reasonable amount of time? If they didn't, do you really want to deal with them?
2. What was the telephone manner? Were they polite on the telephone, or did they treat your poorly? If you did not like their telephone manners do not deal with them.
3. Were you able to speak with a trustee or someone in a position to give you answers on the phone?

You have the right to be treated with respect when you call for assistance. You do not have to meet with someone you are not comfortable with.

When you call, you will speak with me or another Trustee, and you will meet with me personally. Call me at 519-250-8060 to discuss options that may help you.

I filed for bankruptcy. Why are the creditors still calling me?

2006-11-22T11:35:00.000-05:00

This is a frequent occurrence after someone files bankruptcy. The short answer usually is that the creditor is calling you because they don’t know about the bankruptcy. Once you sign your bankruptcy paperwork, the trustee mails the documents to your creditors. It takes time for the paperwork to get to the right person working for you creditors. Other times a creditor sent the debt to a collection agent, but the bankruptcy papers were mailed to the original creditor. The best thing to do is to tell the creditor who calls that you filed for bankruptcy and give them the name and phone number of your trustee. If they call again, get the name and phone number of the person calling you and give that information to your trustee for follow-up.

Applying for Credit After Bankruptcy

2006-10-25T11:28:00.000-04:00

After someone files for bankruptcy in Windsor, I am often asked about how he or she can obtain credit again. The first thing to note is that you cannot get any new credit until you are discharged. Once you are discharged, the easiest credit to get is a secured credit card. You can apply for this through various financial institutions. You should also be saving money to use as a down payment for any big purchases such as a car. The lender will probably be more willing to extend credit if you have made a large down payment.

If you have a question, send me an email.

Bankruptcy vs. Consumer Proposal

2006-10-11T16:15:00.000-04:00

As a Windsor based trustee, I am often asked what is better – a bankruptcy or consumer proposal. There are pros and cons of each. Here is an overview:

BANKRUPTCY:
CON:
- you lose your non-exempt assets
- you lose the ability to deal with your own assets while bankrupt, such as selling an exempt asset
- you make a payment based on your income so your monthly payment can change each month
- you get the worst credit rating

PRO:
- bankruptcy can be faster from start to finish than a consumer proposal

CONSUMER PROPOSAL:
PRO:
- you do not lose your assets
- you do not better effect on your credit rating than bankruptcy
- payments are fixed each month, your payments don’t increase if you get an increase in salary
- provides a better credit rating than bankruptcy

CON:
- it can last longer than a bankruptcy. The period can be anymore from a lump sum payment to up to 60 months

If you would like to review your situation and determine which option is better for you, call me at 310-PLAN or email me to book a no charge consultation.

Do I qualify for bankruptcy?

2006-09-25T21:36:00.000-04:00

As a Windsor based trustee, I often get asked if someone qualifies for bankruptcy. The requirements to file for bankruptcy are: debts greater than assets, debts greater than $1,000 and unable to pay the bills on time. However, most people we see owe more money than $1,000. If you think you need to file for bankruptcy, you first step is to call or email me and we will review your situation.

Filing a Second Consumer Proposal

2006-09-11T12:07:00.000-04:00

A few months ago I met with someone in Windsor who wanted to file a second consumer proposal. The first one failed because missed 3 months of payments. Unfortunately, under the Bankruptcy and Insolvency Act he cannot file another consumer proposal until all of the debts from the first one are paid, unless he gets a court order allowing him to do so. He then was able to hire a lawyer and obtained a court order allowing him to file another consumer proposal. This second consumer proposal is now awaiting creditor approval.

The important point is that his first proposal failed because he stopped making payments. If your situation changes and you can no longer afford the proposal, you need to talk to your trustee about this. It is possible to send an amendment to your consumer proposal if you are no longer able to make the payments you once could. If you would like to discuss consumer proposals in more detail, email me a question.

Pay day loans

2006-09-05T14:06:00.000-04:00

As a trustee based in Windsor, I have noticed a dramatic increase in the number of people who come to see me and owe money to various “pay day loan” stores. It is important to understand the cost of these loans before you use this form of debt. For instance, I looked a one company’s web site and they indicated that they charge $25 for every $100 you borrow.

Let's say a paycheque is $300. You borrow $100 from the pay day loan store, and now owe them $125. You get your $300 paycheque next week, but now you only get to keep $175, the rest pays back the loan. For many people, they have started started into a cycle which is very difficult to get out of. I meet with some people who owe money to 2 or more pay day loan stores. You need to look at the big picture before you get stuck into a bad cycle. If you can't pay your credit cards and unsecured loans, you should call us at 519-250-8060 or 310-PLAN
to see if a consumer proposal or personal bankruptcy is an option for you.

Debts greater than $75,000

2006-08-17T14:33:00.000-04:00

As a Windsor trustee, I am occasionally asked what a debtor can do if his debts are over $75,000. He doesn’t want to file bankruptcy, and as noted on our website a consumer proposal can only be filed if the debts are less than $75,000 (not including the mortgage on the principal residence). What can he do?

He can offer what is called a division 1 proposal. The legislation was originally intended to be used for companies, and was written when the average debt level was less a lot lower than it is today. A division 1 proposal is similar to a consumer proposal however there are some key differences:

- a meeting of creditors to vote on the proposal is required within 21 days of filing the proposal;
- the proposal is accepted only if the unsecured creditors accept the proposal by a majority in number and 2/3 in dollar value voting on the proposal;
- if the proposal is rejected, the debtor is automatically bankrupt; and
- if the proposal is accepted, the trustee then goes to court to receive court approval of the proposal.

There are other differences which are beyond the scope of this blog.

If your debts are debts are greater than $75,000, not including the mortgage on your principal residence, call or email me to discuss if a division 1 proposal can help you.

Can I file for bankruptcy in Windsor if I work in Detroit?

2006-07-23T16:11:00.000-04:00

As a Windsor trustee, I am getting that question asked more of me than I was a few years ago. The Canadian dollar is a lot stronger now compared to the US dollar than it was before. To people who work in the US this seems like a pay cut. A few years ago they were getting $1.50 exchange, now they are getting $1.10 exchange. However, the cost of gasoline and tolls has increased.

Yes you can file for bankruptcy in Windsor if you work in Detroit, but live in Windsor. You can meet with me and we will review all of your options. Chances are that your wage is still good, just not good enough to pay your minimum monthly payments each month. If that sounds like you, then a consumer proposal is probably a good option. If you would like to review your situation in more detail, call or email me a question.

I own a house in Windsor. Should I file a consumer proposal or get a second mortgage?

2006-07-19T15:26:00.000-04:00

I own a house in Windsor. Should I file a consumer proposal or get a second mortgage?

The answer is, it depends. If you can obtain a second mortgage at a low interest rate and pay off all of your debt in full that makes sense. However if you are unable to pay off your debts in full, a consumer proposal makes more sense.

I recently saw a couple in Windsor who were trying to decide what to do. A consumer proposal seemed the best alternative because a second mortgage would not allow them to pay off all of their debts. However, they decided to get a second mortgage and realized the next month that they couldn’t afford it and all of the rest of their debt. They then filed a consumer proposal to deal with their remaining unsecured creditors, plus they also have their mortgages to pay. However, if they have filed a consumer proposal initially their total monthly payments would have been lower. It's important to do all of your homework first.

If you would like to review your situation, email a question.

New Legislation for Exempt Automobiles

2006-06-23T15:58:00.000-04:00

Yesterday, new legislation was passed dealing with the equity in an automobile in a bankruptcy. Prior to June 22, 2006, an automobile was exempt from seizure if its value was greater than $5,650. For example, if the car was valued at $5,000 it was not seized by the trustee, but if it was worth $5,700 it was seized by the bankruptcy or the bankrupt had to pay the trustee the value of $5,700.

Under the new legislation, the first $5,650 is exempt from seizure. For example, if the car is valued at $5,700, the bankrupt person has to pay the difference of $50 ($5,700-$5,650) to the trustee.

This new wording will help people filing bankruptcy to keep their car, and help them get a fresh start.

To discuss your financial situation and develop a plan that is right for you, call the Windsor of Hoyes, Michalos and Associates at 250-8060 or email a question.

What debts are included in a bankruptcy?

2006-05-31T15:32:00.000-04:00

We are often asked what debts are part of the bankruptcy. The Bankruptcy and Insolvency Act states that all debts are discharged (gone) once your bankruptcy ends except in general for:

- student loans that are less than 10 years old,
- fines, penalties, restitution orders,
- awards for damages in civil court for wrongful death or sexual assult,
- alimony or support,
- debts incurred through fraud or misrepresentation,
- an amount a creditor who didn't know about a bankruptcy would have received if they had been notified of the bankruptcy.

There are always interpretations about what kind of debt does not go away in a bankruptcy. To review your situation in Windsor, please call our Windsor office at 250-8060 or 310-PLAN or email a question.

What is the difference between debt consolidation and a consumer proposal

2006-05-04T14:46:00.000-04:00

Debt consolidation is a loan offered to a debtor by their bank. For example, if you have $30,000 in credit card debt, if you qualify, the bank will give you a $30,000 loan to pay off these credit cards. Depending on your term and interest rates, the payments could be around $650 per month for 5 years or more.

A consumer proposal is a payment plan administered by a licensed trustee in bankrupty. You offer a payment plan to your creditors based on your ability to pay. In most cases the payment is alot lower than a debt consolidation.

To discuss a consumer proposal in more detail, call or email a question.

What are the options to bankruptcy?

2006-04-09T15:49:00.000-04:00

Many people don't want to file for bankruptcy for a variety of reasons. Fortunately, there are other options to bankruptcy.

Credit counselling is good for people who have the money to pay their bills, they just need help managing their money. If your debts are manageable, in my experience probably less than $5,000, the credit counsellor could help you file a debt management plan. Contact a credit counsellor for more information.

If you have already been to your bank for a consolidation loan, but that option was not available to you, consider filing a consumer proposal.

I will be happy to meet with you and discuss how a consumer proposal might be able to help you.

Windsor, Ontario Canada Personal Bankruptcy Rates for 2005

2006-02-20T09:15:00.000-05:00

How many people declared personal bankruptcy or filed a consumer proposal in Windsor, Ontario in 2005?

The Office of the Superintendent of Bankruptcy recently released statistics. In the city of Windsor, a total of 1,258 people filed for bankruptcy and 198 filed a consumer proposal. That is an increase of 7.8% for bankruptcy and 38.5% for consumer proposals over 2004. Compare this to the provincial increases of 1.8% and 8%.

I was the trustee or administrator on over one fifth of these filings, making Hoyes, Michalos & Associates Inc. a very active firm in Windsor, Ontario in 2005.

These numbers are high, but remember that each situation is unique. I encourage you to email or call our Windsor office at 250-8060 or 310-PLAN to arrange a meeting to review your individual situation.

What Happens at Your First Meeting

2006-02-03T16:03:00.000-05:00

At Hoyes, Michalos & Associates Inc. we take pride in the personal service we offer. That is why at our Windsor office, you will meet with Rebecca Martyn, the trustee responsible for the Windsor office.

The purpose of the meeting is to review your unique situation and to develop a plan that is right for you (just think of our phone number 310-PLAN).

I will need to know who much money you owe, which companies you owe money to, what assets you have and your monthly income and expenses. At the first meeting, more information is better. We will talk about debt consolidation, credit counselling, proposals and personal bankruptcy.

You are free to ask questions. Sometimes it is easier to write them down and bring them with you so you don't forget anything.

I will give you information to take home and read so you can decide the next step at your own pace.

Free free to email a question, or give our Windsor office a call at 250-8060 or 310-PLAN to arrange your free initial consultation.

The Windsor Office of Hoyes, Michalos

2006-01-10T15:53:00.000-05:00

The Windsor personal bankruptcy blog is sponsored by Hoyes, Michalos & Associates Inc., a leading Windsor Ontario personal insolvency firm.

We are located at 420 Devonshire Road, Windsor. We share office space with PMC Inc.

To make sure you get the personal attention you deserve, an appointment is required to come and meet with me. I am in the office every business day and I have evening appointments available. Either I or one of my associates will be happy to help you to book an appointment.

Please email us, or give our Windsor Ontario office a call at 250-8060 or 310-PLAN if you have any questions or would like to arrange a free initial appointment.

Welcome to the Windsor Bankruptcy Blog

2006-01-05T15:36:00.000-05:00

Welcome to the Windsor bankruptcy blog. We have created this blog to help individuals with bankruptcy questions in Windsor, Ontario.

My name is Rebecca Martyn and I am a licensed trustee with Hoyes, Michalos & Associates Inc. I am responsible for the office in Windsor, Ontario. I will be posting helpful information to this blog and answering your questions about bankruptcy and alternatives to bankruptcy.

Feel fee to email a question, or to call us at in Windsor at 250-8060 or 310-PLAN.