Brantford Ontario Personal Bankruptcy Blog

Debt Problems in Brant County

2008-03-26T20:49:00.000-04:00

Over the lunch hour today I was invited to speak to a group of employees at the Brant County Health Unit here in Brantford. Many large employers often hold “lunch and learn” sessions where guest speakers discuss topical issues. Even if we are not experiencing financial problems ourselves, we often know others who have money problems, so I was asked to discuss strategies for dealing with debt problems.

I started by describing the typical person I help here in Brantford. I explained that often bad things happen to good people, and as a result of job loss, marriage break up, medical condition, or bad money management people use credit to survive and end up with more debt than they can handle.

We then talked about solutions to debt problems, including personal budgeting, debt consolidation, credit counselling, consumer proposals, and bankruptcy.

The group then had lots of questions about different ways to deal with debt, and they also had many questions about credit reports.

Regarding credit reports, I recommended getting a free copy of your credit report each year to ensure that all information is correct. (You can get a free copy from the Equifax web site).

I closed by reminding everyone that financial problems occur frequently, so if you know of anyone experiencing debt problems, help is available by calling my office in Brantford at 519-770-4440, or e-mailing me to set up a free initial consultation.

How Many People Go Bankrupt in Brantford Each Year?

2008-02-16T13:20:00.002-05:00

After experiencing a decline in the personal bankruptcy rate in Brantford in 2005 and 2006, the number of personal bankruptcy filings in Brantford increased by 13% in 2007. In total, 384 residents of Brantford went bankrupt in 2007.

In addition, a further 112 Brantford, Ontario residents filed a consumer proposal in 2007, a 12% increase from the 100 people in Brantford who filed a consumer proposal in 2006.

While the unemployment rate declined slightly in 2007 in Brantford, employment growth was a tepid 1%. Similar to other communities in Ontario, Brantford has lost higher paying manufacturing jobs and replaced these with lower paying service jobs. In early 2007, Genfast Manufacturing Company was just one company to close resulting in the loss of 210 jobs in Brantford. In August, Canadian Blue Bird closed affecting a further 130 manufacturing jobs. The list of plant closings also included Easton Coatings, Dura Automotive and Kester Canada.

By way of contrast, personal bankruptcies increased by 5.2% in all of Ontario, and by only 0.7% in all of Canada, so obviously Brantford has been hit harder than other cities in Canada.

If you have lost your job, or had your hours cut back at work, or if you are just faced with more debt than you can handle, please call me in Brantford at 519-770-4440, or e-mail me to set up a meeting to review your options, and let me help you find a solution to your debt problems.

Brantford Bankruptcy Trustee in Ottawa

2008-02-10T14:53:00.000-05:00

On February 7, 2008 my Brantford bankruptcy office was closed. I was in Ottawa, appearing as an expert witness before the Senate Standing Committee on Banking, Trade and Commerce to provide testimony on the proposed new bankruptcy rules.

Most of the witnesses that have appeared before the Committee were lawyers or lobbyists; no-one had appeared to give the average bankrupt's perspective. In my opening remarks I told the Senators that the average person who goes bankrupt in Brantford, or anywhere in Canada, is a real person who in many cases has lost their job, gone through a marriage break-up, suffered through an illness or other personal problem, and is left with an overwhelming amount of debt.

In other words, people who go bankrupt, in most cases, are honest but unfortunate people who need a fresh start. It's important that we don't create bankruptcy rules that make it too difficult for the honest person to get a fresh start.

Our testimony lasted for over an hour, and I believe that when we were finished the Senators had a better appreciation for the problems faced by the average person who needs to file a proposal or bankruptcy in Brantford.

I don't plan on returning to Ottawa any time soon, so if you live or work in the Brantford area and want to talk to someone who provides expert testimony on complex rules, but who also will sit down with the average person and help them understand their options, please call me in Brantford at 519-770-4440, or e-mail me to set up a meeting to review your options, and help you get the fresh start I believe you deserve.

Credit Education Week in Brantford

2007-11-13T13:44:00.000-05:00

Today I received an e-mail from Michelle Miranda, the manager of Credit Counselling at the Family Counselling Centre of Brant, located at 54 Brant Avenue (about a five minute walk from my office at 218 Brant Avenue).

The Family Counselling Centre of Brant is the only not-for-profit credit counseling agency in Brantford that offers one-on-one, face-to-face meetings with people experiencing financial problems. Michelle and her team can help people learn to budget, and they can negotiate payment arrangements with your creditors, called a debt management plan.

She e-mailed me today to remind me that today is the launch of the first annual Credit Education Week, which runs from November 13 to November 16. During the launch, the results of a national consumer survey of more than 4,000 Canadians were released, and the survey showed that the majority of Canadians do not have a sufficient understanding of basic personal finance and credit.

Michelle and I have discussed credit problems many times over the years, so neither one of us was surprised that the survey found that 92% of the survey respondents feel that Canadians have more debt than they did five years ago, however only 7% perceive that it makes sense to carry a larger amount of debt now as compared to 5 years ago. Full results of the survey can be found at crediteducationweekcanada.com.

If you are carrying more debt than you can handle, you should take action now, before your problems get even worse. As described in our article on credit counselling in Brantford, one option is a debt management plan that typically involves your creditors agreeing to a reduced or zero interest rate, provided you repay them in full over no more than a five year period. Michelle and her team at the Family Counselling Centre of Brant would be happy to explain the process.

If you have more debt than you can repay over a five year period, then a consumer proposal or a bankruptcy may be another option.

Whether it's a debt management plan, consumer proposal, or bankruptcy, help is available, and the sooner you get help, the sooner you can get your financial life back on track. For more information on credit counseling or debt management plans, contact Family Counselling Centre of Brant in Brantford at (519) 753-4173. For information on consumer proposals or bankruptcy, please call me at the Hoyes Michalos office in Brantford at (519) 770-4440.

Small Business and Bankruptcy in Brantford

2007-10-24T14:06:00.001-04:00

Question: If I file for bankruptcy in Brantford will I still be able to run my small business? I only suppliment our family income with my business, earning less than $2000 per year and using various computer equipment and software valued in the neighbourhood of $5000. I guess I want to know if I will have to give up my equipment and computers.

Answer: Yes, you will probably be able to continue to operate your small business, and keep your computer equipment if you go bankrupt in Brantford. You are allowed to keep basic goods, so the answer will depend on what other furniture and equipment you own.

There are also a number of issues related to operating a business while bankrupt, including tax issues, so I suggest you give my office a call in Brantford at 519-770-4440 or e-mail me and we can set up a time to discuss your situation in more detail.

How Do I Know if I am Getting Good Advice from my Brantford Bankruptcy Trustee?

2007-10-05T17:14:00.001-04:00

I meet with dozens of people every month at my Brantford bankruptcy office. I do my best to answer all of their questions in plain English. However, some of the questions are complicated, and some bankruptcy concepts can be difficult to understand. So how do you know if the answers I am giving make sense? Here are my suggestions:

First, before you meet with me, do some research on your own. This site is a great place to start. Be sure to write down your questions before we meet, so you don't forget to raise any issue.

Second, if you have a friend or family member who has gone bankrupt, ask them about their trustee. If they were pleased with their trustee's level of service, that's a great place to start (whether or not it was me).

Finally, when we are talking, think about what I'm saying. Does it make sense? Are you receiving clear answers to your bankruptcy questions? Do I seem interested in your situation, or am I more interested in speeding through the meeting? My days are always busy, but I do my best to spend as much time as necessary with you to answer all of your questions.

I can tell you that, like all trustees, I am licensed by the federal government. If I'm not doing my job I can lose my license, so I work hard to make sure you are getting the answers to every question you ask.

I strongly believe that you should let your judgment be your guide when deciding which trustee is going to be a good bankruptcy trustee for you. If you are not comfortable with the person you see, or you don't believe you are getting good advice from a trustee, get a second opinion. There are many trustees in most cities in Canada, so you can talk to other ones until you find one that will be a good bankruptcy trustee for you.

To set up a meeting with me, please call my Brantford bankruptcy office at 519-770-4440, or e-mail me to set up a meeting with me personally. I'm here to answer your questions, so let's get started.

Bankruptcy Rate Rises Dramatically in Brantford in the First Half of 2007

2007-08-02T11:11:00.000-04:00

In statistics just released by the Superintendent of Bankruptcy, the number of personal bankruptcies filed in Brantford in the first six months of 2007 was 198, a 21% increase over the 163 Brantford residents who filed personal bankruptcy in the first six months of 2006.

This compares to a 5% increase in the rate of personal bankruptcy in Ontario, so Brantford's increase was much larger than the Ontario average.

From January to June of 2007 55 Brantford residents filed a consumer proposal, as compared to 52 people in the same period last year, for a 6% increase. A consumer proposal is an alternative to bankruptcy, where you make payments to your creditors over a period of time, usually for less than the full amount owing. (So far this year I have filed about 40% of all consumer proposals filed in Brantford, so if you want more information, please give me a call).

I am starting to see signs of a weakening economy in Brantford. I have helped many more people this year than last year, and as interest rates rise I suspect the trend will continue.

If you want a fresh start, feel free to call my office in Brantford at 519-770-4440, or e-mail us to ask your question or set up a free initial consultation to review your options. Don't let your financial problems get out of hand; there is help available, so feel free to call.

What Happens to my car if I go bankrupt in Brantford?

2007-07-07T15:02:00.000-04:00

Since opening my Brantford bankruptcy office in 1999, one of the most common questions I am asked is "will I lose my car if I go declare personal bankruptcy in Brantford?" This is a big issue in Brantford, because many of us need our cars to get to work (as we all know, there is no subway in Brantford).

The answer depends on a few factors.

First, if you live in Brantford, or anywhere else in Ontario, you are allowed to keep one motor vehicle worth up to $5,650 if you go bankrupt. So, if you are driving an old car, you may be able to keep it.

However, if there is a lien on your car, or if you got a loan and pledged your car as security, whether or not you keep your car if you go bankrupt is up to the lender. The lender in most cases will allow you to keep the car, provided you continue to make all of your regular car payments.

A word of caution: not all banks will allow you to keep your car. Most banks do, but there is one bank in particular that will automatically repossess your car if you go bankrupt, even if your payments are up to date. I don't want to get sued so I'm not going to mention the name of that bank in this blog posting, but if you send me an e-mail or give my office a call in Brantford at 519-770-4440 I would be pleased to review your situation and let you know whether or not it is likely that you will be able to keep your car if you go bankrupt.

Bankruptcy Rate in Brantford Falls in 2006

2007-02-23T15:43:00.000-05:00

The bankruptcy rate in Brantford fell in by 6.2% in 2006, due largely to employment growth of 2.0%, and an unemployment rate that fell to 6.3%, the lowest level in four years. In 2006 341 people filed for personal bankruptcy, and a further 100 people filed a consumer proposal.

The decrease in the personal bankruptcy rate in 2006 was the largest annual decrease in the bankruptcy rate in Brantford since the 8.4% drop recorded in 2002. Unfortunately in 2003 the bankruptcy rate increased by 17.9%, the largest increase in many years. Will we see an increase in the bankruptcy rate in 2007, like we saw in 2003?

Probably not. As new employers move to Brantford the employment picture should remain positive, so I predict very little change in the personal bankruptcy rate in Brantford in 2007.

Of course just because bankruptcies are down does not mean that people don’t get into trouble. If you are in financial difficulty, you are not alone. In 2006 441 people in Brantford filed a consumer proposal or a personal bankruptcy, so if you want help, please e-mail me a question or call our Brantford office at (519) 770-4440 to book a no-charge initial consultation, and let’s get started.

Can a Collection Agent Take my Furniture If I Don't Pay My Debts?

2006-12-02T14:43:00.000-05:00

Every week I meet with someone in my Brantford office (at 218 Brant Avenue, across of from the Avenue Medical Centre) that tells me a collection agent is threatening to come to their house and take their furniture. In most cases I tell them that it is highly unlikely that anyone will take their furniture.

In order to be able to seize your furniture the lender must have a lien on your furniture, or they must have a court order. If they don't, they can't take your furniture.

Many finance companies give what are called household goods loans. As part of the loan documents they make you sign a document, with a list of your furniture, that gives them the right to repossess your furniture if you don't pay. They must then register this lien in the Ontario government's Personal Property Security Act system in order for the lien to be valid in most cases.

If they have not registered a lien, they will require a court order to seize household goods, which is very difficult to get (the courts almost never allow for the seizure of household goods).

If collection agents are threatening you, you probably have more debt than you can handle, so I suggest you e-mail me or call my office in Brantford at 519-770-4440 to set up a meeting with me personally to review your situation and determine how we can make a plan to deal with your debts.

Mortgage after a consumer proposal

2006-11-01T15:12:00.000-05:00

How long before you can apply for a mortgage after you have done a consumer proposal?

How Does Bankruptcy in Brantford Affect my Credit?

2006-10-20T12:51:00.000-04:00

There is a lot of confusion about how long a bankruptcy in Brantford will remain on your credit report. Here are the facts:

According to Equifax, Canadas largest credit reporting agency:

"A bankruptcy automatically purges six (6) years from the date of discharge in the case of a single bankruptcy. If the consumer declares several bankruptcies, the system will keep each bankruptcy for fourteen (14) years from the date of each discharge. All accounts included in a bankruptcy remain on file indicating "included in bankruptcy" and will purge six (6) years from the date of last activity."

"When a registered consumer proposal is paid, it will automatically purge three (3) years from the date paid."

In other words, a first bankruptcy remains on your credit report for six years from the date of discharge, and a consumer proposal remains on your credit report for three years from the date your proposal is completed.

Please note that your ability to borrow is affected not only by what's on your credit report, but also by your income, job history, and ability to make payments.

My advice: if you have more debt than you can handle, give us a call at 310-PLAN (no area code required) or e-mail us and we will meet and determine if a bankruptcy or proposal is necessary to deal with your debts. If it is, we can then make a plan to re-build your credit once your bankruptcy or proposal is completed.

Income Tax Debts?

2006-10-11T14:14:00.000-04:00

At Hoyes, Michalos & Associates in Brantford, we meet with many individuals from the community for various reasons, but one common element in some of the cases is the existence of tax related debts. A tax related debt could arise for many difference reasons including being self-employed, cashing out RRSP's, working more than one job, pensions receiving pension income with out taxes taken off, etc. What ever the reason, tax debts tend to be hard to plan for as they are calculated after the year is over and when added to all the living expenses and other personal debts that individuals have it can be unmanageable.

At Hoyes, Michalos & Associates, we have group of people that can assist with individuals experiencing financial difficulty. I am Scott Schaefer and my background is I am a Chartered Accountant with various accounting and taxation experience. Currently, I am in the final stages of the trustee in bankruptcy program. I have been working in the insolvency/bankruptcy industry since 2002. With this insolvency and tax experience, I manage the income tax group at Hoyes, Michalos & Associates and assist many individuals in dealing with there tax debts and obtaining a fresh financial start.

If you are currently are in a financial situation, including income tax debt problems, and want to discuss your options, you can reach us at 310-PLAN or e-mail us. We can arrange a free consultation at our Brantford office located at 218 Brant Avenue.

Credit Counselling in Brantford - Family Counselling Centre of Brant

2006-09-27T14:48:00.000-04:00

Yesterday I met with Michelle Miranda, the Manager of Credit Counselling at the Family Counselling Centre of Brant, located at 54 Brant Avenue (about a five minute walk from my office at 218 Brant Avenue).

The Family Counselling Centre of Brant is the only not-for-profit credit counseling agency in Brantford that offers one-on-one, face-to-face meetings with people experiencing financial problems. Michelle and her team can help people learn to budget, and they can negotiate payment arrangements with your creditors, called a debt management plan.

As described in our article on credit counselling in Brantford, a debt management plan typically involves your creditors agreeing to a reduced or zero interest rate, provided you repay them in full over no more than a five year period.

According to Ms. Miranda, the typical debt management plan they do in Brantford would be for a person with between $10,000 and $20,000 in debts, and would involve payments of $200 to $400 per month over a period of up to five years.

Family Counselling Centre of Brant has a great deal of success negotiating debt management plans with various types of debts, including credit cards, bank loans, and even finance company and payday loans.

In my experience debt management plans are a great option if you are able to pay your debts in full, but you need some time, say two to five years, to make the payments. Debt management plans work best if you have a good income, and a manageable amount of debt.

If you have more debt than you can repay over a two to five year period, then a consumer proposal or a bankruptcy may be a better option.

Whether it's a debt management plan, consumer proposal, or bankruptcy, help is available, and the sooner you get help, the sooner you can get your financial life back on track.

For more information on credit counselling or debt management plans, contact Family Counselling Centre of Brant in Brantford at (519) 753-4173. For information on consumer proposals or bankruptcy, please call the Hoyes Michalos office in Brantford at (519) 770-4440.

Filed as: credit counselling, debt management plan, personal bankruptcy, bankruptcy Brantford, consumer proposal

Will a softening real estate market cause an increase in the rate of bankruptcy in Brantford?

2006-09-26T10:29:00.000-04:00

I had a meeting today with Tom Mattice, a real estate agent with Royal Lepage Action Realty here in Brantford. Tom told me that since the beginning of September he has seen a definite softening of the real estate market here in Brantford. According to Tom, "the last three years have been booming, and we are now starting to return to more normal activity, like we had five years ago in Brantford."

The real estate market has not increased as much in Brantford as it has in areas like Toronto, so Brantford's real estate market will "soften", but probably not experience significant declines.

However, Tom pointed out that CMHC is projecting that mortgage interest rates will increase over the next year from around 5.5% to 7.25%, which mathematically is an increase of over 30%! That means if you are paying $1,000 per month in mortgage interest now, that could increase to $1,300 per month when you renew your mortgage next year.

Since most people have not had 30% pay increases this year, that will take a big bite out of everyone's budgets, and that doesn't include increases in property taxes, heat, hydro and other costs.

If interest rates continue to increase, and house prices in Brantford do fall, it is possible that some people will be forced to sell their homes at a loss, which may lead to an increase in the bankruptcy rate in Brantford.

Tom's advice? If you have a lot of debt and you are thinking about selling your house to use the equity to repay some of your debts, now is probably the time to sell. If you wait until next year, it's possible that house prices will be lower.

If you live in the Brantford area and want an independent evaluation of the value of your home, or if you are thinking of buying or selling a home, Tom Mattice can be reached at his Brantford office at (519) 753-7311.

If you have more debt than you can handle, and want advice on strategies to deal with your debt, please call our Brantford office at (519) 770-4440 or e-mail us a question and we would be happy to set up a no-charge initial consultation.

Filed as: personal bankruptcy, bankruptcy Brantford, bankruptcy Ontario

A bill collector says they will take me to court if I don't pay. Will I go to jail for not paying by debts?

2006-09-19T19:18:00.000-04:00

Collection agents are very good at collecting money. (In fact, there is a large collection agency right here in Brantford). Collection agents will use "every trick in the book" to get you to pay what you owe. They will threaten to take you to court, and may even tell you that you will go to jail if you don't pay your debts.

It is true that if you don't pay your debts, they can take you to court. If they win in court, they can request a Garnishment Order from the Judge, which allows them to garnishee your wages. If they get a Garnishment Order, you have three choices:
1. let them garnishee your pay until the debt is paid in full;
2. file a consumer proposal; or
3. declare bankruptcy.

However, they cannot put you in jail for not paying your debts. In Canada, thankfully, you only go to jail if you are charged with or convicted of committing a criminal offense. If you kill someone, you will go to jail. Not paying your debts is not a criminal offense, so they won't put you in jail for that.

If you commit fraud, you can go to jail. If you rob a bank, you can go to jail. But using a credit card, fully expecting to be able to pay it, and then losing your job and not being able to pay it, is not a criminal offense.

Of course collection agents generally only call you if you owe money, so if you cannot make payment arrangements with them directly, it may be time to consider outside help, so please give our Brantford trustee office a call at (519) 770-4440 and we can discuss your options for dealing with your debts, including debt consolidation, credit counselling, consumer proposals or a bankruptcy.

Tagged as debt consolidation loan, credit counseling, consumer proposal, personal bankruptcy, bankruptcy Brantford, bankruptcy Ontario

Bankruptcy and Gambling in Brantford

2006-08-30T16:20:00.000-04:00

Here's a question we received:
I'm facing a bad financial situation and I'm a gambler.What will happen if I will try to file bankruptcy on gambling?

Here's the answer regarding gambling and bankruptcy:

Each year I meet with a number of people who have debts as a result of gambling. It is possible to go bankrupt in Brantford and have your gambling debts discharged.

Section 173(1)(e) of the Bankruptcy & Insolvency Act states that if: "the bankrupt has brought on, or contributed to, the bankruptcy by rash and hazardous speculations, by unjustifiable extravagance in living, or by gambling ..." then the court may refuse or suspend the discharge of the bankrupt, or require the bankrupt to perform other duties.

In my experience, if gambling was a significant contributing factor to the bankruptcy, it is likely that the bankrupt person will not receive an automatic discharge in the usual minimum period of nine months. It is the Bankruptcy Court's practice to extend the bankruptcy for a further 12 months, during which time the bankrupt must continue to make payments to the estate based on their income.

However, each case is different, and it is up to the court to determine in each case how a bankruptcy should end. The court will also consider what actions the bankrupt has taken to prevent themselves from having further gambling problems, such as attending counselling and having themselves voluntarily banned from attending a casino.

This is a complicated area, and there are many factors to consider, so I strongly recommend that you call our office in Brantford at (519) 770-4440 or 310-PLAN or e-mail us for more information and to set up a free initial consultation.

Filed as: personal bankruptcy, bankruptcy Brantford, gambling bankruptcy

Personal bankruptcy rate falls dramatically in Brantford

2006-08-25T14:35:00.000-04:00

In statistics just released by the Office of the Superintendent of Bankruptcy, the number of personal bankruptcies filed in Brantford between January and June of this year fell by 13% as compared to the same period last year. In the first six months of 2005 188 individuals filed bankruptcy; that number fell to 163 in the first six months of 2006.

The number of consumer proposals also fell dramtically, from 64 in 2005 to 52 in the first six months of 2006 in Brantford, for a drop of 20%. (A consumer proposal is an alternative to bankruptcy where you make payments over time to deal with your debt).

Combining both numbers the rate of personal insolvency fell by 15% in Brantford. Of all major cities in Ontario, only London (at 16%) and Peterborough (at 27%) experienced larger declines. In all of Ontario personal insolvencies fell by 5%, so Brantford is well ahead of the average.

While it is impossible to know for sure why the bankruptcy rate is falling in Brantford we believe it is because interest rates remain relatively low, making it easier to continue servicing debt, and because the employment picture in Brantford and surrounding areas has improved.

However, as interest rates continue to increase, and if the economy begins to slow down, the bankruptcy rate in Brantford may once again resume it's upward trend.

If you are experiencing financial problems and don't want to become a statistic, feel free to call our office in Brantford at (519) 770-4440 or 310-PLAN or e-mail us for more information or to set up a no charge initial consultation.

personal bankruptcy, bankruptcy Brantford, bankruptcy Ontario

return of consultation file

2006-07-14T08:12:00.000-04:00

This question was received today:
If you go to several bankruptcy companies and decide on the one that you feel most comfortable with can I go back to the other companies and get my file back without any problems.
Thank you.

Here's the answer:

Yes, your paperwork is your paperwork, so you can call up the bankruptcy trustee and request that your information be returned.

New Rules: Brantford Residents More Likely to be able to Keep Their Car if they go Bankrupt

2006-06-22T21:59:00.000-04:00

As the trustee responsible for the Hoyes Michalos bankruptcy office in Brantford since 1999 it has been my experience that most residents of Brantford own a car or truck, and most people use their motor vehicle to get to work, often outside of Brantford.

Many people live in Brantford because housing costs are more reasonable than other parts of Ontario, but work in larger cities where jobs are more plentiful and pay better, like London, Cambridge, Hamilton, Mississauga and Toronto.

Unfortunately the fact that you need a car to get to work does not mean you can keep your car if you go bankrupt in Brantford. Prior to April 15, 2001, if you went bankrupt in Ontario, you were required to surrender your car to the trustee, or pay the trustee the value of the car. On April 15, 2001 the rules changed to make a $5,000 car exempt in a bankruptcy, and on December 14, 2005 that limit was increased to $5,650.

However, an Ontario Court of Appeal court case decided that only cars under the exemption limit were exempt, so if you went bankrupt in 2004 and owned a $6,000 car with no liens against it, you were required to pay the trustee $6,000 if you wanted to keep your car.

Now for the good news for residents of Brantford, and everywhere else in Ontario. Today, June 22 2006, the Ontario government gave third reading, and Royal Assent, to Bill 190, the Good Government Act, 2006. I won't bore you with the legalities of this new legislation, other than to say that buried deep in the almost 200 pages of this bill is a change to the Ontario Execution Act that now allows a bankrupt to retain their motor vehicle by only paying the equity to the trustee.

Continuing with our previous example, if you own a car worth $6,650 with no liens against it, thanks to these new rules, instead of paying the trustee $6,650 to keep your car while bankrupt, you now only need to pay the difference above the exemption limit, or $1,000, to keep your car.

I believe these new rules will help many Brantford residents who need their car to get to work, but have more debt than they can handle and need to go bankrupt. It will be easy to keep their car and still get the relief they need.

These rules have changed four times in the last five years, and they may change again, so if you own a car and have more debt than you can handle, please call our office in Brantford at (519) 770-4440 or e-mail us for more information.

personal bankruptcy, bankruptcy Brantford, bankruptcy Ontario

Does Job Loss Lead to Bankruptcy in Brantford?

2006-06-09T16:29:00.000-04:00

Over the years Brantford, Ontario has suffered some significant job losses. The biggest job loss probably occurred in 1988 when Massey Ferguson went out of business in Brantford, and Brantford's unemployment rate peaked at almost 14% in 1993, as seen in this chart:

I was reminded of this when I learned this week that Raymond Industrial Equipment Ltd., a large forklift and pallet truck manufacturer and a significant employer in Brantford since 1966, was laying off about 50 full time employees, and other contract employees will also lose their jobs. Approximately 400 employees will remain at the plant, but the employees who lose their jobs will have to replace this job with another hopefully well paying job.

Last year employment in Brantford grew by 5.5% (after declining 3.3% in 2004), so it's no surprise that the personal bankruptcy rate in Branford fell 2.3% in 2005. (481 consumer proposals and bankruptcies were filed in 2004, falling to 470 in 2005). Clearly, employment does have a significant impact on the rate of bankruptcy in Brantford, and it's easy to see why.

While people are working, they have the cash flow to pay their living expenses and service their debts. As soon as they lose their job they may be forced to use credit cards and lines of credit to survive. This increases their debt, and without an income to pay the debts, the debts increase, often leading to personal bankruptcy.

If you have lost your job, or had your hours reduced at work, and if that has caused debt pressure, feel free to give my office a call in Brantford at (519) 770-4440 or e-mail us to set up a free consultation to review your options, and determine what needs to be done to get back on track.

personal bankruptcy, bankruptcy Brantford, bankruptcy Ontario

What's the Best Way to Deal with Collection Agents in Brantford?

2006-05-24T15:12:00.000-04:00

One of the ironies of meeting people in my Brantford office is that a lot of the calls they get from collection agents are coming from collection agents in Brantford!

Without naming names, one of the largest employers in Brantford is a collection agency. (Collection agents work for companies, like banks and credit card companies, to collect money from people who are behind on their bills). While many collection agencies are based in the United States or even overseas, it is not uncommon for Brantford residents to receive calls from collection agents based in Brantford.

Collection agents receive a commission for every dollar they collect, so they are persistent; they will keep calling until they collect.

There are five obvious strategies for dealing with collection agents.

First, if you have the money, pay them, or work out a plan to pay them over time. Making a budget is a good way to decide what you can afford to offer as a payment each month.

Second, try getting a debt consolidation loan to reduce the interest you pay.

Third, if you don't qualify for a debt consolidation loan, you could try a debt management plan through a not-for-profit credit counsellor; in Brantford, there is only one non-profit credit counselling organization: the Family Counselling Centre of Brant.

If your debts are too high for a debt management plan, a consumer proposal or a bankruptcy may be required.

Collection agents will not just give up, so if you are getting frequent calls from collection agents, call us in Brantford at (519) 770-4440 or e-mail us to ask a question or set up a free consultation.

budget, debt consolidation loan, credit counseling, consumer proposal, personal bankruptcy, bankruptcy Brantford, bankruptcy Ontario

When I Lose My Job, Should I Consider Bankruptcy?

2006-05-15T06:24:00.000-04:00

Since we opened the Hoyes Michalos bankruptcy office in Brantford, Ontario back in 1999, I have met with hundreds of people who have lost their job, or had their hours reduced, and now they are in financial trouble. Many of those people had debts before they lost their job; the job loss and resulting loss of income made a bad situation even worse.

It seems that over the years Brantford has had it's share of job losses, starting with the big Massey closing in the 1980s. Recently, I have met with a number of people who worked at Bluebird building buses for many years, and who have now lost their jobs.

My advice to everyone who loses their job is the same:

First, you need to develop a plan to meet your family's basic needs. You need cash flow to pay the rent or mortgage, to buy groceries, and to deal with your other living expenses. That means immediately starting to look for another job, and applying for Unemployment Insurance if appropriate.

Second, I recommend reducing your expenses as soon as possible. If you are currently unemployed, cut all non-essential expenses. That may include cutting things like premium cable, extra phone services, and entertainment expenses. Every dollar you save is a dollar you don't have to earn.

The housing market is hot right now, so if you own a house with a large mortgage now may be the time to consider selling your house and downsizing, if it makes financial sense to do so.

Next, you need to consider whether more drastic action is required. As you start to get behind on your bills, you may start to consider bankruptcy as an option, particularly if you are getting letter and phone calls from your creditors.

Bankruptcy in Brantford will get rid of your debts, but there are disadvantages, such as the requirement to make a payment each month to your trustee (which could be me) every month that you are bankrupt.

The reason most people go bankrupt is that they have more debt than they can handle, and they don't want their creditors taking them to court and garnisheeing their wages. So here's the most important point:

If you are not working, you have no wages, so your creditors cannot garnishee your wages, so you may not need to go bankrupt now. That's right, most people who go bankrupt are working, because they need to protect their wages from garnishment.

Of course if you are off work for a number of months, and then return to work, you then run a greater risk of having your wages garnisheed; that's why my typical advice is this:

While you are unemployed, use your cash to pay your living expenses; don't use your scarce cash to pay a trustee.

When you go back to work, if you don't think you can get caught back up, consider going bankrupt or filing a
consumer proposal to deal with your debts.

I'm not saying you shouldn't go bankrupt if you're not working. I have done many bankruptcies over the years in Brantford for unemployed people. What I am saying is consider your options carefully.

Feel free to give my office a call in Brantford at (519) 770-4440 or e-mail us to ask a question or arrange for a no-charge initial consultation to review your situation.

Personal bankruptcies in Brantford increase 30% in the first quarter of 2006

2006-05-05T17:10:00.000-04:00

In statistics released by the Office of the Superintendent of Bankruptcy, the number of Brantford residents filing a personal bankruptcy or a consumer proposal increased by 30% in the first three months of 2006, as compared to the first three months of 2005.

During the first three months of 2005, 61 Brantford Ontario residents filed personal bankruptcy or a consumer proposal. During the first three months of 2006 that number increased to 79, for a 30% increase.

If you live in Brantford and are experiencing financial problems, you are obviously not alone. Many other people are in the same situation. Financial problems usually don't get better on their own, so if you are losing sleep over your financial situation, feel free to e-mail us a question or call us in Brantford at 519-770-4440 to arrange for a no-charge intitial consultation.

Pay Day Loans and Bankruptcy in Brantford

2006-04-20T08:32:00.000-04:00

Over the last two weeks I have met with a number of people in our Brantford, Ontario office who have loans from payday loan companies. I reviewed one of the loan agreements.

This person had borrowed $270 for a period of twelve days. The "cost of borrowing" is 89 cents per $100 per week, which doesn't sound like very much. The agreement says that he will repay the company $274.12, for a cost of borrowing of $4.12. The disclosed interest rate is 46.44%.

However, here's the catch: To repay the loan the borrower is required to give the payday loan company a post-dated cheque for $315.36 to repay the loan. If the repayment is only $274.12, why is the cheque amount $315.36? Why the difference of $41.24?

Simple. In addition to the interest on the loan, there is also "standard first party cheque cashing fee." Since you are required to give a cheque to repay the loan, the payday loan company charges you a fee to cash the cheque.

This means that you are paying $45.36 to borrow $270 for 12 days. That works out to an interest rate of 511% per year! Now it doesn't sound like such a good deal.

The maximum interest rate chargeable in Canada is 60% per year, but because you are paying interest and service charges, the pay day loan companies actually charge more than the legally allowed interest rate.

The purpose of this blog entry is not to say that pay day loan places are bad. For some people they serve a useful purpose. One person this week told me that due to past credit problems he doesn't have a bank account, so pay day loan companies are the only place he can cash a cheque.

However, pay day loans are a very expensive form of borrowing, and once you borrow from them, it is very hard to stop.

For most people the story is the same: I borrow $270 this week, and at the end of next week I pay back $315. I don't have the $315, so next week I borrow $315, and end up having to repay $370 in two weeks. I don't have that, so I have to borrow again.

The cycle continues until you have payday loans from three or more places, and then for many personal bankruptcy becomes the only option.

My advice is simple: if you don't have to borrow from a pay day loan place, don't. In most cases you would be better off asking your landlord to wait a week to get the rest of the rent, or pay your phone bill a week late, than to borrow from a pay day loan company.

If you live in Brantford and have more debts than you can handle, including payday loans, I urge you to get help. Bankruptcy may be an option, but there may be other options as well, so e-mail us or call us today in Brantford at 519-770-4440 to set up a free consultation to make a plan deal with your debts.