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Kitchener Ontario Personal Bankruptcy Blog provides free personal bankruptcy information and helps Kitchener residents dealing with their debt. |
Below are the most recent personal bankruptcy questions. Be sure to check out our Frequently Asked Questions page for answers to more common questions about personal bankruptcy in Kitchener. Remember, you can always post an anonymous question, as well as arrange for a free consultation with a personal bankruptcy expert near you. |
Recent Bankruptcy Questions:
 This tax season may be a different time than ever before for many people in Kitchener-Waterloo. More people are losing their income through reduced hours or even lost employment is evident with the increase in the unemployment rate. The Kitchener unemployment rate is now over 9%. This global recession and financial crisis is affecting good hard working people. In our Kitchener office - located at 607 King Street, we are seeing a record number of people who are struggling to keep up with their basic household expenses, not to mention their debt payments.
Tax season could be a temporary relief for people receiving a large refund or alternatively it could compound the problem if people have to pay taxes. Either way, the stress of the current economy is affecting all of us. At Hoyes Michalos & Associates Inc. we are helping families make a PLAN to deal with their debts and focus on a fresh start financially. When someone calls us, typically they never thought they would have had to call us, but the harsh reality is that the economy has made it too difficult to pay their debts plus deal with the cost of living.
Sometimes a consumer proposal is the option that couples choose as it is a method of restructuring debts through a monthly payment plan. A consumer proposal allows the debtor to pay part of the debts back to their creditors at the same time protecting their assets. If that monthly payment is even too much for people, a personal bankruptcy is an option to discharge their debts. A personal bankruptcy is a process that runs for a minimum of nine months. Last year in Canada, 115 789 of people filed a proposal or personal bankruptcy and this year it is predicted to be much higher due to the economy and financial crisis. These options are Federal laws that are established to give the unfortunate Canadians fresh starts financially. This past Saturday, Ted Michalos and I spent an hour on the Ask the Expert Show on 570 News discussing the economy, taxes and the all important PLAN. If you have had a reduction in your income and the stress is affecting your life, it may be time to explore the options available to you. For a free no obligation discussion, call us in Kitchener at 519-747-0660 (or 310-PLAN) or send me an e-mail. Labels: bankruptcy kitchener, tax
 This past Saturday, Doug Hoyes and I spent an hour doing an Ask the Expert show on AM 570 News. The hour focused on Consumer Proposals. In short, a Consumer Proposal is a legal process in which individuals offer to repay a portion of their unsecured debts. This is acheived by making one monthly payment over a period of time that does not exceed 60 months. At Hoyes, Michalos and Associates Inc in Kitchener, we file on average 1 consumer proposal for every 2 personal bankruptcies. A couple other key features of a consumer proposal are: an individual can keep his/her asset(s) and an individual receives the same protection from the creditors as that in which is available in a personal bankruptcy.
When a consumer proposal is offered to the creditors, it is automatically accepted unless the majority of the credito’s dollar value vote not to accept the proposal. This vote must be received by the 46th day. Generally if the creditor votes no, they will offer an alternative amount at which point the individual can accept. From our experience, almost every proposal offered gets accepted (either as filed or with a counter offer).
Let’s consider an example of a recent consumer proposal that we offered in our Kitchener office today: · Married couple with 2 children; · The family of 4 makes $4,500/month of take home income (no more overtime is available at their work); · They own a home in Kitchener, with $8,000 of equity (estimated amount after selling costs); · They have 57,000 of credit card and line of credit debts; · They have 2 automobiles, one has a loan and the other is older and owned out right(without any liens against it); · The debts were accumulated over the past 5 years since they purchased the home and started their family. · We filed a consumer proposal to the unsecured creditors offering $400/month for 50 months = $20,000. · After the proposal was filed, the couple’s monthly budget was balanced, they were able to keep their house and vehicles, and the financial pressure was eased.  If you would like to discuss a consumer proposal in more detail call me at 519-747-0660 or 310-PLAN or e-mail me.
On Saturday November 18 at noon I will be appearing LIVE on Ask the Experts on 570 News to answer bankruptcy questions. My goal will be to answer the top 50 questions during the show. Since there is a newscast at noon and 12:30, the show lasts for about 50 minutes, so my goal will be to answer 50 questions in 50 minutes, so please tune in to get answers, or call in with your questions and I will answer them live on the air.
That's noon on November 18 on 570 News, or listen live on the internet at www.570news.com
Before someone files bankruptcy they should ensure they understand their duties as a bankrupt as outlined in the Bankruptcy and Insolvency Act. These duties apply to both individuals and directors/officers of corporations. Below is a summary of the duties:
a) disclose and deliver all assets they own or are in control of - there are some assets (to certain dollar value depending on province - see Ontario limits here) that are exempt form seizure of a trustee, such as household goods, personal effects, vehicle, tools of the trade, and some insurance contracts;
a.1)deliver to trustee, for cancellation, all credit cards issued and have in possession;
b) deliver to trustee all required books, records, and documents relating to property and affairs; c) if specifically required, attend for an examination under oath to answer questions regarding conduct, cause of insolvency, and disposition of property;
d) prepare a statement of affairs detailing assets, liabilities and other prudent information, which then is sworn to be a true statement;
e) assist trustee with making a list of inventory of assets;
f) disclose to the trustee all property disposed of within the period of one year before the date of the initial bankrupt event;
g) disclose to the trustee all property disposed of by gift or settlement without adequate valuable consideration within 5 years prior to the date of the initial bankrupt event;
h) attend the first meeting of creditors if a meeting is called;
i) when required, attend other meetings with creditors or inspectors, or attend for trustee;
j) attend other examinations under oath with respect to property or affairs as required;
k) aid with trustee in realization of non-exempt property and the distributions of proceeds among creditors;
l) execute any powers of attorney, transfer, deeds and instruments or acts that may be required;
m) review creditors proof of claims if trustee requests;
n) if you are ware that someone filed a false claim, disclose this immediately to trustee;
n.1)inform the trustee of any material change in bankrupt's financial situation;
o) generally do all such things as a reasonable given situation with consideration for the law;
p) keep trustee appraised of the bankrupt's location at least until estate is completed.
This list may seem overwhelming, but in general, the Bankruptcy and Insolvency Act is there to give the honest but misfortunate debtor a fresh start, so this section ensures that someone acts honestly and in good faith.
More details can be obtained at the Office of Superintendent of Bankruptcy's website.
To discuss these duties and your financial situation, please call us at 310-PLAN or e-mail us.
Every month I meet with a number of people in Kitchener who are retired, and have more debt than they can handle, and they want to know if they should file for personal bankruptcy.
Retired residents of Kitchener on a fixed income are in a difficult position. They worked their entire lives, but now find themselves on a reduced income. The cost of living increases faster than their fixed income pensions, and they find it hard to keep up. They use their credit cards to pay the bills, and after a few years they have accumulated more debt than they can ever hope to repay.
I always start these meetings by explaining their options. They can start by asking family for help, which is usually a difficult decision. They can sell off any assets they no longer need, such as a car they don't drive, or a house that is larger than they need.
If they have a large pension they could investigate a debt consolidation loan to reduce their monthly payments. If their income is not high enough to make debt repayments, they could investigate various bankruptcy alternatives, including talking to a local credit counselor about a debt management plan. A consumer proposal is another option.
Of course personal bankruptcy is also an option, but in many cases it is not legally necessary.
Personal bankruptcy is often referred to as bankruptcy protection because once you go bankrupt your credit card and bank loan lenders cannot garnishee your wages. But if you are retired and your income is from pensions, you don't have any wages to garnishee, so a bankruptcy may not be necessary.
If you open a new bank account at a new bank, it is possible that the creditors will not take any further action.
Of course getting phone calls is very stressful, so many older people decide to declare bankruptcy in Kitchener anyway, just for stress relief. That's fine, as long as your realize that you are going bankrupt more for stress relief than to receive legal protection from your creditors.
There are of course other factors to consider, both emotional and financial, so if you are someone you know is retired and having financial problems, please give our Kitchener bankruptcy office a call at 519-747-0660 or 310-PLAN, or e-mail us, and we will set up a no cost meeting to review your options in more detail.
At Hoyes, Michalos & Associates in Kitchener-Waterloo we meet with and help individuals that have a variety of financial difficulties. Sometimes, there are cases that have added technical issues that need to be resolved before we can put a solution in place to sort out their finances. For example, if the Canada Revenue Agency (CRA) has registered a lien on a person's home this needs to be investigated before a plan is developed. Similarly, if a person has arrears with the Family Responsibility Office (FRO) we need to address this before creating a plan.
This blog will outline some of the issues involved with respect to CRA and liens (see next week's blog to discuss FRO support arrears). General information is provided below - if you would like to discuss your specific situation please contact us via e-mail or at 519-747-0660.
CRA (formally Revenue Canada) has significant collections power legislated to them to collect tax related debts. They include simple collection calls, to garnishment of wages, to seizure of bank accounts, and even to registering on title on property. The method CRA selects to use to collect a debt varies depending on the type of debt, the amount owed, the nature of the situation, etc.
When it comes to tax related debts, understanding and dealing with them should always be a priority given the significant collection powers that CRA has. Do not ignore them, tax debts do not go away.
I have met with several individuals lately where CRA has registered a lien on their house. This effectively puts CRA right behind the mortgagor for the proceeds on the sale or refinancing of the house. Once a registration occurs, it cannot simply be removed through a personal bankruptcy (or proposal pursuant to the Bankruptcy & Insolvency Act).
If you have tax debts and having trouble dealing with them, we encourage you to seek help and understand your options. To book a free consultation call us at 519-747-0660 or e-mail us.
I am pleased to announce that we have added more information to the bankruptcy-kitchener.com web site. Check our our new articles on personal bankruptcy in Kitchener and Kitchener’s number one bankruptcy alternative, consumer proposals.
We also have information about the cost of bankruptcy in Kitchener, and how to choose a Kitchener Waterloo Bankruptcy Trustee.
If you want more information about bankruptcy in Kitchener, we encourage you to post an anonymous question to this Kitchener bankruptcy blog, or better yet, e-mail us a question directly for a personal answer. Thanks for reading.
Tagged as bankruptcy Kitchener, personal bankruptcy, and bankruptcy
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This tax season may be a different time than ever before for many people in Kitchener-Waterloo. More people are losing their income through reduced hours or even lost employment is evident with the increase in the unemployment rate. The Kitchener unemployment rate is now over 9%. This global recession and financial crisis is affecting good hard working people. In our Kitchener office - located at 607 King Street, we are seeing a record number of people who are struggling to keep up with their basic household expenses, not to mention their debt payments.
