Kitchener Ontario Personal Bankruptcy Blog: October 2009: Answers to Personal Bankruptcy Questions

Posted on Sunday, October 25, 2009

How do I stop a wage garnishee?

That is one of the most common questions that I hear in our Kitchener bankruptcy offices.

First off, let's make sure that we are speaking the same language. A garnishee is a court order to take a portion of your pay cheque. It happens when a creditor (someone you owe money to) takes you to court because you have not paid the money that you owe. A judge reviews the case and grants an order for your employer to withhold a portion of your pay cheque until the debt is paid in full. The normal amount is 20% of your gross wages, but the judge can order up to 50% to be taken. If your finances are already feeling strained, a wage garnishment can be the proverbial last straw.

Once a wage garnishment has started, it's probably too late to work out an informal payment plan. Think one in the hand compared to two in the bush.

Here are the three ways to stop a wage garnishment once it has started:

Pay the debt in full
File a consumer proposal
File a personal bankruptcy

When you file a consumer proposal or personal bankruptcy, you are protected by the laws of the Bankruptcy Insolvency Act. It's called a "stay of proceedings." That means that, in most cases, a wage garnishment would stop.

If you are concerned about a wage garnishment and want to better understand your options, your first step is to contact a licensed trustee in bankruptcy. You can contact us by telephone at 310-PLAN or 1-866-747-0660. You can also reach us by e-mail.

Posted on Thursday, October 22, 2009

Payday Loans in Bankruptcy

Question from a reader: I have been looking at your website and all the valuable info on it, considering contacting you. I have bad credit, outstanding debt and am caught up in the vicious payday loan cycle. Are payday loans something you deal with?

Answer: The short answer is yes; now here's the explanation.

When somebody contacts our office because they are having difficulty handling their debt load, there are a number of options that we will review. The two options that you need a trustee for are a consumer proposal and personal bankruptcy. Either of these is a way of dealing with all of your unsecured debt. Unsecured debt includes credit cards, personal loans, lines of credit, income taxes AND payday loans.

Consumer proposals and personal bankruptcies follow the laws of the Bankruptcy Insolvency Act. One of the principles of this system is to give the honest but unfortunate debtor a fresh start. One of the other key principles is to ensure that the creditors are treated fairly and equally. That means that for you to get a fresh start, your creditors can't choose not to participate.

Posted on Wednesday, October 07, 2009

Name Change for Waterloo Region Credit Counselling Agency

Mosaic Counselling and Family Services offers counselling services for a wide variety of issues including stress, anxiety, grief, depression, troubled relationships and family violence. Until very recently, it was known as the Catholic Family Counselling Centre. It is an organization rich in history and tradition of community service and support.

In meeting with citizens of Kitchener-Waterloo regarding their bankruptcy questions, it is the credit counselling services of Mosaic that I have become most familiar with. One of the options that I discuss with people as an alternative to personal bankruptcy or a consumer proposal is called a debt management plan, for which you would require the services of a credit counsellor licensed by the Ontario Association of Credit Counselling Services.

If you are experiencing financial difficulty and are not sure where to turn, please feel free to call me at 310-PLAN or 519-747-0660. I can also be reached by e-mail. We will talk about your options, including, perhaps, a visit with the credit counsellors at Mosaic Counselling and Family Services.

Posted on Saturday, October 03, 2009

Your Financial Questions Not Answered by Economic Statistics

Over breakfast earlier this week, a Canadian Press article in the business section of the Waterloo Region Record caught my eye. The article was reporting on the results of a survey conducted by TD Canada Trust regarding personal finances: saving, budgeting, etc. I won't get into all the statistics. Look here for the complete story.

Here are some general comments. The Record article notes that 19% of respondents age 18 to 34 save 10% to 25% of their monthly income. However, 54% of the respondents from the same age group report that they have a "rainy day fund." My immediate thought was to question just what these people consider a "rainy day fund" if most are saving less than 10% of their income.

What really struck me, though, was how this simple story was adding to the seemingly endless stream of conflicting statistics being reported in the media regarding personal finances and the economy. Here's a sample:

- Recession is over
- Unemployment is up
- Inflation rate is down
- Personal bankruptcies are being filed at a record rate
- Stock exchanges are up, now they're down, now they're back up again (you can check any paper over the span of a few days to see this one)

What does all of this mean to you if you are struggling to make ends meet? I always say to people that the financial questions that matter most are your own. Statistics don't pay the rent, buy groceries or clothe your children.

If your head is swimming with facts and figures, sit down and take a deep breath. In uncertain times, we are all forced to examine our priorities. If you have considered filing a personal bankruptcy or consumer proposal, feel free to give me a call at 310-PLAN or 519-747-0660 to review your options. You can also contact me by e-mail with your Kitchener bankruptcy questions.