Bankruptcy London Ontario:
The Norma Yau Bankruptcy Blog

A very small article in the London Free Press a few weeks ago caught my eye. It indicated that according to a poll conducted by BMO Nesbitt Burns, this year almost half of Canadians who receive a tax refund plan on using it to pay down credit card or other debts.

Almost half of Canadians with a tax refund. That is a lot of money being put down against debt that is owed.

Now a tax refund could come about because you are getting too much tax taken off, you are supporting a number of family members, or your income has dropped to the extent that you paid too much income tax on the total income earned over the year.

But it also indicates that a lot of people have a lot of debt that they are finding it hard to make the monthly payments, or that they need monies from somewhere other than monthly income to help pay their debt.

Are you in this situation? Do you find yourself waiting anxiously for that tax refund each year to help pay down some of your credit card balances so that the minimum payments become manageable again? Do you need to pay off a ‘don’t pay for a year’ loan that you received to buy furniture or appliances? Do you struggle with the decision to spend or not spend your tax refund?

If yes, then it may be it is time to look at the whole situation instead of just putting a band-aid on it so you can carry on the same way for a little longer.

At Hoyes, Michalos we will review your financial situation by looking at who and how much you owe to your various creditors, what assets you have and if they have any value that is in danger of being seized by the creditors, and what your income and expenses can allow you to offer to pay back to the creditors. We discuss options like bankruptcy, consumer proposals, Debt Management Plans or maybe even refinancing, although we only do bankruptcies and consumer proposals if that is the right solution for you. But the initial consultation is free and from that appointment you will be able to make a choice that suits your situation and your budget.

If you are going to use or have just used a tax refund to pay down debt and are finding that it has not helped as much as you expected, call us today at 310-PLAN or 519-435-1500 or email us for that free consultation. We will help you find the solution that will help plan for a better financial future with less stress so that tax refund might be used for something more pleasant in future years.

You think that if you could just have a bit of cash now you could make it to the next pay day.  And where can you get that cash?

Most people find ads on the internet or see the places when they are passing by them.  You all know the names of the pay day loan companies (I won’t mention them here); they all have “Money” or “Cash” or “Loan” in their names, so all of their names sound very familiar.

Here’s how they work: you sign paperwork that says you will borrow from them an amount of money to be paid back at your next pay date.  They charge interest, and a fee for the borrowing and for the processing of the money.

Most of these places charge so many fees that the repayment amount is usually much greater than the amount borrowed.  And they are very happy to let you borrow the same amount or a greater amount the next time in order to make payments because you don’t have the money once you are paying them back. Under Ontario law they can’t keep turning over your loan, so in practice you borrow from Place #1, then next week get a loan from Place #2 to repay them, then borrow from Place #3 to repay Place #2. Then it’s back to Place #1 to repay Place #2, and the cycle continues.

And it keeps on going – borrow, repay, borrow, repay – always in increasing amounts.

The Ontario government passed legislation in 2009 that in effect says you do not have to pay more than $21 per $100 borrowed.  Previously the charges would have meant payments of anywhere from $30 to $60 on $100 borrowed.

But think about this:  $21 paid back (plus the principal of $100) on $100 borrowed is like paying 21%.  And if you don’t pay them back immediately there will be late charges and other processing charges so the actual rate could be still much higher than 21%. And that 21% is an “annual” rate; if you pay the loan back in two weeks, the annual interest rate is obviously significantly higher.

Can you afford to pay that much for a short term loan?  Will you be able from your next pay cheque be able to pay them back plus the extra amount they need (remember the $21 per $100 borrowed) plus the amounts you need to pay to other places from that next pay cheque?

If not, maybe borrowing from them is not the answer to your money problems.  Maybe calling or emailing us to set up a free consultation to talk about more options is the answer.  Yes, maybe the answer will be a bankruptcy, but it could be a consumer proposal or a Debt Management Plan.

Instead of getting on the merry-go-round of payday loans, call us today at 310-PLAN, and we will help you develop a solution to your money problems, and give you a fresh start.

My name is Joel Sandwith, and I work here in London with Norma Yau, and today I’ve got a tip: If you want to get ahead financially, in many cases you need to start small, and work your way up. Here’s an idea: Next time you break a $20 bill for a coffee, parking, or any other small expense, track what happens to the change.

Do this a few times, then review your spending. Are you happy with where the money went? I bet the more you do this, the longer the change will stay in your pocket.
We read and hear a lot about the idea of saving the cost of a “latte a day” – I don’t know anyone who drinks latte, but I do know a lot of people who buy a coffee everyday, or more than one. Is the coffee a problem? Maybe, maybe not.

Losing track of $18 change from a $20 bill is, without a doubt.

The idea here is that you may feel like you have a mountain to move financially, but really it’s just a pile of rocks. We know you can’t move the mountain, but if you start with the small rocks and work your way up, you might be able to slowly shift that pile where it needs to be.

Starting small is a good idea in a lot of areas. For example, in golf, to practice putting, the wise move is to start with two foot putts, knock a few in, get confident in your putt, and slowly move farther away.
In managing money day to day, we often overlook the small stuff and worry about the big stuff. You can’t change your rent overnight, but saving $20 a week in small expenses can add up to over $1,000 a year. If you applied that $1,000 against your debts, you could save hundreds of dollars in interest. Not bad for small change!

So, next time you take $20 out of a bank machine, enjoy the coffee, but ask yourself with every use of that money: is this helping me accomplish my financial goals, or not?

If one of your goals is to reduce your debt, give our London office a call at (519) 435-1500, or 310-PLAN, or e-mail us for more information. Or research your options like filing bankruptcy in Canada, or filing a consumer proposal, and then call us for more information.

With Christmas time fast-approaching, you may or may not be worried about the impact having to buy gifts for all your friends and family is going to impact your wallet.  Even the most responsible budgeters may forget to include an extra cushion for Christmas in their regular monthly budget throughout the rest of the year and others may be just trying to make ends meet.  Regardless of your situation, if you have not been putting aside money throughout the year and have been spending everything you earn, it is going to be very difficult for you to purchase the gifts you would like to for your family.

The pressure to appear generous, and the fact that many people enjoy giving gifts to their loved ones means that Christmas time is one of the most dangerous times of year in terms of people using their credit cards and spending beyond their means.  Make sure that you are not making your Christmas budget by completely relying on your credit cards.  Procrastinating and saying you will pay them off in the New Year is very dangerous because you just don’t know what is going to happen in the future.  Maybe your company will not be able to give you the usual Christmas bonus or your car is about to break down.  Relying on money that you don’t have is never a good idea.

Remember that the best gift is not always the most expensive gift.  Somebody might appreciate a gift that comes from the heart more than the most expensive thing on their list.  Your family and friends would probably rather see you spend within your means than buy them something you cannot afford and end up in serious financial trouble.

If you have already over spent on Christmas gifts and are now unable to make the minimum payment on your credit card bills and you would like to find out about ways you can clear your debts, you may want to talk to a bankruptcy trustee.  Call me today at 310-PLAN, or call my London office at (519) 435-1500, or send me an e-mail and I will be happy to speak with you about your options.

This attitude has been suggested to consumers over the past few years through subtle advertising.  As well as the message “I AM ENTITLED TO HAVE IT NOW”.  Advertisements told us about low monthly payments, not the cost of financing or the total cost of acquiring that lovely new car or TV set or vacation.

Well, we are finding out that having it all now and thinking we are entitled to have it all comes at a cost.  Credit has been used to fund the purchases of “all” and now the bill is coming due.  People are losing jobs and don’t have enough money to pay the credit card and loan minimum amounts.  Monthly mortgage payments are more than someone can afford on a reduced paycheque.   Jobs are scarce and EI is running out, so income will be reduced even more.
Here is an example of how expensive it can be to use a credit card to finance a purchase:

• $5,000 purchase taking 3 years at 18.8% to pay off
• that would total $6,579.72 in payments
• you would need to earn (prior to paying taxes of about 25%) $8,772.96 to make those payments over the 3 years

Do you have that much income before deductions to give to the credit card company? Probably not.

What can you do?

First you can cut up the credit cards so they won’t be used further.  Then you can review your budget to see how much money you can cut from various expenses such as gas for your car, meals eaten out in restaurants, vacations, gifts.

If there still is not enough money to cover the minimum payments to the credit cards and loans, you may be required to do a Debt Management Plan with a credit counseling agency or a consumer proposal or personal bankruptcy with a trustee such as ourselves.   We meet with people to help them with the steps described above.  We discuss the various options that are available and how they work.  We help you develop a plan to get you back on the right track to saving money to fund your purchases instead of using credit.

If you need help with your financial situation, give us a call today at 310-PLAN, or call my London office at (519) 435-1500, or send me an e-mail and let’s get started.

I sometimes hear from people who have taken jobs that require them to live and work outside of the country for a year or two. When they become burdened by their debt and want to pay it off, they wonder whether they can still file for bankruptcy in Canada.

The Bankruptcy and Insolvency Act states that in order to file bankruptcy in Canada, your debts must have been incurred in Canada and you have to have resided in Canada within the past year (before you file the bankruptcy).  Also, if you don’t live in Canada, you must at least own property here even if you do not usually live in it.  If you meet all these requirements, you may be able to file bankruptcy in Canada.

No matter where you are living, if you do file a bankruptcy with a Canadian bankruptcy trustee, it is very important that you disclose all of your debts and assets regardless of where they are.  So, if you have a house in Florida and some American credit cards, it is important that you tell the trustee this because it could affect your situation. One thing to keep in mind is that even if you are able to file bankruptcy in Canada but are living elsewhere, there are certain duties you will be required to perform and being out of the country may make it more difficult.

For example, you may need to attend Canadian court (you definitely will if this is not your first bankruptcy), so if you cannot make a trip to Canada, filing a bankruptcy here may not be the right option for you.

If you would like to find out if you can file bankruptcy in Canada, contact Hoyes, Michalos & Associates at 310-PLAN and one of our professionals will be happy to give you the information you need.  If you would like to speak to a bankruptcy attorney in the United States, visit bankruptcy america to learn about bankruptcy in the United States.

A young person’s graduation from College or University is one of the most important rites of passage in our society.  They have received their degrees and are now qualified for jobs in the industries they have chosen.  We shake their hands and send them off into the world where they expect to get a great job, pay off their student loans, buy a home and be independent.  This is what the world has promised them as they spent the past few years of their lives living in run-down apartments, eating nothing but Kraft Dinner because it is $1.09 per box and still gathering debt to pay for their tuition and books.

The Canadians most plagued by debt are the young ones.  They have gathered student loans in order to pay for education they believe they will need in order to get a job and have the lifestyle their parents provided them with.  Upon graduation however, many young adults are unable to find work in their chosen field, and if they do, it often does not pay well.  They expect to live the kind of lifestyle their parents did while forgetting that their parents worked hard for twenty years in order to achieve it.  Trying to pay off student loans while covering cell phone bills and credit card debt from a card they got from a vendor in their student center with a free gift, means that young people can very quickly find themselves in serious financial trouble, unable to pay their minimum living expenses while also servicing their debts.  If you are one of these young people, you may be wondering what you can do.

There are ways that you can get rid of your debts.  You can find out more by callin my London office at (519) 435-1500, or send me an e-mail and speak to one of our professionals about your situation.  It may be that you are able to file a consumer proposal or personal bankruptcy to get rid of your debts or even student loans debts if they are more than seven years old.  Let us help you find a way to get a fresh start for your independence.

Everybody knows that we live in a consumer culture where people often feel their worth is determined by the amount of money they have and what nice things they can buy with it.  Money is spent on products people don’t need but want because it will help them to appear wealthier to others.  Everybody wants the best car, the nicest linens and the fanciest home décor.  Sometimes it slips our minds that on top of wanting to buy only the best for ourselves so that we seem wealthy, we also want to give things to other people that make us seem both rich and generous.

The problem is that sometimes people don’t have the means to do this but they do anyway.

It does not help that we are constantly bombarded with advertisements that make us think we need to spend more money than we have.  A good example is the Mastercard priceless commercials everyone knows that says memories are priceless… but to get them, you need to spend some money but can with your Mastercard credit card!

In order to achieve our priceless memories or to be perceived as very generous by our friends and family, we use credit cards to purchase gifts.  The problem is that many people forget how quickly these credit cards add up and then suddenly find they cannot make their minimum monthly payments.  If this has happened to you and you would like to find a way to get rid of your debts, call me 310-PLAN, or call my London office at (519) 435-1500, or send me an e-mail .  I can look over your finances and help you to decide what would be the best way for your debts to be cleared.

A ray of light in a dark economic time

An economic recession has already hit London, Ontario.  A recession hits everybody’s wallets hard and more people will need to rely on borrowing money to get by.

During a recession, all companies and their employees are affected.  Working hours are cut and people may be laid-off because their companies can no longer afford to pay everyone.  It is likely that your income will be affected by the company you work for cutting costs and you will need to take a close look at your financial situation so that you will be able to survive through this difficult time.

Here are a few important signs that you are in financial trouble:

• A lot of your money is going toward paying your debts
• You have lost track of exactly how much debt you have
• You are making just the minimum payments on credit cards and lines of credit
• Your savings have been depleted to service your debt or to cover basic living costs
• You are using credit to pay for consumables such as groceries and gasoline and you are at or near the limits on your credit cards
• You have started to receive calls from credit collectors

If any of these are true for you, you may be in serious financial trouble.  At Hoyes, Michalos & Associates, we can review your situation and options with you to determine how you can get a fresh start free of debt.  Call us today at 310-PLAN and we will help you get started on a plan to get back on your feet financially so that you will be able to come out of a recession on top of your finances!

When you are experiencing financial problems and are having trouble making your minimum monthly payments, and then another unexpected cost comes up, a lot of people rely on pay-day loan companies.  They will loan you the money you need until your next paycheque, when you will pay it back.  It sounds alright, but these companies tend to charge very high interest rates, so it might not be the best option.

For example, if a pay-day loan company is going to charge you a 350% interest rate (if you add up the interest you would pay if you had a loan for entire year) whereas your credit card is 25%, as bad as it sounds, it might make more sense to max out your credit card before you go to a pay-day loan company.

A common thought about pay-day loan companies is that they are taking advantage of the lowest-income people who cannot get good jobs, but actually, these are people who are well-educated and are employed full time.  They have just run into life circumstances that are making it difficult to cover their expenses.  Some pay-day loan companies say those who take advantage are not operating under what they call ‘best practice’ rules.  These rules state for example, that no loan should go over $1,500, that they cannot have your assets assigned to the loan as security, and the term of the loan cannot exceed 31 days.

In order to prevent people from being taken advantage of, the province of Ontario has implemented legislation to regulate payday loan companies. Even with more regulation, pay-day loan companies will continue to be a problem.  They will still charge huge interest rates and there is danger in that people may come to rely on these regularly to get through the month.  Sometimes, once people have used a loan service once and found it helped them, they will get into a habit of borrowing and significant amounts of their money will go toward interest payments rather than toward getting back on top of their finances.

If you are having trouble making your monthly payments and are continuously borrowing from high-interest lenders like pay-day loan companies, you may be in more serious financial trouble that you think.  Before you continue to waste more money on 350% interest rates, give me a call to talk about filing a a consumer proposal or personal bankruptcy to get rid of your debts and get a fresh start.  Call Hoyes, Michalos & Associates today at 310-PLAN, or call my London office at (519) 435-1500, or send me an e-mail and we can arrange to meet and look over your finances and help you make a plan to get out of financial trouble.