Hi there:

I just wanted to THANK YOU very much for helping me.

It feels good to get this done.

I actually have started to save money (a lot) for me and have that little extra to pay myself.

I greatly appreciate all your help in every way.

The post It feels good to get this done appeared first on Hoyes Michalos and Associates Ontario Personal Bankruptcy Blog.

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Our entire report is available on our joedebtor.ca website, and the report shows that the average person we help is a 43 year old male, and he is getting older.  In 2009 “Joe Debtor” was 41 years old; today he is over 43 years old.

Of course we don’t just help men; 57% of our debtors are male, 43% are female. We also  help people of all ages.  30% of our debtors are between 30 and 39 years of age, and a further 30% are between 40 and 49 years of age.  18% are between 50 and 59 years of age, up from 16% two years ago.

Of particular concern, the percentage of older Canadians (aged 50 and older) rose to 28% of all insolvent debtors, compared to only 24% in our study from 2009 to 2010.

Aging Debtors Taking on More Debt

Here’s the scary part: The typical “Pre-Retirement” debtor aged 50 to 59 is carrying the highest unsecured debt of all age groups: $84,199, an astounding increase of 14% from two years earlier, and 38% higher than the average insolvent debtor.

Why do Pre-Retirement debtors have the highest level of debt?  There are a number of reasons:

Lower Income

Although the majority of debtors in the 50 to 59 age group are working, their income is lower than the 40 to 49 age group.  The average Pre-Retirement debtor has net income of $2,366 per month, as compared to the $2,500 per month earned by the 40 to 49 year old debtor.

Higher Debt to Income Ratio

As income falls and debts increase, it becomes increasingly difficult to service your debts. This drop in income has contributed to pre-retirement insolvent debtors having an unsecured debt-to-income ratio of 297%, the highest among all age groups. Having accumulated debts over a period of time, they can no longer sustain their payments after an unplanned drop in income.

Supporting Children and Parents

It is not unusual for a 50 to 59 year old person to be supporting both their children and their parents.  Thirty percent of Pre-Retirement debtors still have a dependent at home.  This may be a dependent parent, an adult child returning home or  still in school,  or even grandchild. Others are “helping out” children not living at home.

Health Issues

Another issue facing Pre-Retirement debtors is the increased likelihood that they will face an unexpected illness or disability. Pre-Retirement debtors are the most likely to list health reasons as a cause of their insolvency either due to increased medical expenses (for themselves or a family member) or as a result of a drop in income due to early retirement, disability or time off work.

We ask all debtors for the causes of their financial problems, and Pre-Retirement workers are more likely to list job related or health reasons as the primary cause of their bankruptcy.  Here are some examples:

I was unable to find employment since being laid off.

I have been off work for several years due to illness.

One child in post secondary school.  Other child has a disability who we have to care for.

Dealing with debt is a challenge at any age, but it is particularly challenging when you are faced with reduced income, costs to support a family, and medical issues.

Pre-Retirement Debtors Are High Risk Debtors

Pre-Retirement debtors are “squeezed at all ends.”   They are not reducing their debt as they approach retirement, and in fact their debt level is increasing.  Their expenses remain high as they support children and parents and deal with health issues, but they have lower income than younger Canadians.  As a result they use credit to make ends meet, adding to their already high debt load.

They cannot repay their debts and the “house of cards” collapses, leaving them with no alternative but to file a consumer proposal or personal bankruptcy.

At Hoyes Michalos our advice to older debtors is straight-forward: it is unlikely that your debt problems will go away on their own, so we suggest you review your options and deal with your debts now, so that you can move into your retirement years debt free.

The post Joe Debtor: The Aging Face of Personal Debt – Squeezed From All Sides appeared first on Hoyes Michalos and Associates Ontario Personal Bankruptcy Blog.

I want to pass on my thanks to your company and the staff who have assisted me with my Consumer Proposal over the past 3 years.

Everyone has been a pleasure to work with and have made the experience stress free. Each member of staff I have dealt with has performed their role professionally and efficiently.

I have now completed my proposal, but would not hesitate to recommend your company to others looking for help.

The post You made the experience stress free appeared first on Hoyes Michalos and Associates Ontario Personal Bankruptcy Blog.

Under the proposed new rules, companies offering debt settlement services in Ontario will be banned from charging up front fees, total fees will be limited, they will be required to clearly explain what services they are providing, and there will be a 10-day cooling off period to allow consumers to review their agreements.

Doug Hoyes in the 570 News studios

As I stated on the radio, my opinion on this topic probably surprises most people.

I’m a bankruptcy trustee and consumer proposal administrator, so obviously when it makes sense I want to help you file a bankruptcy or consumer proposal.  You may therefore assume that I am in favour of any laws that make it more difficult for my competitors to offer a competing service.

That would be an incorrect assumption.

I believe in competition.  I believe that you, as a consumer, should have access to a full range of services.  I believe you should research your options, and make an informed decision.  I worry that once these new laws are in place, it will be tempting for debtors to say “the government is taking care of me, so I don’t need to worry about reading any contracts I sign, everything will be fine.”  I disagree.  You should research your options, and make an informed decision, and not rely on the government to make the decision for you.

There is no doubt that there are some companies offering debt settlement services that are, in my opinion, not entirely ethical.  They tell you they will help you with your debts, and they charge you a fee each month, but they don’t do anything!  In many cases they don’t contact your creditors until you have all of the settlement money.

Here’s a simple example:

You have $50,000 in debts, and the debt settlement company says they can “settle your debts for 30 cents on the dollar”, or $15,000.  They put you on a $500 per month payment plan, and you assume they are talking to your creditors.  Not necessarily. Often they will wait until they have the entire $15,000, and then they approach your creditors with the deal.  In many cases the creditors will accept the deal.

Why? Because they haven’t seen any money for 30 months!  Unfortunately, in most cases a bank or credit card company won’t just sit around waiting for 30 months; they are more likely to send you to a collection agency, or take you to court and garnishee your wages.  In that circumstance a debt settlement is not a good option.

Does that mean all debt settlement companies are bad? No.  There are cases where debt settlement may be your preferred option.  Here are two examples:

• First, if your debts are old, and you now have access to a lump sum of money, it may be possible for a debt settlement company to negotiate a lump sum cash payment to eliminate your debt.
• Second, if you want to deal with one debt but not another, a debt settlement company may be a good option.  When you file a consumer proposal or bankruptcy we include all of your unsecured debts; we can’t pick and choose (which is generally wise, since you want to eliminate all of your debt, not just some of it).

As I said on the radio, if you have debt, research your options.  I have no objection to you talking to a debt settlement company, a credit counsellor, a mortgage broker, a banker, or a trustee.  Learn and understand all of your options.

All I ask is that you include Hoyes Michalos on your list of options.  We will explain your options, including the costs and benefits, so that you can make an informed decision.

Here’s a prediction: if you talk to us and do your research, you will realize that a consumer proposal is often the best option.  You get full legal protection, your debts are dealt with, the phone calls stop, garnishments stop, and there are no upfront fees.  You pay nothing until your proposal (or bankruptcy) is filed with the government.

I encourage you to research your options, because I know which option you will choose when you have all of the facts.

The post New Debt Settlement Rules in Ontario appeared first on Hoyes Michalos and Associates Ontario Personal Bankruptcy Blog.

I would like to thank everyone for all of their help and assistance during this unfortunate time in my life.

Everyone was extremely helpful and answered all the questions I had.

The people I dealt with were very friendly and went out of their way to help me. I appreciate everything done for me and will recommend you to anyone in the future who is considering bankruptcy.

Thank You!

The post Thanks for your help in this unfortunate time in my life appeared first on Hoyes Michalos and Associates Ontario Personal Bankruptcy Blog.

I would really like to commend Scott Schaefer for his guidance and assistance with the Consumer Proposal process.

His approach is both very knowledgeable and very personable; he made this difficult situation much easier to go through.

Thanks to his help, I feel like my life can finally move forward.

The post Thanks for help with the consumer proposal process appeared first on Hoyes Michalos and Associates Ontario Personal Bankruptcy Blog.

After our meeting they realized there was no need to worry, because I’m not a judge or jury. I’m not here to find fault. My job is to make a plan to help you with your debts, and that’s why Ted Michalos and I started Hoyes Michalos back in 1999. To help you make a plan.

I don’t judge you because I haven’t lived your life; no-one has (except you).  I haven’t suffered through your unique experience with job loss, marriage break up, medical problems, or whatever combination of circumstances has caused you to have more debt than you can handle.  Sometimes, life happens.

My job is to assess your situation, explain all of your options, and then help you make a plan to deal with your debts.  That’s why Hoyes Michalos exists, and that’s why I have trained all of our professionals to do the same: listen, and help you make a plan. (And that’s why our phone number is 310-PLAN, and why we advertise that if you give us 30 minutes, we can explain how to be debt free: Debt Free in 30, It’s That Simple).

I believe our approach works, and to prove it every Wednesday we post a testimonial received from someone we have helped.  These are unsolicited testimonials; we don’t ask for them, or solicit them in any way.  We simply invite the people we help to e-mail Ted and I with their thoughts.  You can read all of them on the Hoyes Michalos Testimonials page.

Here’s one I recently received from Angelo (not his real name), a 44 year old man who got into debt as a result of his separation.  Here’s what he said:

I think all in all it was a good experience. Not good that I had to go bankrupt, but good in a way that I was never made to feel inferior, stupid or what have you. It was a comfortable environment. I was happy I chose this firm. Thanks for all the help. It was appreciated.

As you can see, Angelo wasn’t happy about having debt problems, but we treated him with respect, and he now has his fresh start.  That’s the plan: a fresh start.  I’m glad we could help.

The post Why I Won’t Judge You appeared first on Hoyes Michalos and Associates Ontario Personal Bankruptcy Blog.

I just received the news that my consumer proposal has been accepted.

I can’t express how relieved I am and how elated this ordeal is behind me.

If I had known that the burden of the world could be lifted off my shoulders so quickly and efficiently, I would have engaged your team much sooner. I thank all the London Staff for their work and appreciate the opportunity to start fresh.

The post I am relieved that this ordeal is behind me appeared first on Hoyes Michalos and Associates Ontario Personal Bankruptcy Blog.

A very sincere thank you to all at Hoyes Micholes, in particular Doug Hoyes, who was just so straight forward and helpful in such a traumatic time in my life.

I got through the initial decision to file bankruptcy and with his support I have made a good recovery financially and had a great lesson in dealing with one’s finances.

I feel so confident now.

It truly is a new beginning.

Thank you again.

The post Thank you for your help in such a traumatic time in my life appeared first on Hoyes Michalos and Associates Ontario Personal Bankruptcy Blog.

You can read more about the 2013 Bankruptcy Guidelines on our surplus income payments page, or you can use our surplus income calculator to do the math for you.

Numbers are nice, but what does this mean to you?  Here’s the simple explanation:

If you declare bankruptcy, the more you earn, the more you pay.  It’s that simple.

So, if you are a single parent with one child, you are a family of two, so your surplus income limit is $2,497 per month.  If your net earnings (your income after tax, less child care and medical costs) are $2,897 per month, you are $400 over the limit, so you have $400 of surplus income.

If you are bankrupt you are required to pay half of your surplus income to your creditors, so in this example you would be making a surplus income payment of $200 per month.

If your income goes up, you pay more.  If your income goes down, you pay less.

If you are considering bankruptcy, you should estimate your income during the bankruptcy period, so you can estimate your surplus income and therefore the cost of your bankruptcy.  If you get a bonus, or work overtime at certain times during the year, or if you get laid off for part of the year those factors will influence your surplus income.

If you expect your income to increase and you are worried that you may pay a lot in surplus income, you could consider a consumer proposal as an alternative to bankruptcy.  We negotiate a settlement with your creditors up front, so if your income increases later your payments don’t increase.

Which option is best for you?  Give us a call at 310-PLAN (310-7526, no area code required) or e-mail us and one of our professionals will calculate your options and help you decide which option is best for you.

The post New Surplus Income Limits for 2013 appeared first on Hoyes Michalos and Associates Ontario Personal Bankruptcy Blog.