I was interviewed today on Global News in a story about Cambridge Life Solutions. Also interviewed were Laurie Campbell, Chief Executive Office of Credit Canada Debt Solutions, and Jorge Fortune, the President of Cambridge Life Solutions (I’d link to him, but I can’t find him on the Cambridge Life Solutions website).

You can watch the Credit Fixers report by Sean O’Shea on the Global TV website. (You can also watch an interview I did on CHCH TV on the same topic today).

After watching the broadcast, I was wondering why the President of a large company doesn’t appear on his own company website?

In fact, I can’t find any employees names on their website.  That’s strange.

A Google search for Jorge Fortune shows this page that lists him as an entrepreneur in Irvine, California, related to something called generationecho.com

That’s interesting, because the Branch Manager for Cambridge Life in Toronto is Philip M. Allopenna, who is also the Co-Founder, President, GenerationEcho, and is located in Irvine, California.

Interesting.

Oh well, perhaps they both worked together at the same company in Irvine, California, and then moved up here to help us Canadians deal with our debt.

I’ll keep my eyes open, and report back if I learn more information.  For now, here’s a link to our stories on Cambridge Life Solutions.

UPDATE: I stand corrected.  Mr. Fortune’s name does appear on their website, in this blog post he did in response to the Cambridge Life Solutions Global TV interview with Sean O’Shea.  I suggested you go read it now.  Mr. Fortune makes some interesting points.

First, he says that he was just contacted that day to do the interview.  Sean O’Shea called my office at 11:44 am on Tuesday morning to ask me to do an interview at 3:00 pm; I didn’t have any advance warning either.

Second, he says:

At 1:45 minutes into the video a consumer proposal trustee states clients receive collections calls. Our clients are well informed that they are going to receive collection calls during their program. We don’t hide this from consumers. It is told to them when they inquire about our services, in our enrollment package, in their compliance call they complete and all over our website. Even client testimonials talk about receiving creditor calls – however our own clients state the creditor calls were a small price to pay considering the savings Cambridge Life Solutions was able to provide them. Plus most of our clients simply let them go to voicemail.

Interesting.  Most of our clients simply let them go to voicemail. When you file a consumer proposal with Hoyes, Michalos, we are required, by law, to contact all creditors within 5 days of signing the paperwork, and we tell you to answer the phone calls and give the creditors our name and number so we can talk to them.  The phone calls stop.  We would never tell you to simply “let the calls go to voicemail.”

Finally, he says:

They stated Mr. Fortune wouldn’t release success rates. What they failed to mention or keep in the story they did is that consumer proposal and credit counselling agencies ALSO do not release success rates of their programs.

Also untrue.  I can tell you exactly what our success rates are on consumer proposals:

Proposals can last for up to five years, so you have to go back to proposals we filed more than five years ago to determine true success rates.  Of the consumer proposals we filed in 2005, 76.8% were successfully completed.  For 2006 our success rate was 75.7%.  For the first few months of 2007 our success rate is 74.6%.

Note that by success rate I mean the proposal was accepted by the creditors, and the debtor completed all payments.

Creditors accept 92% of all proposals we file as filed, and they further accept another 7% with amendments (meaning they ask for more money).  That’s a 99% acceptance rate; only 1% of the proposals we file are rejected by the creditors.

Over to you, Mr. Fortune.  What is your success rate?

Doug Hoyes interviewed on CBC Radio from his desk in Cambridge

This morning I was interviewed by Anna Maria Tremonti on The Current, on CBC Radio One.  The Current is a radio show aired nationally across Canada, and I did the interview sitting at my desk here in Cambridge, Ontario. Instead of the telephone, CBC radio uses Skype, so I plugged my microphone into my computer, put on my headset, and did the interview.

I was asked on the show as a bankruptcy expert to comment on a recent study by an economist who said that the way we measure debt is deceiving, and it could be argued that our debt problems are not as bad as we think.

I won’t get into the mathematical argument, but here’s a brief summary of what I said:

Debt is manageable when times are good, like now, when interest rates are low.  But if something goes wrong, like you lose your job, or get injured or sick and can’t work, or you get divorced, debt becomes a series problem.  Debt becomes a ticking time bomb.

Here’s the math example I used on the show: if you have a $200,000 mortgage, and the interest rate goes up by 1%, you might not think 1% is very much, but a 1% interest rate increase increases your monthly payment by about $200.

How would a $200 per month expense increase impact you?  If you have lots of free cash each month, it’s no big deal, but if you are living paycheque to paycheque it can put a serious dent in your monthly cash flow.

My advice: do what you can to reduce your debt, whether it’s a mortgage, a car loan, or high interest debts like credit cards.

If you have more debt than you can handle, give me a call in Cambridge at 519-622-3773 or e-mail me and we’ll meet to explore your options.

If you want to hear my comments on the radio today, you can find them on the CBC Radio Website (my segment starts at the 8 minute mark).

On September 29, 2011 I posted the results of my detailed investigation of Cambridge Life Solutions, a company that advertises heavily on the radio, in an article titled Cambridge Life Solutions: Who Are They?

Cambridge Life Solutions - Letter to Doug Hoyes from Lawyer

On January 27, 2012 I received a fax from Fasken Martineau DuMoulin LLP (the letter is reproduced on the left; double click for a full size view). For those of you who are not familiar with Faskens, according to their website:

Fasken Martineau is one of the world’s leading international business law and litigation firms. With over 675 lawyers, the firm has offices in Canada, the United Kingdom, France and South Africa. Our practice includes every sector of business, industry and government.

Wow. I don’t think I’ve ever received a letter from a law firm that has 675 lawyers! The letter is written by Peter A. Downard, who, according to his profile on his firm’s website:

… is senior litigation counsel and principal Toronto contact for Fasken Martineau defamation matters. Peter has extensive experience as defamation counsel in litigation at trial, in the Court of Appeal for Ontario, and in the Supreme Court of Canada, as well as in numerous mediations and advisory matters. He is author of the legal text Libel (Second Edition, 2010; First Edition, 2003), referred to as an authority on libel law in numerous court decisions; sole author of the volume Defamation in Halsbury’s Laws of Canada (2009); and a Lexpert leading practitioner in defamation.

Wow again. I don’t think I’ve ever received a letter from a senior lawyer who has written textbooks and appeared before the Supreme Court of Canada!

It get’s better. Apparently this massive Bay Street law firm is accusing me of libel! Here’s the first paragraph of their letter to me:

We are counsel to Cambridge Life Solutions Inc. (“CSLI”). We have been consulted regarding an article libelous of CLSI entitled “Cambridge Life Solutions: Who Are They?” that you have published on the Internet at http://www.bankruptcy-cambridge.ca/2011/09/27/cambridge-life-solutions-who-are-they/ .

Wow. Apparently they are upset because in my article I alleged that Cambridge Life Solutions Inc. did not appear to have any staff in Ontario, or perhaps even in Canada. Why did I think that? Because on September 1, 2011 when one of my staff paid a visit to their Toronto office, at 1 Yonge Street, their name did not appear on the directory in the lobby, and when we asked the receptionist at the Execushare offices where they rent space she said “no, they aren’t here” without even needing to consult her schedule or make a phone call. When we asked if they would be back after lunch, again, she said no, they won’t be here. We therefore concluded that they weren’t there.

The lawyer was writing to advise me that in fact:

CLSI’s Vancouver and Toronto offices are both staffed by full-time employees during regular business hours. The lobby directory at 1 Yonge Street in Toronto in fact refers to CLSI’s offices in the building.

Interesting. When we took the picture on September 1, 2011 they weren’t on the directory. To check it out, we returned last week, and sure enough their name now does appear on the directory in the lobby. When we asked to meet with one of their employees (who are there during regular business hours) we were met by a very pleasant gentleman, Mr. Philip M. Allopenna, the Branch Manager, Ontario.

Obviously things have changed since my original post, so I have edited my original post to acknowledge that Cambridge Life Solutions does have an office, with their name on the directory, and they do have at least one full time employee.

I stand corrected.

I haven’t been able to find out much about Mr. Philip M. Allopenna, the Branch Manager, Ontario. I can’t find mention of him anywhere on the Cambridge Life Solutions website, which is strange; we have all of our senior people listed on our hoyes.com website. In fact, the only person’s name on their website is Alan Thicke, their spokesperson. (I wish I made enough money to be able to afford a famous actor as our spokesman. Oh well, I think it’s probably better that my partner Ted Michalos and I do all of our commercials ourselves. But I digress).

When I did a Google search for Mr. Philip M. Allopenna, all I can find is this LinkedIn page, which states that he is a “Results-driven entrepreneurial leader” based in Orange County, California.

Of course this might be a different Philip M. Allopenna, I’m not sure. This one is also the Co-Founder and President of GenerationEcho. Apparently GenerationEcho.com is “a social platform that empowers people to connect and share their need, hardship or cause while locating and providing information, support and fundraising.” Sounds like a great organization. I’m impressed that he can run that company in California while also serving as the Branch Manager for Ontario for Cambridge Life Solutions.

But again I digress. Here’s my point:

I posted an article four months ago with information that was correct at that time (Cambridge Life Solutions’ name was not on the lobby directory). Since that time they have put their name on the directory, and they now have at least one employee. The information on my original post was therefore out of date, so I have updated it.

Here’s a question for you: if I wrote an article about you stating some facts, and those facts changed, what would you do? Would you call me or e-mail me and say “hey, Doug, the facts have changed, please update them?” Or would you go hire a huge Bay Street law firm with 675 lawyers to send me a letter, by fax and courier, accusing me of libel?

Apparently Cambridge Life Solutions prefers the “hire a lawyer from a big law firm” approach. Mr. Downard ends his letter by saying that if I don’t intend to remove the article from the Internet, “please have your legal counsel contact me directly.”

My legal counsel? I’m not some big firm that has enough money to hire Alan Thicke and Bay Street lawyers! I’m a bankruptcy trustee with an office in Cambridge, Ontario that started a firm a dozen years ago to help people with debt. I don’t have fancy “legal counsel” that can “contact him directly”. So, instead, I sent him an e-mail on February 2, 2012 that said:

Dear Mr. Downard:

I am in receipt of your fax dated January 27, 2012 regarding Cambridge Life Solutions Inc., and the article I wrote about them on my website. The facts that were stated in my article were accurate at the time of writing. Thank you for pointing out to me that the facts have changed. I have posted revisions to my original article to update the new facts.

I first became aware of Cambridge Life Solutions last summer, when a number of people in financial difficulty asked my firm to help them deal with their debts. These people advised me that they had heard the Cambridge Life Solutions ads on the radio, and they had hired Cambridge Life Solutions to deal with their debts. Unfortunately many of them did not fully understand the concept of “debt negotiation”. They followed the program and, after paying Cambridge Life Solutions initial fees, began saving money to make a debt settlement as suggested. Unfortunately many of them, after a few months in the program, realized that until they had saved up sufficient funds to propose the settlement, the creditors would continue calling, and in many cases commence legal action. For those people the Cambridge Life Solutions solution was not a solution at all. It simply lead to more stress, and money spent on fees that did not deal with the problem.

It was to provide a full explanation of the options to the Canadian public that lead me to write the article, and I believe it has helped many people understand all of their debt management options.

In the future, if your client believes that I am not aware of new facts, please advise them to simply pick up the phone, or send me an e-mail, and I would be happy to discuss their concerns.

As of today I have not received a response from the lawyer, but I suspect this is not the end to the story, so stay tuned.

Today I’m going to let you in on a secret: there’s an easy way to budget.

Are you surprised?  Are you one of those people who believe that budgeting is very complicated?  If you are, you’re not alone.

Most people I meet with here in my Cambridge bankruptcy office, when I ask them what they spend each month, have trouble telling me exact numbers.  They know what they spend on rent or mortgage payments, but beyond that, the numbers are a little fuzzy.  Why?  Because they don’t have a household budget.  When I ask them why they don’t have a budget, they tell me:

• it’s too hard to budget
• it takes too much time
• they don’t know how to work a spreadsheet
• their spouse pays all of the bills

Those are all valid reasons, but if you don’t know where your money goes, how can you make a plan to get out of debt?  So today I’ll tell you the secret to budgeting the easy way:

Don’t budget.

Simple as that.  Don’t budget.  Instead, pay your bills as often as you get paid.  If you get paid every week, split your hydro, gas, cable, phone and other bills into weekly amounts, and pay one quarter of your bill each week, on payday, through internet banking.

To learn more, you can read my report on The Secret to Making a Budget, or you can watch these two short videos for all of the details.

The Secret to Budgeting, Part 1:

The Secret to Budgeting, Part 2:

If you have so much debt that budgeting won’t help, give my office a call in Cambridge at 519-622-3773, or e-mail me, and we’ll discuss all of your debt management options.

There is a common perception that there’s really no difference between a consumer proposal and filing personal bankruptcy, and in some respects that’s true.  Both consumer proposals and bankruptcy:

• stop wage garnishments;
• stop collection calls;
• deal with your debts, and
• give you a fresh start.

On your credit report perfect credit is an “R1″, a consumer proposal is an “R7″, and a personal bankruptcy is an “R9″, so from a credit report point of view a consumer proposal is a bit better, but they aren’t significantly different.  So why would someone choose to file a consumer proposal instead of a bankruptcy?

The number one reason for filing a consumer proposal is certainty.  Once your proposal is accepted by your creditors, you know exactly what you are required to pay.  You keep your assets, including your tax refund, so you know exactly what deal you have made to deal with your debts.

With a bankruptcy the amount you pay can change with your income.  If your surplus income increases, you pay more, and your bankruptcy could be extended for a year.  What you thought would be a simple 9 month bankruptcy with small payments could become a 21 month bankruptcy with higher payments if your income increases.If you have relatively low income and you don’t expect it to increase, and if you don’t own any assets or expect a tax refund, bankruptcy may still be a viable option.  However, if there’s a chance your income may increase, or you may be getting a tax refund, a consumer proposal may be worth considering.

More importantly, if you want to know exactly what you will be required to pay each month a consumer proposal is often the best solution.For more information, here’s my video on what bankruptcy is, recorded live at 570News:

Here’s another live segment where Ted Michalos and I discuss the differences between a consumer proposal and bankruptcy:

So yes, there is a difference between a consumer proposal and a bankruptcy: certainty.  If you want to know what you will be paying each month, a consumer proposal may be the correct option for you.

There is a common myth that you shouldn’t go see a bankruptcy trustee, like me, because the trustee “works for the creditors” (the people you owe money to).  Instead, according to the ads I hear on the radio and TV, you should go see a “debt consultant”, because they work for you.  That’s ridiculous, for two reasons.

First, the debt consultant may not be working for you.  Mostly likely they are working for themselves.  Many debt consultants charge you a fee, and then send you to see a trustee.  There is no point in paying someone a fee to refer you to a trustee.  If you want to talk to a trustee, talk to one!  You can phone my office in Cambridge at 519-622-3773 and book a free consultation.

Second, I don’t “work” for the creditors.  When you file bankruptcy in Canada I’m appointed by the court to administer your bankruptcy.  I don’t work for the creditors, and technically I don’t work for you either.  I’m the “middle man”, and my job is to make sure all parties follow the rules (both you and the creditors).

If I worked for the creditors would I be stopping garnishments as soon as you file bankruptcy or a consumer proposal?

Obviously not.

It’s a myth that a bankruptcy trustee in Canada works for the creditors.

I discussed this on a recent appearance on 570 News; here’s the video with a complete explanation:

NOTE: This post was originally published on September 27, 2011. Updated information was added on February 1, 2012 as noted below (updates appear in italics).

Who are these Cambridge Debt Solutions guys? That’s a question I’ve heard a lot lately from people meeting with me in my Cambridge bankruptcy and consumer proposal office. They advertise a lot on the radio, so I decided to check them out.

I started with a visit to the Cambridge Life Solutions website. I clicked on their Better Business Bureau link and it says that “this business is not BBB accredited”, which seemed strange to me (why would you put a link on your website if it doesn’t go anywhere?).

February 1, 2012 update: according to the Cambridge Life Solutions website, in a post dated January 3, 2012, “Cambridge Life Solutions is proud to announce that the BBB has given us an “A-” rating. Cambridge Life Solutions is very confident upon accreditation that our rating may become an “A+”.”

(For the record, here’s the link to the Hoyes Michalos Cambridge Office listing at the Better Business Bureau; we are rated A+).

Then I looked at their Debt Options page. They listed lots of options, like doing nothing or getting a debt consolidation loan, but they didn’t mention filing a consumer proposal. I found it strange that they wouldn’t list one of the most powerful options open to consumers today.

(For the record, here’s the link to the Hoyes Michalos main website where we list debt management options).

I kept digging, and arrived at their FAQ page.

One of the questions is “Can my creditors pursue litigation against me?”, and the answer is, in a debt settlement, “yes”.

(For the record, if you file bankruptcy or a consumer proposal you get legal protection, so your unsecured creditors, like credit cards, bank loans, and income taxes cannot sue you).

Another one of the questions is “will creditors keep calling me?”. They answer that:

Once a creditor has been notified by Cambridge that we have been given permission to communicate with them and see the limited power of attorney we have to communicate and arrange settlements on behalf of your enrolled debts only they will be notified to only contact you via mail. The law clearly defines this in The Business Practises & Consumer Protection Act, Section 116, Subsections 4(a)(i) and 4 (a)(ii)

I’ve been in this business for about 25 years, but I had never heard of the “Business Practises & Consumer Protection Act”, so I googled it, and discovered that this is legislation in British Columbia. It doesn’t apply in Ontario, and certainly not in Cambridge, Ontario.

Strange that a company advertising as “Cambridge” is not in Cambridge, Ontario, or even in Ontario. Sure enough, on the Contact Us page they list an office at 1100 – 1200 West 73rd Ave., Vancouver, British Columbia. Obviously that’s not in Ontario. In fact, it’s hard to see how big the office is, because it appears that that office is an “Execushare” type office, where anyone can rent a room. There’s nothing wrong with that; many new businesses rent smaller space to start; it’s just surprising that they can have lots of staff in a small office like that.

Even stranger, when they issued a press release in July they listed their address as Cambridge Life Solutions, 2416 Main Street, Suite 398 Vancouver, British Columbia, which, according to Google Maps, is a post office box!

View Larger Map

Again, it’s not illegal to use a post office box as your main mailing address, but it is strange. It makes me wonder where all of their staff are? They do list a “U.S. Enrollment Centre”, so perhaps all of their staff are in California?

(For the record, at Hoyes Michalos I have about 60 people working for me; that’s how many people it takes to talk to creditors and negotiate settlements in consumer proposals, and to give us the staff to meet with people in person across Ontario).

Fortunately they do list an Ontario address, at 1 Yonge Street in Toronto. I know the building well; it happens to be the Toronto Star building.

I asked one of my Toronto office team members to pay them a visit. Here’s the picture they took of the office directory on September 1, 2011:

1 Yonge Street, 18th Floor, Office Directory

Here’s a close up of the “C’s”, with Cambridge nowhere to be found.

Cambridge Directory - Close Up View

Surprisingly, Cambridge Life Solution’s name doesn’t appear anywhere on the directory. The 18th floor is another Executive Office arrangement, where many businesses can rent rooms or offices and share a receptionist. When we asked the receptionist if they were in, she said “no” without even looking at a schedule, which leads me to believe that they are very rarely ever there.

Cambridge Life Solutions Directory Listing - February 1, 2012

UPDATE: I am posting this update on February 1, 2012.  We paid another visit to 1 Yonge Street in Toronto, and the directory sign now does contain Cambridge Life Solutions’ name.  

When we asked the receptionist if we could talk to someone from Cambridge Life Solutions she said “of course”, and a pleasant gentleman by the name of Philip M. Allopenna introduced himself.  According to his business card he is the Branch Manager for Ontario.

I am therefore happy to report that in fact since my previous investigation Cambridge Life Solutions now has an office that is staffed with people here in Ontario.

I was still curious as to what exactly Cambridge Life Solutions does, so I went back to the internet, and went to the Ontario government’s Ministry of Consumer Services website, and on the Consumer Protection Branch page I did a search for Cambridge Life Solutions and I discovered that Cambridge Life Solutions Negotiation Services, is actually CLS Negotiation Services Inc., and they are actually a collection agency!

Wow! Why would a company that helps you negotiate a debt settlement register themselves as a collection agency? Isn’t a collection agency someone who collects debt?

Again, maybe it’s not a big deal. At least they are registered with the government, which gives them some credibility. To find out more, I reviewed the Collection Agencies Act of Ontario, which regulates all collection agents. Paragraph 1 states that:

“collection agency” means a person other than a collector who obtains or arranges for payment of money owing to another person, or who holds out to the public as providing such a service or any person who sells or offers to sell forms or letters represented to be a collection system or scheme;

That makes sense. Anyone who “arranges for payment of money owing to another person” is a collection agency, so on that basis, Cambridge Life Solutions is a collection agency.

Section 12.2.a of the Collection Agency Regulations says:

(2) No person shall be registered as a collector unless the person,

(a) is an individual who is a Canadian citizen or has been lawfully admitted to Canada for permanent residence and who is ordinarily resident in Canada.

I have no idea how many employees they have in Canada, but you must have Canadian employees to legally negotiate debt settlements in Canada.  It appears from their website that at least some of their debt negotiation work is done from California.  That’s fine.  They have Canadian employees, so that’s perfectly legal.  Here’s my question for you:

Do you want to deal with a company in California? Or would you prefer to deal with someone local?

So, what’s my conclusion?

First, Cambridge Life Solutions has nothing to do with the city of Cambridge, Ontario.  They are not located in Cambridge, Ontario.

Second, before you hire anyone to do any work for you, check them out. Ask your friends for a referral. Check out their web site, or their Better Business Bureau listing. Find out how they are regulated.

Third, ask where their debt negotiators are located. Even if you don’t want to deal with me or my firm, there’s lots of expertise here in Cambridge, and throughout Ontario; you can find someone local.

Finally, before you hire anyone to deal with your debt problems, meet with them.  Do your research.  Talk to them on the phone.  Talk to my competitors on the phone.  Visit their websites.  But before you agree to part with your hard earned money, have a face to face meeting with your advisor.  Look them in the eye, and decide whether or not they are who you want to use to best represent your interests.

(Obviously I’m biased.  I have about 60 team members working at 20 offices across Ontario; we will meet with you in person, and we will meet with you at least twice before we will let you sign anything, or pay anything.  You alone will decide when and how we proceed.  You will get no high pressure over the phone sales tactics from any member of my team).

There are solutions to debt problems, but the best solution often involves dealing with a competent, honest professional.

Here’s a video of me, Doug Hoyes and Ted Michalos discussing Debt Consultants:

And here’s a follow up post to this one, posted on February 6, 2012, where Cambridge Life Solutions Accuses Doug Hoyes of Writing a Libelous Article.

Here’s a link to the Global TV investigative report on May 1, 2012 on Cambridge Life Solutions on Global TV.

This Saturday, for the first time ever, you’ll be able to “see” me on the radio. I’ll be doing a one hour live radio show on 570 News, and the video will be broadcast live on the internet.

Doug Hoyes on 570 News

On Saturday September 24 from 1:05 pm to 2:00 pm Ted Michalos and Doug Hoyes will be appearing live on 570 News, and we’re going to spend the entire hour talking about Debt Myths.

You can participate in many ways. You can:

• Listen on the radio to 570 News;
• Listen on the internet, at 570News.com (just click the Listen Live button);
• Watch and listen to the video feed; go to 570News.com and click on the 570 News Webcast link;
• During the show you can e-mail us a question, and my office will relay it to the studio; or
• Send me a Tweet on Twitter @doughoyes and I’ll try to respond on air, time permitting.

If you want to learn more about how to deal with debt (or if you’re just curious to see what it looks like to “watch” a radio show), please join us this Saturday after the 1:00 pm news on 570 News for our inside look at Debts Myths.

The Office of the Superintendent of Bankruptcy today released statistics for the number of insolvency filings in Canada in for the period ending June 30, 2011. As I often do (in my articles on past Cambridge bankruptcy statistics), I’ve analyzed the statistics for the city of Cambridge, and I present the total number of filings, by postal code, on this postal code map.

Not surprisingly, the largest residential areas also have the largest number of filings.

For the first six months of 2011, residents of Cambridge filed 161 personal bankruptcies, and 150 consumer proposals, for total filings of 311. That compares to 208 bankruptcies and 141 proposals, for a total of 349 filings for the first six months of 2010.

In percentage terms, that’s a decrease of 23% in personal bankruptcies, but an increase of 6% in consumer proposal filings. Overall, that’s a decrease of 11% in total filings.

What does this mean in Cambridge? Two items of note:

First, overall filings are down, which is good news for Cambridge residents. That indicates that the Cambridge economy was somewhat improved in 2011 as compared to 2010.

Second, the fact that bankruptcies are down but consumer proposals are up is also good news. Consumer proposals are filed by people who have an income and want to pay something towards their debts, but just can’t afford to pay the full amount owing. People who are unemployed don’t have the income to file a proposal. So, if consumer proposals are increasing, that’s generally good news for the economy.

If you are interested in statistics for the rest of Canada, you can see these links to bankruptcy Canada statistics, and Canada consumer proposals statistics.

For now, the news for Cambridge is good. Of course, only time will tell if the economy continues to improve, or if we move back into a recession.

Last week I met with three people in a row in my Cambridge bankruptcy and consumer proposal office, and they all asked me the same question: what will happen to my co-signer if I go bankrupt?  My answer?

It depends.

First, it depends on whether or not the loan they co-signed for continues to get paid.  For example, if your father co-signed your mortgage for you, and you are keeping your house and continuing to pay your mortgage, there generally won’t be any issues for your co-signer if you file a consumer proposal or bankruptcy.

However, if your friend or family member co-signed your line of credit, or if they had a joint credit card with you, then they have a problem.

When you go bankrupt the bank can’t pursue you for the debt, but because your co-signer didn’t go bankrupt, they can go after your co-signer.

When someone tells me they had someone co-sign on one of their loans, my advice is always the same: talk to them, now.

If you decide to go bankrupt they will find out anyway (when the bank calls asking why the loan wasn’t paid), so you are better off giving them a “heads up” now, so they can prepare.  If they have good credit, they may simply ask the bank to switch the loan to their name, and they will continue paying it (which won’t harm their credit report).  If they have bad credit, they may need to consider a proposal or bankruptcy as well.

Either way, be proactive so that you can have a plan in place before you decide to go bankrupt.