It won’t be just the cold weather we will remember in Cambridge

I was working in my Cambridge bankruptcy office today and I had to make a deposit at the bank, so I walked from our office on George Street down Main Street and over the bridge over the Grand River (thankfully they have finally finished the construction on the bridge). As I left my office at around 1:30 pm it was about -8 degrees and sunny; cold, but a perfect day for a quick walk to the bank, since the wind wasn’t blowing.

As I walked over the bridge over the Grand River and looked down, I was surprised to see foot prints across the river. The Grand River was frozen all the way across. Some brave sole had managed to walk, through the snow, from one side of the river to the other. I’m sure the river has frozen over before, but since I moved to Cambridge in 1997 I don’t remember ever seeing the River completely frozen. Obviously January 2009 has been a very cold month.

Unfortunately when we look back on early 2009 I don’t think it will be the cold weather we will remember, or the fact that the river was frozen. I think it will be sad state of the economy that will be uppermost in our minds.

When I got back to the office I met with a lady who works in the automotive industry. Her hours have been cut back, and she can’t pay her bills. Yesterday I heard the same story from a long-time Toyota worker. There is no overtime anymore, so it’s harder to make ends meet.

What’s the solution? I give everyone the same advice: make a plan now. You may be able to cut your expenses and pay off your debts on your own. Perhaps you can get a debt consolidation loan. Perhaps you need to file a consumer proposal or go bankrupt. The solution will depend on your individual circumstances, which is why I strongly encourage you to give our Cambridge office a call at 519-622-3773 or 310-PLAN, or e-mail me, and we will explain your options, and then book a time for us to meet to go through your options in more detail.

I can’t do anything about the weather, but I can explain your options, but only if you call and get the process started, because with financial problems waiting is almost never the correct solution.

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by Douglas Hoyes on January 27, 2009

Strategies for Dealing with Credit Card Debt

On Saturday January 17 Ted Michalos and I appeared 570 News to talk about how to deal with credit card debt. Our Cambridge office gets a lot of phone calls after the Christmas season from people with more credit card debt than they can deal with, so I always welcome the opportunity to go on the radio and answer questions about how to deal with credit card debt.

On the show I was asked how to deal with credit cards and other debts. The advice I gave on the show was the same as the advice I give when I met with people privately in my Cambridge office.

First, you must make a list of all of your debts, and prepare a simple monthly budget. By making a list of everything you spend each month, it’s easier to see what expenses can be chopped, which is the first step to getting back on track financially. For many people cutting expenses is enough to free up cash so that they can pay their debts on their own. If you can’t cut enough expenses to increase your cash flow to pay off your debts, the next possible solution is credit counselling.

With credit counselling a not-for-profit credit counsellor creates a debt management plan where you repay all of your debts, at a reduced or zero interest rate.

Of course one option is to file personal bankruptcy. However most people I meet with in Cambridge want to explore all options before considering bankruptcy, so I always mention filing a consumer proposal, which is often the best strategy for dealing with credit card debt. A consumer proposal is a deal, or a settlement, that is negotiated with your creditors. If you have $50,000 in debt, it may be possible to negotiate a settlement where the creditors accept 50 cents on the dollar, or $25,000, over up to a five year period. For example, a proposal of $500 per month for 50 months would be accepted in most cases by the creditors. In some cases it’s possible to get proposals accepted for 30 cents on the dollar, or even lower, depending on your monthly income.

As I said on the show, there are options, so to find out what option is best for you, give us a call at 310-PLAN (310-7526), no area code required, or e-mail me to schedule a free initial consultation.

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by Douglas Hoyes on January 17, 2009

Talking on TV About Debt

On November 8, 2008 I appeared as a guest on the ProvinceWide television show. The show was a panel discussion about Your Money, Your Future, and I was one of the guests giving tips and advice about how to deal with debt in these difficult times. You can watch my segment on this ProvinceWide link.

My advice on the show was the same as the advice I give to Cambridge residents every day: First, reduce your debt, and second, have a plan to deal with your debt.

I talked on the show about consumer proposals and personal bankruptcy. Proposals and bankruptcy are not your only options; you may be able to deal with your problems on your own, or with the help of a credit counsellor. Regardless of the possible solutions, I emphasized on the show that you need a plan NOW. Even if you are already drowning in debt, it is still possible to make a plan to deal with your debts.

Please give my office in Cambridge a call at 519-622-3773, or 310-PLAN, or e-mail me, and together we will explore your options and make a plan to deal with your debts.

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by Douglas Hoyes on November 10, 2008

Talking on The Radio About the Economic Crisis

Today Ted Michalos and I appeared live for an hour long call in show on 570 News. We discussed a very timely topic: How to Survive the Economic Crisis. I expressed the opinion that the world has changed. Today it’s much harder to lease a car or get a mortgage. Even worse, if you already have debt, you probably are not getting the overtime or bonuses at work you were getting a year or two ago, and that makes it even harder to service your debt.

I gave some tips on How To Reduce Your Debt, and I explained that debt is dangerous in tough economic times. If you get laid off or have your hours cut back at work, Employment Insurance will probably be enough to cover your rent and help you buy groceries, but it won’t be enough to cover payments on credit cards and bank loans. That’s why it’s important to reduce debt now, before your financial situation gets worse.

But what do you do if your situation is already bad? I’ve met with a number of Cambridge residents over the last few weeks who have more debt than they can handle, and don’t know what to do. They don’t qualify for a debt consolidation loan, and they can’t afford credit counselling. That leaves two final options: a consumer proposal or personal bankruptcy.

Which option is right for you? As I told the callers on the radio show, the answer for you depends on your situation: your monthly income and expenses, what you own, and who you owe. Fortunately, we can help. Give our Cambridge office a call at 519-622-3773 or 310-PLAN (that’s 310-7526, no area code required), or e-mail us to arrange for a no-charge initial consultation; we will walk you through your options, and you will then have a plan to deal with your debts, and get a fresh start.

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by Douglas Hoyes on October 25, 2008

A Second Opinion About Bankruptcy in Cambridge

Last week Howard Hayes and I met with a man in our Cambridge bankruptcy office. He had met with a clerk at another trustee’s office, and was confused about his options. Before we talked about options to deal with his financial problems, he wanted to know if we were different than the other trustees in Cambridge.

I explained that all trustees are licensed by the federal government, so we are all required to follow the same rules. However, if you visit us in Cambridge, you will meet with two people: Howard Hayes, who manages our Cambridge office, and me, Douglas Hoyes, the trustee responsible for our Cambridge office (and the founder of Hoyes, Michalos & Associates Inc., the largest firm in Canada dealing exclusively with personal insolvency; we don’t do bankruptcies for corporations, or audits or tax work like the national accounting firms).

In other words, the difference is our people. You meet with senior, experienced people, not administrative clerks.

This man was pleased that Howard and I took the time to listen to him so we could understand his situation, and he was happy that we didn’t just talk about personal bankruptcy in Cambridge. We covered all of his options, including debt consolidation, credit counselling, and consumer proposals. With all of this information, it was easy for him to make a decision.

Whether you need a first or second opinion, please call our Cambridge office at 519-622-3773 or 310-PLAN, or e-mail us, and let’s get started on a plan to help you deal with your debts.

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by Douglas Hoyes on October 20, 2008

How to Survive the Recession in Cambridge

Over the last few weeks I have noticed an increasing level of pessimism in many of the people I meet in my Cambridge bankruptcy office. Many people are realizing that as the real estate market softens, it’s harder to refinance your house to raise cash to pay off debts. Many people are also worried about what’s happening in the stock market, as they see their RRSP’s declining, which may significantly delay their retirement.

The worst problem I’m seeing these days is a decline in confidence. People are worried about losing their jobs, and not being able to provide for their families. In these uncertain times, my number one rule is simple:

Get out of debt.

If you can reduce or eliminate your debt, you have the flexibility to survive this economic crisis. I’ve summarized it in our article on the Five Tips to Survive the Economic Crisis.

If you can’t deal with your debt on your own, a consumer proposal or a personal bankruptcy may be necessary to eliminate your debt permanently. To learn more, call our Cambridge office at 519-622-3773 or 310-PLAN, or e-mail me, and let’s work out a plan to eliminate your debt and help you and your family survive this recession.

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by Douglas Hoyes on October 10, 2008

House, Debt, and Consumer Proposals in Cambridge

I met with a married couple last week, with a very common story.

Ten years ago they bought a house. Like many newly married couples they used their credit cards to furnish the house, and to buy things for their growing family. Five years ago they owed $30,000 on their credit cards.

Fortunately for them, their house had increased in value, so they were able to refinance their mortgage, borrow an additional $30,000, and pay off their credit cards.

Unfortunately they continued to spend more than they were earning, and ended up with more credit card debt. Fortunately for them, two years ago their house had continued to increase in value, and they were able to refinance once again, and pay off their credit cards.

They were using their house as though it was an ATM machine, dispensing cash when they needed.

When I first met with them a few months ago, they were somewhat depressed. Over the last year their hours at work were cut back, and they were again using credit cards to survive. They approached their bank, again, and were shocked to learn that they could not borrow any more money against their house. Over the last few months their house had actually declined in value, and with their reduced incomes the bank would not lend them any more money.

What could they do? I suggested a number of options.

First, they could sell their house and rent. Their was still a small amount of equity in their house, and they could use that money to pay down some of their debt. They decided that it was best for their family to remain in their neighbourhood, and renting would cost almost as much as owning, and selling the house would not generate enough money to repay all of their debts, so they decided against selling.

Since we already knew they could not refinance, and since they did not want to go bankrupt, we decided that a consumer proposal was the correct option.

We worked out a budget so that we knew what they could afford to pay each month. We ended up filing a consumer proposal where they will be paying $400 per month for the next five years (although they can pay it off faster with no penalties if they want to). In total they will be paying $24,000, even though their total debts (not including the mortgage) were almost $50,000.

Their creditors are happy, because they know that in a bankruptcy they would only get about $10,000 from the house, and this couple is happy because they know they can afford one monthly payment of $400, and they can keep their house.

I am seeing an increasing number of people in Cambridge who have used the equity in their house to help with their debts in the past; as that becomes more difficult, a consumer proposal may be the answer. If you think a consumer proposal may work for you, please call my office in Cambridge at 519-622-3773, or e-mail me to set up a free initial consultation, and I’ll help you work out a solution that’s right for you.

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by Douglas Hoyes on September 22, 2008

Will I lose my house because of my money problems?

Douglas Hoyes

One of the most common topics I have discussed with people in my Cambridge bankruptcy office over the last few months (and years) is real estate in Cambridge, Ontario.

The real estate market has dropped, in some cases significantly, during the first half of 2008, and the real estate agents I talk to believe it will continue to decline over the balance of 2008. There are many reasons for this, including an over-heated market, and the fact that the price of gas is a lot higher than it was in 2007, so many people who live in Cambridge but work in Mississauga or Toronto have decided to sell their homes in Cambridge to move closer to where they work, which depresses prices.

What happens if you own a house and have more debt than you can handle? You have a number of options.

First, you can sell your house. If you have equity in your house (equity is the money left over when you sell your house and pay the real estate commissions, legal fees, and repay your mortgage) you can use that equity to repay your other debts, such as credit cards. Of course by selling your house you must now find a place to rent, so it’s a big financial decision.

When discussing real estate, the most common question I am asked is Will I lose my house if I file for bankruptcy in Cambridge? The answer depends on the value of your house, and a number of other factors.

Second, i t is possible to keep your house, even if you have financial problems. For many, a consumer proposals in Cambridge is a bankruptcy alternative. In a consumer proposal, we make a deal with your creditors, based on the equity in your house, and your ability to make a monthly payment. I would be happy to meet with you to explain this further.

Here’s how I advise people to make their decision:

If you have equity in your house, but a lot of other debts, you should consider selling your house now and using the money to repay your debts. Even if you only have $25,000 in equity in your house and $50,000 in debts, we could do a lump sum consumer proposal where we offer the creditors the proceeds from the sale of your house, and in return they forgive the balance of your debts. If house prices continue to decline, selling your house now may be the most logical decision.

Of course selling the family home is a very difficult decision. If you like your area, and if your children are established with their friends and in school, moving is very difficult. However, it may be possible to find a place to rent in your area, so your children can continue going to the same school, and still see all of their friends.

You have to ask yourself this question: Would my family and I be better off renting with a lot less debt, or should we stay in our house and keep paying the mortgage, property taxes, utilities, upkeep, and all of our other debts?

No-one wants to sell their house, but in some cases it’s the best financial decision.

Either way, this is a very difficult and emotional decision. Over the years I have helped hundreds of Cambridge residents analyze their options. I won’t tell you what to do. Only you can make the decision about your future. But I will help you understand all of the options, and understand the implications of your decision.

I won’t judge you; I’ll just help you.

For your free initial consultation, or if you just want to talk on the phone, please call my Cambridge office at 519-622-3773 or 310-PLAN, or e-mail me a question and my staff will set up a meeting so that I can personally review your situation, and help you decide on the best option for dealing with your house, and all of your debts.

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by Douglas Hoyes on July 19, 2008

Can Debt Make You Sick?

Douglas Hoyes - Cambridge Bankruptcy Trustee

Douglas Hoyes, Trustee

 

Can debt make you sick?

In a poll released by CNN today, it appears that debt can make you physically sick.

According to the results of the survey, when people are dealing with mountains of debt, they are much more likely to report health problems. The health problems are not just problems sleeping; they can also be severe ailments like ulcers, severe depression, and even heart attacks.

The results of the survey don’t surprise me. Even though the survey was done in the United States, it could just has easily have been done here in Cambridge, Ontario. Over the years I have met with hundreds of people who are burdened by the stress caused by their debts.

For many people, the stress gets to be so great that they can’t work, and of course not working makes the debt problems even worse.

Fortunately, there are options available. You do not need to suffer alone.

Some people benefit from credit counselling. In Cambridge you can contact Anthony Benedetto via the Family Counselling Centre of Cambridge and North Dumfries web site, or by phone here in Cambridge at 519-621-5090 Ext 260. Anthony will meet with you and help you decide how to deal with your debt.

Of course you can also call Howard Hayes or me, Douglas Hoyes, here in our Cambridge office at 519-622-3773. We will review your situation and help you decide whether or not a consumer proposal or a personal bankruptcy in Cambridge is the right answer for you.

My point is this: yes, debt is very stressful, but you do not need to suffer alone. There are options, so give us a call our Cambridge office at 519-622-3773 or 310-PLAN, or e-mail me your question and let’s get started.

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by Douglas Hoyes on June 9, 2008

Is Bankruptcy Bad?

Douglas HoyesAbout once every month or two someone I meet with in my Cambridge bankruptcy office who asks me a simple question:

Is it bad to file bankruptcy?

They then go on to say that they borrowed the money, and they feel bad about going bankrupt.

My answer is this: bankruptcy is neither good or bad. It is a legal process that discharges your debts, but it carries with it some obligations and repercussions. I believe a better question is this: What will happen if you don’t go bankrupt?

If the answer is that your creditors will take you to court, sue you, and start to garnishee your wages, and if as a result of that you will be unable to pay your rent and buy groceries, then bankruptcy is probably a better option. On the other hand, if you can repay your debts on your own, than for you bankruptcy is probably not a good option.

When I meet with you I will talk about bankruptcy, but I will also discuss consumer proposals in Cambridge as an alternative to filing bankruptcy. We will talk about other possible solutions, like a debt consolidation loan, or credit counselling in Cambridge. After reviewing all of your options you will be able to decide whether bankruptcy is "good" or "bad" for you.

Note that I said that you will decide. Filing bankruptcy is a very personal decision; I’ll provide you with the facts, but you will make the decision, so to arrange for a free initial consultation, please call my Cambridge office at 519-622-3773 or 310-PLAN, or e-mail me a question and my staff will set up a meeting so that I can personally review your situation, and help you decide on the best option for resolving your financial difficulties.

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by Douglas Hoyes on March 24, 2008

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