Guelph Ontario Personal Bankruptcy Blog

Will I lose my RRSP if I file Personal Bankruptcy?

noreply@blogger.com (Scott Schaefer, CA) — Mon, 25 Sep 2006 15:38:00 +0000

One common question we receive when we meet with people in our Guelph office is "will I lose my RSP if I file Personal Bankruptcy?" The answer to the question depends on the type of Retirement Savings Plan (RSP) you have, as there are many different types and features available.

First, let's consider if it is in a locked-in account (can also be called Locked In Retirement Accounts or LIRA). This type of RSP is not cashable and can only be drawn from when the person retires. Locked-in RSPs are not cashable by a trustee in bankruptcy. Most locked-in RSPs are created when people leave employers that operate Registered Pension Plans (RPP).

Second, let's discuss what may happen if the RSP is cashable without restrictions by the individual. If it is, we need to look at the underlying investment vehicle for the funds. This is important: if the RSP is invested with a qualified Insurance Company and has a named beneficiary (a grandparent, parent, spouse, child or grandchild), then it may be exempt from seizure in bankruptcy pursuant to the Insurance Act of Ontario.

If the RSP does not fall into one of the above two cases, then it is probably cashable by a trustee in bankruptcy for the general benefit of the creditors. (If a RSP is cashed in by a trustee, then the trustee will prepare a special tax return so that there is not a tax implication to the individual.)

If you are thinking of filing bankruptcy and your RSPs are cashable, you may want to consider filing a consumer proposal (instead of bankruptcy) so that you can keep your RSPs.

If you are experiencing financial difficulty and would like to review your options in greater detail, please call us at 519-823-0330 or e-mail us. We are located at 207 Woolwich Street in Guelph, near the corner of Woolwich and Norfolk.

Guelph Credit Counselling

noreply@blogger.com (Scott Schaefer, CA) — Thu, 13 Jul 2006 21:47:00 +0000

Ted Michalos and myself had lunch today with the credit counsellors of Family Counselling and Support Services for Guelph-Wellington. As noted on the Family Counselling and Support Services for Guelph-Wellington's web-site, they are a non-profit, community based family service agency dedicated to supporting, strengthening and enriching individual, couple and family life by providing counselling, education, support and advocacy services that meet the needs of the community. The agency is a fully accredited member of the Ontario Association of Credit Counselling Services. They are located at 109 Surrey Street East in Guelph.

The credit counselling team includes Meg, Ingrid and Christina. Their credit counselling services are divided into 4 categories:

Assessment - the assessment is of an individual(s) financial situation and followed by a referral and/or counselling
Creditor - negotiation and the administration of debt management plan
Educational - seminars and training sessions
Prevention - information and workshops

To book an appointment, you can call them at 1-519-824-2431. An appointment will be scheduled and the individual will be asked to bring a completed monthly budget and listing of the debts. We request the same information before a consultation as it is essential to understand the debts and budget prior to discussing options and a future plan. Their assessment is consistent with our approach to reviewing the options, including budgeting, debt consolidation, credit counselling, debt management plans, proposals and bankruptcy.

They receive referrals from many agencies in the Guelph area, including other not-for-profit agencies, hospitals, companies' Employee Assistance Programs, etc. But a referral is not required - you can book a meeting for yourself and family. They are a not-for-profit agency and request a payment for the service be made based on the family income and size of the family unit.

We have always been partial to their non-judgmental approach they take with the individuals; they are professional and work towards a solution for that person and their family.

If you have any questions about credit counselling, please contact Family Counselling and Support Services for Guelph-Wellington at 519-824-2431 or via e-mail or Hoyes, Michalos & Associates Inc. in Guelph at 519-310-PLAN or vial e-mail.

Houses and Financial Difficulty

noreply@blogger.com (Scott Schaefer, CA) — Tue, 11 Jul 2006 20:31:00 +0000

Owning a house is a dream many people have and many individuals from Guelph have made that dream a reality in the residential community. But with any home ownership, there are significant costs associated with it - mortgage payments, property taxes, furnishing the rooms, repairs and maintenance, renovations, etc. The cost of the house and upkeep along with other commitments and debt obligations can become unmanageable and some individual explore the options of a consumer proposal or personal bankruptcy in hopes of keeping their home. The option that allows the debtors to keep or protect their house will depend on any potential equity in their house.

Under a personal bankruptcy, the bankrupt individual’s assets vest with the trustee, but the trustee generally will only realize on the assets if there is equity in the property. Therefore, if there is an estimated net loss in the equity calculation using the current market value of the house, then the trustee will not realize on it and the bankrupt may be able to deal with the secured mortgage holders to keep it.

If there is equity in the property, then a personal bankruptcy may not be the logical option to allow the individual to keep their home, but a consumer proposal would. In a consumer proposal, the individuals keep control of their assets. As the real estate market has increased over the past several years, the equity in houses become larger.

If you are experiencing financial difficulty and want to protect your house, then we suggest you contact our Guelph office at 519-310-PLAN or e-mail us a question. We encourage individuals to obtain a market value opinion letter or an appraisal from a real estate agent so that their options can be explored in greater detail.

Change in the Ontario Law Regarding Automobile Exemptions

noreply@blogger.com (Scott Schaefer, CA) — Wed, 28 Jun 2006 17:59:00 +0000

On June 22, 2006, the Ontario Government approved the new Good Government Act. One part of this new legislation is a revision to the rules concerning automobile exemptions under the Ontario Execution Act. This Act outlines what assets are exempt from seizure (i.e. what individuals can keep) in a bankruptcy scenario. The current automobile exemption limit in Ontario is $5,650, but the change in the law deals with automobiles worth more than $5,650.

I will demonstrate the change through an example: a person from Guelph filed personal bankruptcy and one of her assets was a mini-van valued at $6,500 (the van did not have any liens against it). If she had filed personal bankruptcy prior to June 22, 2006, she would have to pay $6,500 to the trustee to keep the car or the trustee would be required to sell the vehicle as the vehicle was greater than the exemption limit.

If she files personal bankruptcy under the new rules, the first $5,650 is exempt and the she could pay the difference of $850 ($6,500-$5,650) to the trustee and keep the vehicle. As the Guelph area only has limited public transit, vehicles can be essential to drive children to school and to get to and from work, therefore this change in the law may help individuals in Guelph with keeping their vehicles in a personal bankruptcy situation.

At Hoyes, Michalos & Associates Inc. in Guelph, Ontario, we review individual's situation and help them develop a plan to deal with their debts and meet future goals, so to discuss your situation in greater detail e-mail us a question or give our Guelph office a call at 519-823-0330 or 310-PLAN to arrange a free consultation.

Related links:
Good Government Act 2006 (see Schedule B Ministry of the Attorney General, Section 6(1) Exection Act)
Ontario Execution Act limits
Ontario Execution Act

Tax problems?

noreply@blogger.com (Scott Schaefer, CA) — Tue, 09 May 2006 19:58:00 +0000

The purpose of this blog is to introduce myself to you; my name is Scott Schaefer. I am a Chartered Accountant and have an income tax background. Currently, I am in the final stages of the trustee in bankruptcy program. I have been working in the insolvency industry since 2002 and have extensive taxation and accounting experience. I work out of the Guelph office as well as handle many of the technical calls that people have.

If you are currently having significant income tax debt problems and want to work out a solution, give our Guelph office a call at 823-0330 or 310-PLAN to arrange a free consultation to discuss your situation in more detail or you can e-mail us a question.

Where are we located?

noreply@blogger.com (Ted Michalos, CA trustee) — Mon, 24 Oct 2005 20:18:00 +0000

Our office is located at 207 Woolwich St. in downtown Guelph, Ontario. It's one of the big old houses that have been converted to office use near the corner of Woolwich and Eramosa. There's free parking behind the building or metered parking on the street.

We're open by appointment only in Guelph - office hours are usually Monday mornings, Tuesday afternoons and Thursday afternoons. Please call to confirm we're in (as opposed to just showing up to drop off a document or paperwork). Given the nature of our work, we're often required to make changes to our office hours on short notice in order to respond to some client-related emergency. I live just south of Guelph (in Aberfoyle) so it's pretty easy to get an evening appointment or even a Saturday, if you need one.

Every month there are approximately 25 people in Guelph and the surrounding area that have to file either bankruptcy or a proposal. We typically handle about 15 of them. There are 3 or 4 other trustees that have offices in Guelph that may also be able to assist you, if you can't reach us.

If you'd like to speak to someone directly give us a call at 823-0330 or 310-PLAN. If you'd prefer to chat by e-mail, that's okay too.

Who are we?

noreply@blogger.com (Ted Michalos, CA trustee) — Mon, 17 Oct 2005 19:49:00 +0000

My name is Ted Michalos and I am one of the founders of Hoyes, Michalos & Associates Inc., trustees in bankruptcy. We operate from a number of offices across Central and Southwestern Ontario - we probably have an office near you.

The firm was opened in 1999. My partner, Doug Hoyes, and I both spent a number of years working for large international accounting firms. What we discovered was that they really weren't set up to deal well with individuals. We decided that in order to properly look after our clients we needed to have offices close to where they live, book appointments outside of normal business hours and make ourselves available to respond personally to their questions and concerns.

In our firm you will never meet with an administrator (unless you ask to)- your appointment will be with a licenced trustee or a professional training to become a trustee. In our Guelph office you will probably be meeting directly with me (as I live just south of Guelph in Aberfoyle). We do this to ensure that your situation is reviewed by an experienced professional. In this way we hope to provide you with the information necessary to make the best decision for yourself and your family.

If you have found your way to this website then you are probably experiencing some sort of financial difficulties. I can't promise that we will solve all of your problems, but I can promise that we will carefully review your situation and provide you with two or three alternatives for you to consider. The one you pick will be the one that you think is right for you.

I can tell you that once you start dealing with the problem, no matter which solution you pick, you will start to feel better. Most of the anxiety caused by finacial difficulties comes from not knowing how to solve the problem - once you've developed a plan you will be back in control and a lot of the anxiety will go away.

Welcome to our new "blog"

noreply@blogger.com (Ted Michalos, CA trustee) — Mon, 03 Oct 2005 13:17:00 +0000

The purpose of this blog is to provide persons living in or near Guelph, Ontario with access to information relating to resolving thier financial difficulties. If you are experiencing problems with debt and would like to know more about credit counseling, proposals or filing bankruptcy you've found the right sight.

If you can't find what you are looking for here, you might try our main site, www.hoyes.com or perhaps www.bankruptcy-canada.ca. Better still, follow the instructions on this page and post an anonymous question to this blog. We can't guarantee that we'll publish your question, but if we think other people might be interested in the answer we probably will.

If you'd like a more personalized approach then I suggest you try this link to e-mail us your querry.

If you are experiencing problems with your finances then I hope what you read here and on our related sites is helpful - the first step on the road to recovery is recognizing that you have a problem. The next step is deciding what to do about it - take the next step and send us your questions. Let's get you started on the road to recovery...