I’d heard of this company before, in fact I recall seeing ads for their services on US television stations for years, but until today, I had not met with anyone who had dealt with them. Now within 2 hours I’ve seen 2 different people and both were dissatisfied with what had been done by Cambridge Life Solutions.

I wrote about the first gentleman’s experience with Cambridge Life Solutions as soon as we finished our consultation, not realizing that three clients later I’d be listening to the same story again.

The second client, a woman, met with Cambridge Life Solutions in July and had been paying them $600 per month since ($3,000 to date) and was having the same experience as the gentleman I met with earlier. Creditors started calling in September and now they were threatening legal action.

She owes $28,000 and so she is also looking at filing a consumer proposal. Based on her situation she will offer $9,600 ($200 x 48 months) to settle the debt.

Unlike the first fellow I saw that is now “mad as hell”, this woman is embarrassed and feels like someone took advantage of her. She was trying to do the “right thing”, but instead she has probably lost $3,000 that she can’t afford to lose on a solution that was never going to work.

On the bottom of each page of her agreement with Cambridge Life Solutions they list a Customer Excellence Team to deal with concerns complaints. I suggested she give them a call and ask for her money back too… If enough people ask, maybe they’ll figure out that whatever model they were suing in the US may not work in Canada. Based on these two people, it looks like using Cambridge Life Solutions only made matters worse – and cost these poor people an awful lot of money!

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The Office of the Superintendent of Bankruptcy (OSB) has published its statics on Personal Bankruptcies and Consumer Proposals for 2010.

2009 was the big boom for personal insolvencies (bankruptcies and consumer proposal filings).
The noticeable increase however is the number of people filing a Consumer Proposals increased further in 2010.  In the Guelph regions region 689 Consumer Proposals were filed compared to 650 in 2009.  An increase of 6.0%

The graph above shows how the number of Consumer Proposals filed in the region has steadily raised over the last four years.

What this means is that more and more people in Guelph are finding ways to deal with the debt problems they have without filing for a Personal Bankruptcy.

A Consumer Proposal is a simple payment plan where you pay a portion of what you owe (typically 30-40%). This process is negotiated with your creditors (people you owe money to) via your Trustee.  You have 5 years to pay off a consumer proposal and all interest stops.

Advantages of Consumer Proposals

• Avoid bankruptcy
• You negotiate to repay only a portion of your total debts (typically 30-40%)
• Assets do not vest with your trustee (i.e. RESP’s, Home, etc)
• Phone calls stop and all legal actions is prohibited (i.e. wage garnishment)
• Legally less involved than a bankruptcy

If you believe a Consumer Proposal is looking like a good solution for you, then give me a call today on 1-(866) 747-0660 or e-mail me with your details and we’ll be happy to discuss your situation to see if a Consumer Proposal is the right solution for you.

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My name is Adam Rauf and I’m the associate who manages the Guelph office for Hoyes, Michalos and Associates Inc. and I’m currently in the process of becoming a licensed Trustee In Bankruptcy.

The most common question I’m asked is: How much does it cost to go bankrupt?

Unfortunately, this is not a straightforward answer.

There are 4 costs associated with the bankruptcy process (they don’t apply to everyone); the administration fees, tax refunds for the year you file, Assets and finally a complicated thing call “Surplus Income”.

For the majority of people that I see that declare Personal Bankruptcy (versus a consumer proposal), only the administration fees and tax refunds apply (assuming they receive tax refunds).

1. Fees – Most trustee’s will charge anywhere from $160 to $250 per month for every month while you are bankrupt. The cost of administering the bankruptcy depends on how complex your file is. For a large majority of our clients, we charge a standard $200/month for 9 months. Most Trustee firms charge large upfront fees – something we have never done.

2.  Tax Refunds – This is not always a predictable loss, but losing a tax refund can be a strong deterrent to declaring bankruptcy. If you normally get large tax refunds you may want to consider filing a consumer proposal instead of a bankruptcy.

3.  Assets – some assets that are not exempt while you are bankrupt include RESP’s, Stocks/mutual funds, a second vehicle, equity in a house etc. If you have a non-exempt assets that you would like to keep (i.e. a $2000 RESP set up for your kids), then you always have the option of “buying back the asset ”. Essentially you have to pay the Trustee the cash equivalent and you are more than welcome to retain your assets. Here’s a list of exempt assets

4. Surplus Income – While you are in the legal state of bankruptcy you are required to show your income every month to your Trustee. Half of the money you make above the courts guideline has to be paid into the bankruptcy each month. Currently, the limit a single individual is allowed to live on without incurring “Surplus Income” is $1,884/month net (after taxes, medical expenses, child/spousal support payments etc).

If you make $2,084/month net, then you are above the Government guideline by $200, so 50% of that has to be paid which would be $100/month.

Surplus Income is very dynamic and goes up and down with someone’s income. So if you like working a lot of over time or perhaps a second part-time job, you should closely examine a consumer proposal which is essentially a fixed payment plan and does not waiver with your income.

It should be noted that most Trustee firms retain HST tax credits in addition to the above noted expenses, but here at Hoyes, Michalos & Associates Inc. we do not keep your HST cheques.

To find out if a bankruptcy or a consumer proposal is right for you, give me a call in Guelph at 310-PLAN, or e-mail me, and we can discuss your options and arrange a free initial consultation.

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My name is Adam Rauf and I’m the associate who manages the Guelph office for Hoyes, Michalos and Associates Inc. and I’m currently in the process of becoming a licensed Trustee In Bankruptcy.

Without a doubt, a Consumer Proposal is always the most favoured alternative to filing a bankruptcy. Unfortunately, it may not always be financially possible depending on your income.

With the current rules, when you file an assignment in bankruptcy, you’re assigning control of your assets to a trustee for the benefit of your creditors.  These assets also include your tax refunds for the year you file.

If you currently owe money to the government, it’s likely you would not be receiving any tax refunds, but for those of you that are expecting a tax refund it can sometimes be an important consideration to think about in regards to the timing of filing a personal bankruptcy.

Without trying to be to too technical, if you file a personal bankruptcy close to the end of the year, you’ll most likely have to pay for the Ontario Health Premium Tax. Essentially when someone declares bankruptcy we have to split up the year into two tax returns (Jan 1 – date of bankruptcy) and then the second return (date of bankruptcy – Dec 31). It’s on the latter return where the tax system is not very robust and you’ll have to end up paying anywhere from ($300 to $750) depending on your income.

What this means is that December could be a critical month to file a bankruptcy if it’s something you are contemplating rather than waiting until the new year. This is true of single parents with children that can be eligible for large refunds.

The best option to avoid this ugly mess is to consider filing a Consumer Proposal.

If bankruptcy is on your mind and you think you may be eligible to receive a tax refund, call me directly at 310-PLAN or e-mail me to discuss your options. It never hurts to have a face to face conversation and most people find the free consultation to be very helpful.

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My name is Adam Rauf and I’m the associate who works in the Guelph office for Hoyes, Michalos and Associates Inc. and I’m currently in the process of becoming a licensed Trustee In Bankruptcy.

I just spent 3 weeks in India visiting family and friends. India is a beautiful place that will you speechless, frustrated, inspired and above all else, exhausted. Travelling through the busy streets of New Delhi I could not help but observe a unique mixture of an ancient culture starting to amalgamate with Western philosophies. It’s almost saddening and humorous to see everyone on a cell phone, whether it’s a 10 year old child on the way to school or a rickshaw driver whose livelihood depends on his simple bicycle. Aside from the wave of technology that is now dominating South East Asia is the spread of the credit cards and the credit culture. With an increase from 22 million credits to approximately 44 million in use, the credit culture has doubled in the last 3 years. What implications will this have on business in North America?

India is very quickly becoming a strong financial player in the global markets.  If the use of credit becomes too poorly mismanaged and India experiences a credit crisis much like North America, this could very negatively impact the Western economy. Afterall many North American businesses are investing a lot of resources in hoping to expand and tap into the Eastern markets. If consumers in India fail to pay, and business have to undergo extensive restructuring, this would reverberate back to North American business economy. My suggestion to Canadian consumers is to still air on the side of caution. Many analysts say we are through the worst of the economic crisis, but I’m not so sure we are.

As the holiday’s are fast approaching we at Hoyes, Michalos & Associates Inc. always advise people to keep a watchful eye on their budget as 2011 will be unpredictable. We are pleased to report that the vast majority of our clients are choosing to use a Consumer Proposal as an alternative to bankruptcy. A consumer proposal is a monthly payment plan that allows you to pay a portion of your debts over a set period of time. It still provides you with all the same legal protection of a bankruptcy but you have control over your assets and essentially you are enrolling for a simple monthly payment plan.

If you feel that you are in financial trouble and need the help of a licensed professional, do not hesitate to contact us and arrange a free consultation. We’ll sit down with you and make sure you know all the options that are available to you. Please call us directly at 310-PLAN or e-mail me and we’ll get started right away.

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My name is Adam Rauf and I’m the associate who works in the Guelph office for Hoyes, Michalos and Associates Inc. and I’m currently in the process of becoming a licensed Trustee In Bankruptcy.

One of the most common questions I am asked is “If I declare bankruptcy can I keep my house?”

The short answer is yes, you can keep your home if you file for bankruptcy. However there’s one catch: Equity.

Yuo can read more about this on our main website, What Happens to my House in Bankruptcy?

If your house will sell for more than the mortgage owing (after deductions for legal fees, real estate costs and commission fees), the difference will have to be paid into your bankruptcy. For example, if there is $10,000 of realizable equity in your home, then you will be required to pay $10,000 into your bankruptcy estate to keep your home.  You will also be required to keep making your mortgage payments. If there is no equity in your home and you maintain your monthly mortgage payments then filing a bankruptcy should not have an impact on your home.

I met with a married couple recently who lived here in Guelph, and they did have about $10,000 in equity in their home.  They had other debts that they were having trouble paying (he was no longer getting overtime at work), and they couldn’t afford to pay $10,000 up front in a bankruptcy.  They had children, and wanted to keep their home.  In addition to their mortgage payments, they were also paying about $1,200 per month in payments on their other unsecured debts.

I explained their options, and they decided to file a consumer proposal.  Based on their situation (their monthly income, the size of their family, and the value of their home), we were able to offer a proposal to their creditors where they offered $500 per month for 50 months.  The creditors accepted the consumer proposal, and the couple are very happy, because they can afford one monthly payment of $500 to deal with their debts.

Do you have equity in your home, but have other debts?  A consumer proposal may be a solution for you.

To find out if a consumer proposal is right for you, give me a call in Guelph at 310-PLAN, or e-mail me, and we can discuss your options and arrange a no charge initial consultation.   There is hope, so give me a call, and let’s get started.

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A few months ago I met with a woman who filed a Consumer Proposal in our Guelph office at Hoyes, Michalos & Associates Inc. She was going through a difficult period in her life and had to take some time off work for personal health issues. As a result her credit card bills went by the wayside.  She tried her best to keep up with the minimum payments, but when she had to decide between paying her debts or feeding her children, she rightfully made the choice to put her family first. No one should ever sacrifice the well being of their family to try and stop the phone from ringing – which was her primary reason for contacting us

With the collapse of the housing market and the tighter restrictions on financing, many financial institutions are taking quicker steps to rid themselves of overdue accounts by selling them to collection agencies. This woman dealt with a collection agent who called pretending to be a distant relative with a fictitious story that someone in her family was quite ill. The most shocking story I’ve heard is the manager of a quick cash store waiting for someone at their apartment building to try and collect a $300 pay day loan – another reason never to use pay day loan companies.

These organizations receive a commission for any money they collect and they will use extreme and often illegal methods to force a payment from you (regardless of the amount). You can read more on about collection agents on our website.

How do you deal with these pestering, annoying and stressful collection agents?

Option 1 – Talk to the Agency Directly

Try negotiating with them and see if they are willing to work out an affordable payment plan. Unfortunately this is no longer a highly successful method as most companies will give you an ultimatum such as, “we’ll settle for 50% of your debt, but it has to be paid in 10 days.” Even if you owe $1000, trying to come up with $500 at the last minute is not a realistic option.

Option 2 – Ministry of Consumer Affairs

If the calls, harassment and methods for trying to contact you are violating the collection agencies act, then contact the Ministry of Consumer Services and file a complaint. The ministry is responsible for making sure the collection agencies are practicing within the scope of the law.

Option 3 – Discuss your options with a Trustee in Bankruptcy

If the ministry cannot give you the immediate relief you require,then contact a Trustee in Bankruptcy. Your Trustee in Bankruptcy is licensed to administer a Consumer Proposal which is a simple monthly payment plan. A consumer proposal is an offering to pay back a portion of what you owe (typically 30-40% without any further interest and penalties accumulating) over a period of time (maximum of 5 years). It’s a contract that once accepted, gives you protection from your harassing creditors. The phone calls stop and you receive your fresh start.

If a consumer proposal is not the best solution for you, then the alternative may be to consider personal bankruptcy.

Your first step is to pick up the phone and call us toll free at 310-PLAN and arrange for your free initial consultation. Alternatively you can e-mail me any questions or concerns you might have.

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My name is Adam Rauf and I’m the associate who works in the Guelph office for Hoyes, Michalos and Associates Inc. and I’m currently in the process of becoming a licensed Trustee In Bankruptcy.

A few months ago I met with an individual who was debating whether or not he should declare bankruptcy or file a consumer proposal to deal with his debts. His total debts were $50, 000 on credit cards and bank loans.

His income at the time of his decision was low enough that if he  went bankrupt, his bankruptcy would be 9 months long (meaning he would be in the legal state of bankruptcy for 9 months). For some people if their income is too high, the bankruptcy costs more and becomes 21 months in duration.  He fixated on the fact that his bankruptcy would only be 9 months,  even though in bankruptcy he had to make sure he didn’t make too much money because he had to report his income every month and he would also lose his tax refunds – which often times can be quite significant.

In the end he felt bankruptcy was the best solution for him. Both consumer proposals and bankruptcies are legal solutions to debt problems, but a bankruptcy has the potential to become more legally complicated. Part way through his bankruptcy one his creditors (people he owed money to) decided to oppose his discharge – which is in every creditor’s right to do so. So a court hearing was held and this individual had to go in front of a Registrar (think Judge) to explain what happened. The party opposing the discharge explained why they are doing so and gave suggestions to the Court on what should happen before the discharge should be granted. The bankrupt opted to hire a lawyer to represent him, because the Trustee’s role is simply to provide the facts about the bankruptcy. This was quite the negative experience to say the least! The bankrupt ended up receiving his discharge but had to deal with this added, (easily avoidable), stress.

Is there an alternative to Bankruptcy?

Sure there is, it’s called a Consumer Proposal. Simply put, a proposal is an offering to your creditors to pay back a portion of what you owe (typically 30%, with no interest accumulating) over a period of time (5 years is the maximum).

A consumer proposal would have been set for $15, 000 spread over 5 years which equates to $250/month. Considering he was paying $800/month on his debts (barely touching principal), $250 is a great deal!

Creditors have 45 days to vote on the proposal, and every dollar they are owed is a vote in their favour. If 51% of the dollars say yes, the proposal is a legally binding contract for all the parties involved. Once a proposal is accepted, creditor oppositions are not an option and the proposal becomes a simple payment plan to resolve your debts issues (without the nuisance of having to prove your income every month and you get to keep your tax refunds).

This individual knew that if the proposal was accepted by his creditors, he could have made accelerated payments, and the sooner you pay off the proposal, the quicker it’s off your record.

If you think a consumer proposal might be the solution for you, visit us on-line and find out more. Alternatively, feel free to call us directly at 310-PLAN and arrange a free consultation with a professional in your area. There’s no harm in sitting down with one of our trustee’s who can explain all the different options available to you.

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My name is Adam Rauf and I manage the Guelph office for Hoyes, Michalos & Associates Inc.

As an associate (and articling student in the process of becoming a Trustee in Bankruptcy) I meet with clients on a regular basis that are struggling with their debts.

I met with a woman this past week who is going through a very difficult time. She was forced to drop out of her master’s program leaving her thesis undefended due to her medical conditions. Unfortunately she was forced to live off her credit cards and student loans and as a result her debts piled up and she cannot pay her bills as they come due.

She’s hoping to qualify for EI disability so she continue her rehab therapy and resolve her medical issues, which thankfully is showing positive results.

After sitting down with her I discussed all the options available to her, personal bankruptcy, a consumer proposal and even doing nothing.

Doing nothing is a real option for many people. If you are an individual whose sole source of income is Unemployment Insurance, Social Assistance, Ontario Works, Pension Income (government or work pension), your creditors (the people you owe money to) have no legal rights to garnisheeing your wages. The best advice we give is to make sure you bank with an institution you do not owe money to as they could start freezing accounts for any debts they are owed (i.e. credit cards, line of credits etc).

However this still does not stop the stress of phone calls and the collection agencies from harassing you and anyone they might have contact information for.

Thankfully there is always an option for a Consumer Proposal. A consumer Proposal is a legal option to deal with your debts and is quickly becoming Canada’s Number one alternative to bankruptcy.

Simply put, a consumer proposal is an offer that you make to your creditors to pay back a portion of what you owe over a set period of time (no longer than 5 years).  we were able to put together a consumer proposal that included what she would have to buy back for the consumer proposal. The consumer proposal avoids the headaches, stress and legal consequences that someone would experience when filing a second bankruptcy.

If you think a consumer proposal might be the solution for you, visit us on-line and find out more. Alternatively, feel free to call us directly at 310-PLAN and arrange a free consultation with a professional in your area. There’s no harm in sitting down with one of our trustee’s who can explain all the different options available to you.

If even a consumer proposal is more than you can afford, the final option is personal bankruptcy. Bankruptcy discharges your unsecured debts, but there is a cost to bankruptcy, and it will negatively impact your ability to borrow in the future.

If you think a consumer proposal might be the solution for you, visit us on-line and find out more. Alternatively, feel free to call us directly at 310-PLAN and arrange a free consultation with a professional in your area. There’s no harm in sitting down with one of our trustee’s who can explain all the different options available to you.

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My name is Adam Rauf and I manage the Guelph office for Hoyes, Michalos & Associates Inc.

As an associate (and articling student in the process of becoming a Trustee in Bankruptcy) I meet with clients on a regular basis that are struggling with their debts.

I met with a woman this past week who is going through a very difficult financial time. She had worked very hard to try and help her children with their post-secondary education by setting aside close to $30, 000 in RESP’s for her kids. Desperately wanting to preserve the funds for her children, we sat down and looked at her options.  The first question she asked me was:

“How will a bankruptcy affect my RESP’s?”

For anyone unfamiliar with an RESP, it’s basically a special savings plan that is registered by the Government of Canada. You are able to invest the funds and the growth is tax-free. The funds are topped up through the Canada Education Savings Grant and Canada Learning Bond.

If I go bankrupt, why do I lose the RESP for my children?
An RESP is generally held not to be a true trust, and is cashable by the plan-holder. Because the plan holder (usually the parent) can cash out the RESP at any time, the RESP is considered to be an asset of the plan-holder. Therefore, if the plan-holder is bankrupt, the RESP is seized by the Trustee.

In a bankruptcy situation, we would have to collapse the funds, unless she was able to buy back the amount the RESP’s would be worth if they were cashed in today. If you have $30, 000 in RESP’s, the actual amount that would be received would be a lot lower due to service fees, penalties, portions being returned to the Government etc. The actually value of her RESP’s would be closer to $20, 000. So if she wanted to keep the RESP’s going, she would have to come up with the money necessary to match the cash value of the funds (which is quite difficult to do).

Thankfully there was another option – a Consumer Proposal. A consumer Proposal is a legal option to deal with your debts and is quickly becoming Canada’s Number one alternative to bankruptcy.

Simply put, a consumer proposal is an offer that you make to your creditors to pay back a portion of what you owe over a set period of time (no longer than 5 years).  we were able to put together a consumer proposal that included what she would have to buy back for the consumer proposal. The consumer proposal avoids the headaches, stress and legal consequences that someone would experience when filing a second bankruptcy.

If you think a consumer proposal might be the solution for you, visit us on-line and find out more. Alternatively, feel free to call us directly at 310-PLAN and arrange a free consultation with a professional in your area. There’s no harm in sitting down with one of our trustee’s who can explain all the different options available to you.

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