The Billy Martell Bankruptcy Hamilton Blog

As reported in the Hamilton Spectator this morning, The Office of the Superintendent of Bankruptcy released statistics that show the total number of personal bankruptcies and consumer proposals filed in the Hamilton area has declined by more than 14% in the last three months.

The statistics for the second quarter of this year show that 908 consumers either filed a personal bankruptcy or consumer proposal which is down from 1,060 for the same period last year.

More specifically, there were 553 personal bankruptcies filed in the Hamilton area which is down from 729 and there were 355 consumer proposals filed, up from 331 last year. Combined, this accounts for an overall decline of 14.3% over the same period last year.

The decline in personal bankruptcies gave rise to consumer proposals which is not surprising given the changes made to the rules last September which make filing a bankruptcy more complicated and more expensive than in the past. The effects of the rule changes have made people reconsider filing a bankruptcy and opting to file a consumer proposal instead. This is good news because it means more people in Hamilton are choosing to negotiate a settlement with their creditors in order to avoid filing a bankruptcy.

Will this trend continue? I believe we may see it continue for a short time but as my colleague, Doug Hoyes, commented in the article we have not yet felt the ripple effect of the new Harmonized Sales Tax which was introduced in July. The new tax has driven up the prices of some goods and services in which only the GST previously applied to. This caused many consumers to make big ticket purchases in the months leading up the new tax and the effect of this is just starting to filter through the economy. The impact could see reduced production from the manufacturers as sales start to decline which could lead to job losses forcing individuals to consider restructuring by way of filing a personal bankruptcy.

If you find yourself faced with a layoff or you are living pay cheque to pay cheque due to a rise in interest rates or increased living expenses due to the HST, and you have a lot of debt, the time to take action is now. Look at your budget and see if you can cut some of your expenses and use the extra money to pay down your debt. If that’s not enough to solve your problems, you should consider getting some professional help and finding out about your options including credit counselling, filing personal bankruptcy or consumer proposal.

Want to find out more? Please email me or call my office in Hamilton at 905-777-0770 or 310-PLAN and Wendy, Sue or I would be happy to answer your questions or book an appointment for you to meet with me personally to review your situation.

The press in Hamilton has done a great job reporting on the massive increase in the number of personal bankruptcy filings in Hamilton, and in Ontario, and Canada. The Hamilton Spectator interviewed me for an article that said that Bankruptcies Jump 36% in Hamilton area. I thought the article was a perfect summary of the situation, and I’m glad they included my comment that “behind every number, there’s a person.”

This morning I was interviewed live on the CHML Morning News on 900 CHML with with Shiona Thompson and Bob Bratina to talk about the massive increase in the number of personal bankruptcy filings in Hamilton, and in Canada. Listen to Doug Hoyes on 900 CHML here.

Here are the numbers: In the year ended September 30, 2009 the number of personal bankruptcies filed in the Hamilton-Niagara region were up 36%, and consumer proposals were up an astounding 51%. Over the last three months the number of personal bankruptcies increased by 39% in Hamilton, so it’s clear that the pace of filings is increasing. That’s not good news for the economy.

In the last year in the Hamilton area 5,468 people filed bankruptcy, and a further 2,047 people filed a consumer proposal. That’s a lot of people, and it proves that if you are having financial problems, you are not alone. The recession probably won’t end tomorrow, so if you are have more debt than you can handle, give us a call.

Our team in Hamilton, lead by Billy Martell and Wendy Young, understand how to deal with debt, and they are ready to help you with your questions, so give us a call in Hamilton today at 905-777-0770 or 310-PLAN, or e-mail us today, and let’s get started.

For the past six weeks I have been following a multimedia series published in The Hamilton Spectator titled “The Way We Spend” which features four local families dealing with budgeting, cutting back on indulgent spending and saving in a healthy way. This week the Greenways were featured and the credit counsellor they were paired with from Catholic Family Services reviewed their financial situation and the recommendation to them was that they consider filing a personal bankruptcy. Although the Greenways knew that a bankruptcy might be their only option, they wanted to take responsibility for the debt they owe.

Every day I meet with people who, just like the Greenways, have exhausted all other possibilities and find themselves struggling with the thought of having to file a personal bankruptcy. Many people try to hang on as long as they can before looking for professional help with their finances. Unfortunately, if you wait too long to seek advice and you ignore your creditors they will get aggressive and try and collect, which could lead to a wage garnishment or action against your assets.
If you are struggling to pay your bills on time and you would like to find out more about bankruptcy, my advice is to give me a call in Hamilton at 905-777-0770 or 310-PLAN, or email me. I would be happy to answer your questions as they pertain to your personal situation.

We also offer a free confidential consultation where we can review the bankruptcy process with you and also provide you with information on other options such as a consumer proposal or debt management plan.
Keep reading in the weeks to come for my comments on other topics covered in this week’s feature dealing with garnishments, preferred creditors and credit rating as provided by the Office of the Superintendent of Bankruptcy.

I appeared this morning for a live interview on the morning show on 900 CHML with with Shiona Thompson and Bob Bratina to talk about changes to the personal bankruptcy rules that take effect on September 18, 2009. I always enjoy appearing with Bob and Shiona; they do their research and always ask good questions. Click here to hear Doug Hoyes on the CHML Morning News discussing The New Bankruptcy Rules

I explained that under the old rules most first time bankruptcies ended in nine months. Under the new rules, if you have more than $200 in surplus income each month your bankruptcy is automatically extended for a further 12 months, so you are bankrupt for 21 months in total, and you are required to make your surplus income payments for the full 21 months. Obviously for many people this will more than double the cost of bankruptcy.

Bob and Shiona asked me why the government made this change. I said I didn’t know, but I can only assume it’s to encourage more people to avoid bankruptcy and file a consumer proposal instead. Under the new rules you can file a consumer proposal even if your total debts, not including the mortgage on your principal residence are up to $250,000, so I suspect that a greater number of Hamilton residents in the future will choose to file a consumer proposal.

We ran into a commercial break, so in an unusual move Bob asked me to stay for a second segment. When I returned, he asked me about student loans, and I explained that under the new rules if you have been out of school for more than seven years your student loan is automatically discharged in a bankruptcy, or a consumer proposal.

What does all of this mean? If you are in debt, you need to deal with a firm that understands the new rules, and can advise you on your best options. Our team in Hamilton, lead by Billy Martell and Wendy Young, is fully briefed on the new rules, and they are ready to help you with your questions, so give us a call in Hamilton today at 905-777-0770 or 310-PLAN, or e-mail us today, and let’s get started.

My colleague Douglas Hoyes was quoted in the Hamilton Spectator today, in an article on Using Plastic to Pay Daily Expenses.

As the economic gets worse, more and more Hamilton residents find themselves using credit cards to buy food, and to put gas in their car.  That leads to high levels of debt.  Doug is quoted as saying that many people feel “hopeless”; they don’t know what to do or where to turn.

I agree that sometimes things can seem hopeless.  If you have lost your job, or if your hours were cut back at work, you may not know what to do or where to turn.

My job is to give people hope.  Even in a bad economy, there are still ways to deal with debt.  For many people the answer may be credit counselling,  where a deal is made to deal with your debts at a reduced interest rate.

Another great option is a consumer proposal, where we work out a deal where you pay a portion of what you own.  If that’s not possible, bankruptcy may be the answer, but only after considering all alternatives.

You may feel hopeless, but there is hope, so give me a call today in Hamilton at (905) 777-0770, or 310-PLAN, or e-mail me to set up a free initial consultation, and let’s get started.

As I picked up my copy of the Hamilton Spectator on Saturday, I couldn’t help but notice the big bold number printed on the front page “129,000”. That is the number of jobs lost in Canada during the month of January, and over half of them from Ontario. Since Statistics Canada began compiling data in the 1970s, this is the largest single monthly job drop.

How has this massive loss of jobs impacted the Hamilton area? For starters, the unemployment rate in Hamilton has jumped to 8 per cent, which is among the highest rates in Canada, and it is reported that Hamilton has lost over 8,000 jobs since last October, mainly from the manufacturing and steel industries.

Although economists believe that the current recession will be short lived, for many Hamiltonians, reduced income and mounting debt could spell disaster.
Is it possible for you to weather the storm and deal with your financial problems on your own? The best advice I can give is to be proactive and have a plan in place now. It may be as easy as seeking the help of a credit counsellor to learn how to cut back on some expenses and to rework your budget. Alternatively, filing a consumer proposal or a personal bankruptcy might be most advantageous in your personal circumstances.

If you would like to discuss your options with me, simply give our Hamilton office a call at 905-777-0770 or 310-PLAN, or email me. I would be happy to review your situation with you and answer any questions you have.

I had the pleasure of appearing this morning on the Morning News on AM 900 CHML with Shiona Thompson and Bob Bratina to talk about debt and Christmas.  I gave some Tips on Surviving the Economic Crisis, which included reducing your debt, and staying out of debt.

At Christmas time we all want to buy lots of gifts for our loved ones, but given these uncertain times I suggested that using cash or a debit card is a good idea this year; leave the credit cards at home.

If you already have more debt than you can handle, give Billy or Wendy a call in Hamilton at 310-PLAN (no aread code required), or e-mail them, and they will help you work out a plan to deal with your debts.

Almost everybody we meet with is concerned about losing their home. Whether or not this will happen depends a lot on the specific circumstances of your situation. When you meet with a bankruptcy trustee, they will determine if you have equity in your home and if you do, how much. The amount of equity you have is determined by taking your home’s current appraised value and subtracting from it the outstanding balance on your mortgage. If there is equity, you will have to find some way to give this amount of money to your creditors. If you cannot do this, then there is a chance you could lose the home. Ultimately, it will be the mortgage holder’s decision whether the property is seized or not.

If you have no equity in your home and your payments are up-to-date, it is very likely that you will be able to keep it as long as you continue to make your payments on time. You may have to take a close look at your financial situation and determine whether the property you currently have is really affordable for you. When you file a personal bankruptcy, you will be given the choice to give up the property if you cannot afford the payments. It does not make sense to keep the home if you owe more than it is worth.

Although everyone wants to be a home owner, if you are in financial trouble, it just may not be possible for you right now. See if you can rent a comparable property for less or if you could get by in a smaller place than you currently have.

If you need more advice about filing for bankruptcy and its impact on your home, call 310-PLAN or send us an e-mail and one of our professionals will get some background information about your situation and arrange for you to meet with a bankruptcy trustee in Hamilton. If you would like to contact the Hamilton office directly, call 905-777-0770. Together, we will review your situation and can refer you to a mortgage broker if needed.

There is a stigma attached to having to file bankruptcy which makes people very nervous that their friends and co-workers will find out. If you file for bankruptcy in Hamilton, there is a possibility that your friends could find out if they went out searching for the information. Bankruptcy is a matter of public record, so anyone could get access to the information, however it is usually not published anywhere. The only exception to this is if a large asset is involved (such as a business) then, bankruptcy laws state that we must publish this in local newspapers. However, 95% of the bankruptcies we deal with are small ones that don’t require this.

If somebody were to call us and ask if you had filed a bankruptcy, we would be required to give them an honest answer. It is hard to imagine why someone who is your friend would do this however and we typically only hear from creditors who people are trying to borrow money from after their bankruptcy is discharged.
So, will your friends find out if you go bankrupt in Hamilton? They will if you tell them. There is a chance they could find out on their own but they would need to actively seek the information so the likelihood of them finding out is slim.
Don’t let the fear of embarrassment keep you from getting out of financial trouble because the longer you wait, the worse your debts will probably get. Call Hoyes, Michalos & Associates today at 310-PLAN or send an e-mail and we can set up your initial consultation with myself, Billy Martell and my team in Hamilton. You may also contact the Hamilton office directly at 905-777-0770. Let us help you find a way to get a financial fresh start!

Many of us have heard a family member or friend complain that they feel like they are working harder for less pay.  I heard a review of an interesting report on the radio this morning that, if true, could lend some statistical support to this feeling.  In the fall of 2006, the Canadian Centre for Policy Alternatives conducted a study that found that Canada is performing better economically, but that the income gap between the rich and the rest of Canadians is growing at the fastest rate ever.  The study found that the majority of Canadians are falling behind compared to Canadians a generation ago, and that all, but the richest 10% of Canadians are working almost 200 more hours a year than just nine years ago.  The richest 10% are earning more, but are not working more hours.  So, it seems that it could be that, some of us are, in fact, working harder for the same or less pay.  While some families have seen their incomes increase in the last 8 years, many families have not.

The poorest 10% of families raising children in Canada lived on less than $23,300.00 in 2004; half of these families lived on less than $17,500.00.  Taking into account adjustments for the rate of inflation, the earnings for this segment of the population are lower than they were in the 1970s.  So, the majority of Canadian families raising children have had to invest more time at work to simply stay afloat.  Government programs have helped support families, but there is little doubt that some families are struggling, and could end up relying more and more on credit to meet both their needs and their wants.

The study found that almost half of households are raising children under the age of 18.  Statistics also tell us that the vast majority of parents raising children are working; this increases the need for childcare.  So, more hours worked, means more hours to pay for childcare.  If the study findings are accurate, we are paying for more hours of childcare on the same income we had a decade ago.  Add to that the increased costs of childcare, and one can see why some families are struggling more than they did in years past.

If you feel like you are working harder and not getting ahead, this study suggests you may not be alone.  What I can tell you for sure is that you do not have to deal with financial worries by yourself.  We just might be able to help, and the solution might be easier than you imagine.  If you and your family is struggling, or you know about a family in trouble, feel free to give us a call at 310-PLAN or visit us at www.hoyes.com to read about the options available.