Posts by Topic: Bankruptcy in the news
“Debt relief dilemma” – CHCH News Reports
Debt settlement companies are becoming a hot media topic lately – and for good reason…
As many Canadians are reaching new levels of consumer debt, the demand for debt resolution assistance is sure to follow. Individuals pressed for debt relief may find themselves at the door of companies promising to slash their debts – some even with the help of familiar-faced celebrity spokesmen. Unfortunately, many of these claims are proven to be false – it’s not unfair to say that the debt settlement industry in Canada is going through significant ‘Growing Pains’.
In part due to lack of provincial legislation overseeing such companies, countless debtors have found out too late that the enticing results boasted by the “programs” are more fiction than fact. Trusting debt-relief seekers may lose large sums of money to up front and unclear contractual fees and many will continue to endure tireless collection efforts in attempt to dig themselves out of debt using such services.
A recent interview with Toronto’s Doug Hoyes, co-founder of Hoyes, Michalos & Associates and Laurie Campbell, CEO of Credit Canada Debt Solutions sheds further light on a growing trend.
To watch the CHCH interview please click here.
Sands & Associates’ Blake Elyea featured in The Globe and Mail
Our very own Blake Elyea was recently featured in The Globe and Mail, sharing his insights into a growing trend in the consumer credit world – “Grandpa Debtor”.
Click here to read The Globe and Mail article.
Meet Karen Johal – Our featured team member for April
If you’ve been through the doors of our Vancouver office, chances are you already know the face of Karen, who has been with Sands for the past two years. Often the first person to greet and direct clients, calls and yes – even the odd frazzled co-worker, Karen rules the front desk, exerting her calm and organization.
In her downtime Karen keeps busy as a make-up artist (a little glam anyone?). She also loves cooking, travelling and even the gym (shaming some of us).
Karen’s keep out of debt tip: Spend within your means while watching and recording exactly where your money goes!
If you would like to book a free confidential consultation to discuss your debt resolution options in our Vancouver office please call 310-0911 or request a free consultation online.
Breaking news in Burnaby NOW – Consumer Proposals jump by 15% in 2011
Consumer Proposals are becoming an increasingly popular choice of debt resolution for individuals overburdened with their debts, as discussed in last week’s Burnaby NOW article featuring our own Blair Mantin.
As mentioned in the article, according to Mantin, the bankruptcy rate went down 25 per cent while consumer proposals increased by 15 per cent in Burnaby in 2011. As well as including common creditors such as taxes and often student loans “Consumers usually pay about 30 per cent of what they owe over three to four years with a consumer proposal”.
A word of caution from Mantin however as consumers tackle their debts, about many private debt consultants who are also in abundance – as they may demand upfront fees and make promises they are unable to keep. Only a bankruptcy trustee can actually file a Consumer Proposal (and they offer free initial meetings).
To read the article please click here.
Photograph by Larry Wright, BURNABY NOW
Sands & Associates featured in the Globe and Mail speaking on Debt Consultants
Our own Blair Mantin, Trustee in Bankruptcy, was featured in the Globe and Mail this week providing commentary for a piece entitled: Beware the debt-reduction pitch.
What does a Debt Scam sound like? Listen to find out.
Imagine our surprise last week when one of our very own team members was the lucky recipient of a telemarketing call that was clearly from an unregulated debt consultant and was aimed at a consumer who was unaware of all of their legal options.
Luckily, our team member quickly clicked ‘record’ so that we could analyze exactly what claims were being made. Take a listen below:
What does a Debt Scam sound like?
Let’s take a closer look at some of the content of this short message:
What they said:
“… which may allow us to lower your monthly payment by half, and reduce your total debt by up to 50%”
Our take:
As a means of getting you to keep listening to this obvious telemarketing ploy, they make their boldest claim up front. Imagine – reducing your monthly payments by half and reducing your total debts by half as well? Let’s listen on to see how this works!
What they said:
“… credit card bills, personal loans and many other types of unsecured debt”
Our take:
Of course they’re not mentioning that income tax, student loans, wage garnishees, or anything other than credit cards and personal debts can be included. In fact, they’re not mentioning that many credit card companies have actually stopped dealing with these unregulated operators due to false claims and high fees.
What they said:
“… make one low monthly payment you can afford, become completely debt free in months. This opportunity will not last”
Our take:
Just so we’re clear, the creditors have agreed to accept debt reduction plans only for a ‘limited period of time’? Why would this be so? Why will this opportunity not last? This is completely false and a high pressure sales technique aimed at creating urgency in the consumers mind.
What are they actually selling?
These operators typically work completely by phone and you’ll never meet with them in person. You’ll conduct all of the business remotely, often with someone not even located in the same country as you! They will begin to charge you monthly fees and attempt to build up a ‘settlement balance’ of your savings over a period of months. During these months, of course your creditors will continue to pursue you aggressively – seeking wage garnishees, getting court judgments, seizing assets – all of which will negatively impact your credit rating and cause you stress.
When the debt consultant feels as though they have enough in the account to make an offer to your creditors, they will do so, after first deducting their fees of course. If the offer is not accepted, well, too bad. They’ll send you elsewhere, pocket your money and move on to the next unfortunate victim.
In our offices, we have seen increasing numbers of clients who have started dealing with these debt consultants and have come to us after spending thousands of dollars and enduring several months of aggressive collection tactics, only to find that nothing has been done for them. As for the fees they have paid, unfortunately there’s no regulatory body that you can complain to to recover.
In Canada, a Consumer Proposal can offer all of the benefits claimed above but with the added bonus that – it actually works. If you’ve started working with an operator such as the above, I invite you to share your story on this blog, or phone us at 310-0911 to meet with us for a free consultation to review your options.
Student debt has heavy price
At graduation time there are many reasons to celebrate. Years of hard work and sacrifice have culminated into a few moments of pride and a huge sense of accomplishment – you have earned that university degree! For many students, however, the euphoria is somewhat short lived when they consider their prospects for repaying their student loan debts.
Given that the economy is still pulling itself out from one of the deepest recessions in history, the availability of well-paying jobs in certain fields can be scarce. The ability of many students to earn sufficient income to service their student loan debt can be limited, leading them to wonder what options might exist to deal with this debt.
As the attached article states, an estimated 4.3 million students have received almost $32 billion in Canada Student Loans since the Canada Student Loan Program (CSLP) was created in 1964. In 2008-2009, the CSLP provided $2.1 billion in loans for full-time studies to more than 365,000 students across Canada, for an average of nearly $6,000 per recipient. 2009 statistics from the Canadian Federation of Students indicate that the average student loan debt was approaching $27,000 by graduation time.
At Sands & Associates, we see a large number of people who are struggling to keep up with what can be an unmanageable level of student debt. Here are a few things to keep in mind:
- Student loan debt is treated differently than most other debts in a personal bankruptcy or consumer proposal. Even though income tax debt and most other government debts can be discharged without a waiting period, Student Loan debt is subject to a waiting period of 7 years before the debt can be dealt with in a bankruptcy or consumer proposal. Quite simply, if you file for bankruptcy or make a consumer proposal prior to the expiry of this period, you will still owe your student loan debt when the process is finished.
- The 7 year clock starts ticking once you finish your studies, however, it’s important to confirm exactly what date is on record as your last day of studies. For example, if you left school prior to finishing a complete term, your last day of study could be noted as the day that you would have finished the program, rather than the day you actually attended your last class.
If you are struggling with an unmanageable student loan burden and need help to understand your options, please Contact Us for a free, confidential evaluation of your financial options.
Read the complete article “Student debt has heavy price” from The Globe and Mail.
Consumer Proposals Popular Alternative to Bankruptcy
In a year when personal bankruptcies declined by nearly 8 percent, the number of consumer proposals filed increased by more than 30 percent. Why? Quite simply, a Consumer Proposal is the number one alternative to bankruptcy and often makes more sense for both the creditors and the person struggling to pay debts. As outlined in the article, “Proposals work out well for the creditors because they’re getting some money back, more money back than in a bankruptcy, and from the individual standpoint, it’s not a bankruptcy.” For many people, the stigma of bankruptcy is a significant factor in their decision on how to deal with their debts. A Consumer Proposal allows you to make a fair and reasonable ‘deal’ with your creditors with clear benefits on all sides.
Continue reading “Consumer Proposals Popular Alternative to Bankruptcy” »
Credit Cards Create Financial Abyss for Joe Debtor
Many people who visit us for a free consultation are ashamed of the circumstances in which they find themselves. They place significant blame on themselves for having gotten into financial difficulties and view the legal remedies of a consumer proposal or personal bankruptcy as admissions of failure.
From our experience, the majority of people who file a consumer proposal or personal bankruptcy are honest but unfortunate people who have been faced with life circumstances (i.e. job loss, illness, marital breakdown) that have made it difficult for them to repay their debts in full, with interest, in a timely manner.
An Ontario-based Trustee in Bankruptcy Firm, Hoyes Michalos, has released a detailed study of more than 8,000 people who filed consumer proposals or personal bankruptcy in 2009 and 2010. The results might surprise you:
- 80% of people who file a consumer proposal or personal bankruptcy are employed
- The average monthly take-home pay for an insolvent debtor is $2,240, which is very close to the average monthly take-home pay for all Canadians ($2,419).
- Nearly 40% of people who filed a consumer proposal or personal bankruptcy indicated that job-related issues (income reduction or job loss) contributed to their situation.
- More than 10% of cases studied indicated that medical issues played a role in their situation.
We invite you to review the attached study: Joe Debtor: The Face of Bankruptcy taken from http://www.hoyes.com