Bankruptcy Kitchener Blog by Scott Schaefer

The primary principle of a consumer proposal or personal bankruptcy is to give individuals a fresh financial start. The first step is to control the debts, which is exactly what a consumer proposal or personal bankruptcy does. The second step is to plan and work on the future. Therefore, I strongly believe what someone does after they have filed a consumer proposal or personal bankruptcy will determine if their fresh start will be successful. The most important part going forward will be the budget.

My top 5 tips when budgeting are:

#1 Cash flow- Cash is everything.
You need to understand and follow the cash. Paying by cash, debit, or cheques is be the new way of life as all of the credit cards are gone after filing a consumer proposal or personal bankruptcy. A budget needs to be set based on expected cash flow. The cash in will be your sources of income. As for the cash out, this is what you will need to control. Your budget should be set with actual cash amounts for expected income and expenses. That is, if you pay something every other month, do not allocate it over two months, record the expense in the month you are going to pay it. If it is a 3 pay month, put the 3 pays in that month; do not spread it across to other months. The budget should respresent your expected cash flow.

#2 Simplicity – Keep it simple
Do not over complicate a budget. A budget is a list of your expected cash in-take and your estimated cash requirements split into specific expense category. Group the expenses into related categories, such as shelter, vehicle, groceries, etc. Try to limit the number of categories so you do not over complicate the budget. There is a good worksheet for an example at this link.

#3 Budgeting is like a diet – you need to be committed to see the results
For effective cash management, you must stick with the budget you set. If you overspend, you are going to feel it and you will not meet the budget you planned for. Just like calorie counting, if you don’t stick to your plan you won’t see results. To succeed, you must be committed and have discipline.

#4 Tracking – know where your money goes
Track every dollar you spend so that you know where it is going. You can only compare your actual spending to the budget if you truly track every expense. From there, you can assess how realistic your budget was and make adjustments to what you believe is best for you. We are all limited with how much we can make, so we need to know where every dollar is going. If you track all your expenses you will be encouraged to make changes to some areas of your budget – cut out bad spending habits.

#5 Look into the Future – plan for the unexpected
There are some expenses we do not plan for, but we know will happen, such as car repairs. You should now plan to have some money set aside for irregular expenses. This can be done by having a savings account at a bank in which you transfer a set amount each pay day. That is, create it like an expense. This spare bank account will then be used for irregular expenses such as car repairs, birthday and Christmas presents, medical costs, etc.

There is life after debt but you need to control it. To arrange for a free meeting in my Kitchener office to discuss your budget, please send me an e-mail or call me at 310-PLAN.

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In rare cases, a creditor will oppose the discharge of a personal bankruptcy, so lets discuss what this means from a technical stand point. This can be confusing and it is important to note again that this does not happen very often in Kitchener Waterloo area. If you have any questions, please contact me.

An individual files for personal bankruptcy to receive a discharge from his or her debts. Bankruptcy laws are set up to allow a discharge to happen automatically after the bankruptcy is complete. A discharge from bankruptcy occurs when all bankruptcy duties are completed and as a result the debts are released. In some cases a creditor wants the courts to review the bankruptcy; this is referred to as a creditor opposition. The opposition is to the automatic discharge. The individual will still remain eligible for a discharge, however the terms will be decided by a registrar at a court hearing.

If a creditor wants to oppose a bankrupt’s discharge, they must serve notice to the trustee, the bankrupt, the court, and the government. The notice the creditor serves must list out reasons for their opposition. At this point, the creditor would have to appear at the court hearing to prove their facts such as fraud, gambling, speculation, etc. The bankrupt individual is entitled to respond to the items raised. From this point the court will decide on the type of discharge to be granted and whether conditions will be put in place outlining additional duties before the discharge is received. For example, the court may order that an extra amount is to be paid to the trustee for the benefit of the creditors as a condition to be met for the individual to receive an absolute discharge.

With respect to accepted consumer proposals, creditor oppositions do not apply.

To read more on creditor oppositions please see at this link.

In most cases, creditor oppositions do not happen as the bankruptcy laws are set up to provide a fresh start to the honest but unfortunate debtor. If you would like to discuss your financial situation and options, simply contact me today via e-mail me or call me at 310-PLAN.

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I moved to Waterloo in 1993 when I first attended Wilfrid Laurier University. Since then, I have made Kitchener Waterloo my home. I believe that in my profession, it is important to live and work in the same community. I feel a greater connection with my community knowing I am helping fellow residents of Kitchener Waterloo.

I try to support and participate in local activities and events. Just this past weekend, I ran the 10K Oktoberfest race in the Waterloo Running Series. Along with the other participants, I ran from Conestoga Mall down King Street to William Street, then looped around and ran by the University of Waterloo and Wilfrid Laurier University before finishing at the Waterloo Recreation Complex.

I find running can be a lot like budgeting. I started running a few years ago for general health reasons as well as for my personal enjoyment. Much like budgeting it started for financial health reasons. When a run goes successfully, it is very rewarding, much like when the budget you set works out and you end up with left over funds in your pocket. The hard part of both running and budgeting is that it takes a lot of practice to make it work. If you over spend one day, the budget will not balance without negatively affecting another area of the budget. With a run, if you over eat one day, your run will be slower than normal and hurt that much more. Further, it you stop running for a period of time, it takes some time to get back into it. Just like budgeting, by not tracking your expenses for a period of time it will be difficult to make sure you do not over spend and you may even need credit to help you out.

Therefore, to become good a budgeter, it takes a lot of practice. There will be good days and days not so good. Making a budget work, takes time and discipline. The better you can become at budgeting the more money you will have to save for the goals that matter to you. Just like in running, the more you run and train, the faster and better runner you can become.

Over the past year I have improved my 10K race time from 49:23 to 46:28 and helped hundreds of people from the Waterloo Region make their budget work again. If you want meet with me in my Kitchener Waterloo office located at 607 King Street West and review your options so that you can make your budget work, e-mail me or call me at 310-PLAN.

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