Bankruptcy Kitchener Blog by Scott Schaefer

Are you struggling to make ends meet for you and your family? Do you lose sleep worrying about how you are going to manage your debt? Understand that you are not alone. Many people in Kitchener-Waterloo have seen the same financial ups and downs for plenty of different reasons and as a result, our phones continue to experience large volumes of people calling with questions about their debts. To address all the questions that we are receiving, Ian Martin and I will be on the 570 News “Ask the Expert” show this Saturday February 4th at 12:00 noon. You can tune in and listen to the radio show on 570 AM or watch the live video feed on the 570 News website.

We are going to dedicate the entire hour show to answering debt related questions for the residents of Kitchener-Waterloo and all of Waterloo region. We will explain in detail consumer proposals and personal bankruptcies. In addition we will discuss surplus income in bankruptcy, what assets are protected when you file, who can file a consumer proposal, and what debts can be included.

If you can’t wait until Saturday, feel free to visit our hoyes.com website for more information to help you with your situation. If you would like to discuss your situation now, please call us at 310-PLAN or send us an e-mail.

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Do you have questions about debts?
Do you want to understand your options?
Do you want to know about debt consultants and why they charge money to see them?
Do you want to know about what a trustee in bankruptcy does?
Do you want to learn more about personal debts?
If you answered yes to any of these questions, then join Doug Hoyes and Ted Michalos live on Ask the Expert on 570 News this coming Saturday September 24 at 1:05 on AM 570 News. For the first time ever, the Ask the Expert Show will have a live video feed to the 570 News website. Therefore you can tune in at 570 AM or by going to the AM 570 News video feed on the web. To learn more about the show, click here.

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Every once in a while, we need to step back and look at where we are and whether or not we are meeting our objectives. It is at this time, I look at my blog site and consider the past postings and the direction I should be going with the site. The first step for me is to consider what the overall goal of the site is. From this review, I have determined that the forward focus of my blogs will be to provide the residents of Kitchener Waterloo with appropriate and relevant information about consumer proposals, credit counselling, consolidations, budgeting, and personal bankruptcy as they relate to our local situation. Our homes and the communities we live in are here, so we should focus on how things relate to us here at home in Kitchener Waterloo.

While I have written several blogs over the years containing information that may be helpful to some, I want to make a more active attempt at providing relevant stories, examples, and key information to help individuals deal with their current situations. By passing on situations and experiences that people from Kitchener Waterloo have faced, I believe that the readers can then use this information to compare to their own situations to gain a better understanding of how they can move forward. Personal finance is something friends and family rarely share with eachother, therefore it can be hard for some to understand their own situation and they may feel alone in their struggles.

Research on the internet is a primary source of information and it plays a vital role in all our lives. We need to know how things work today and how they apply to us. Therefore, I also want to be able to provide information as it becomes available – avoiding delays in relaying that information – as a result, I will soon be adding a Twitter feed to my site. Another key step in providing information to local residents of Kitchener Waterloo, will be to allow questions and comments to be posted to me via my blog site. I can then respond to someone`s questions and comments to my postings to address any clarification or specific questions. In this sharing of information, we all can benefit.

Stay tuned and provide me with any comments you may have. I would love to hear your suggestions, please do not hesitate to send me an e-mail. Change is one thing most of us struggle with, but I feel I need to change to move forward in order to provide the appropriate and relevant information to my fellow residents in KW.

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Over the years in Kitchener-Waterloo, many significant business stories have made the news. When business such as Budd Canada, Labatts, Uniroyal Goodrich, Electrohome and Kaufman Footwear first opened their doors they became a huge contributor to the earnings of Kitchener-Waterloo residents but they also became a big news story when they downsized and eventually closed. The impact of this on local families resulted in difficult times for many as they worked to recover from job loss and to find new employment at comparable income levels.

Today, we are experiencing different success stories of companies in the high-tech and insurance industries. With large companies like RIM, Sunlife, Manulife, come many good jobs. These companies are playing key roles in our local economy.

Large companies in their best years offer large amounts of jobs and bring in significant revenue to the community. These jobs allow people to settle into Kitchener-Waterloo by spending their income at local retailers, buying homes, raising families, and participating in the community. It could be said that large companies have helped shape the city into what we have today.

With the business world constantly changing, people have to adapt; change in employment is almost inevitable. The idea of “life-long” employment at one place is a thing of the past. This greatly affects individuals and their families as they try to maintain a secure lifestyle through changes in jobs. When you add a change in employment or a period of time without employment, with the amount of debt that families are carrying, it can be devastating to the family. In fact, job loss or reduction of income is one of the common causes of someone filing a consumer proposal or personal bankruptcy in my Kitchener bankruptcy office.

With RIM’s lay-off announcements over the past week, we are likely going to see people in our community experience job loss and may leave others stressing over future uncertainties. Not to mention the impact on the investments and shares people are holding in RIM stock.

Good, steady paying jobs are vital to keeping a budget balanced. If you are struggling financially due to changes in your employment, periods of time off work, wage cuts, etc and want to discuss options to deal with your debts, give me a call at 519-747-0660 or send me an e-mail.

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Today Dr. Tracy Penny Light invited me to guest lecture in her classroom at St. Jerome’s University in Waterloo. The topic for the lecture was Family Work and Family Money as part of the course on Couples, Marriages, and Families. The class consisted of 89 students enrolled in various disciplines from St. Jerome’s University and University of Waterloo.

We discussed various Family Work and Family Money issues, but the core part of this is the focus on personal finances. Personal finances are one topic that seems to never be taught to our students throughout the various levels of school. Within personal finances, is personal budgeting. Most peoples budgeting uses the “sink or swim” theory that exemplifies that you just have to live it to learn it. I presented to the students that personal finances are about “choices and constraints”. Conveniently, this was the name of the class text book. As adults we all know too well the true money constraints we live with, as there is only so much money to go around. As kids, it is hard to fully gain the appreciation of this concept.

I focused the class discussion around things the students should think about as they graduate, enter into the work force, develop their relationships, and have a family. When it comes to the working environment, I believe we are all going to see more changes in our jobs as the years go by. Only a limited number of people will have only one job for the rest of their lives. Most will be employed by a variety of companies throughout their lives. We will see changes in the market place with economy swings, government regulations, companies merging, etc. The more prepared for change we are, the more able some will be to adapt to that change.

When it comes to children, there are courses available related to child birth and parenting, but I have yet to see one course that prepares new parents on budgeting as a family. During the lecture, we discussed things the students should plan for when it comes to children, house, vehicles, travel, etc. No one case is ever the same, but the fact is we need to be open to discussions on personal financing. Personal finance is one area people tend to keep relatively sacred and rarely discuss with peers. I feel it is time to share our experiences and help people as they learn to “swim” in the adult working world with great financial commitments and responsibility.

The concepts I discussed with the students today are not new or overly complex. The key thing I wanted the students to get from the lecture is to consider life and how it impacts their own needs as well as understand the choices and constraints they face. These concepts are even more relevant to someone who is obtaining a fresh start through a personal bankruptcy or a consumer proposal. Bad things happen to good people. With a fresh start and life’s past experiences under one’s belt, it’s all about the future and what can be made of it.

If you are overwhelmed with your debts and would like to sit down and discuss your personal situation so that you can make a plan for the future, please call me at 310-PLAN or send me an e-mail.

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One question we all consider in some form or another is “am I normal?” This question also applies when it comes to debts and financial difficulty. When I meet with people in my Kitchener office, several ask if they are the only ones experencing these difficulties. It is quite normal to ask this as the person did not plan to be overwhelmed by debts. Often a sequence of events in their life leads them to harder financial times. I have always believed part of this is due to the fact that many people will not discuss their finances with family and friends. We tend not to discuss our debts, income, or savings with others. People will discuss issues or concerns regarding health, marriage, relationships, and children, but rarely do they open up about personal finances.

Many people have the opinion that someone who files bankruptcy is not working or is just using the system. A recent study by Hoyes, Michalos & Associates Inc. took a deeper look at the average person who files a consumer proposal or personal bankruptcy. The results of this study put this myth to rest. The average Joe Debtor in Ontario is a person who resorts to a consumer proposal or a personal bankruptcy as a solution for a fresh financial start is:

• A 41 year old male
• Married
• Working and making slightly less than the Canadian average income
• Has debts of almost $60,000 (unsecured debts).

Does this meet your stereotype of the average insolvent person? Comparing Kitchener Waterloo to the Ontario results, the average is not that different. The average person who filed bankruptcy or a consumer proposal in Kitchener and Waterloo has over $48,000 in unsecured debts, but also has an average mortgage amount of $227,000.

These are interesting numbers to demonstrate how someone compares to the average. As in any situation, there are many cases in which people have higher or lower debts. As I noted in my previous blog post, with debt levels rising in Canada, problems can arise in any situation or age group. From the individuals and couples I meet with in my Kitchener office they range in age from 18 years old to 80 years old. Times have changed; credit is readily available and as a result, if someone is carrying debts and a few things go wrong, the pressures of debts can become too much.

The Canadian government has created both a consumer proposal and a personal bankruptcy as an option to give a person a fresh financial start. These are last resort options for when all the other options do not work.

If you are reading this blog and wonder about your options, give me a call at 310-PLAN or send me an e-mail. We will discuss your situation and can sit down to review the options and how they work in your situation. From there you will need to go home, plan out the future and find the right option for you. My role as licensed trustee in bankruptcy is to give you an unbiased and fair assessment of your options. There is no cost to see us and our fees are paid through a government tariff when someone files a consumer proposal or a personal bankruptcy.

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This coming Saturday January 15, 2010, I will be a guest on the Ask the Experts radio show on AM 570 News as we focus on explaining consumer proposals to the listeners from Kitchener and Waterloo. The show starts at 12 noon and we will be discussing how consumer proposals work. We will answer your questions on air. Consumer proposals in my Kitchener Waterloo office have increased over the past several years as they have become the leading alternative to personal bankruptcy. A consumer proposal deals with your debts through a manageable monthly payment while protecting yours assets. If you are facing financial hardship and want to learn more about consumer proposals, then tune in to AM 570 News at noon this Saturday.

If you cannot wait until Saturday, call me at 310-PLAN or send me an e-mail. If you prefer to do more research, here are some available links:

consumerproposal.org – website specifically for consumer proposals

Hoyes, Michalos & Associates

Office of Superintentent of Bankruptcy – government that oversees all consumer proposals in Canada

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This past Saturday, I was interviewed in my Kitchener Waterloo bankruptcy office by Andrea Hartling of CTV. She was doing a special on Christmas Spending which aired on the 6:00pm and 11:30pm news. We spent time talking about the impact of over spending during the Christmas season. We also discussed things consumers should consider given there is less than 2 weeks until Christmas. The most important reminder I have is – you need a PLAN.

First, be like Santa – make a LIST and check it TWICE. That is, look at who you have to buy for, what you already have bought and then make a list for what still needs to be purchased. Don’t forget to consider all the extra costs this time of year, such as:
- turkey and fixings for Christmas dinner,
- entertaining items for the guests, like appetizers, and drinks,
- gas for the car to go visit Grandma and family over the holidays, and
- extra child care costs with school out for 2 weeks.

Now before you go to the mall, decide how much more you still can afford to spend. Remember that list you have been making? Check it twice now. Try to determine how much the outstanding items on the list will cost. One great tool is to use the internet to price out what you think you still need to purchase. Then ask yourself this: “How big of a credit card bill do I want to get in January.” If you don’t want a credit card bill, pay cash. Otherwise, only spend what you can afford to repay in January.

The Bank of Canada put a warning out to consumers this week stating that the Canadian debt to income ratio has reached 146 per cent! Now is not the time to over spend if you are not able to pay for it in January.

If you are out of cash, look for alternatives. Talk with your family about gift exchange so you are buying for less people or make Christmas dinner a pot luck meal to spread out the costs. Give your time as gifts, such as:
i. Babysit your sister’s kids so they can have a date night at the movies
ii. Do your relative’s laundry and ironing for a month
iii. Make a coupon book with various things you can help out with
iv. Be creative

If you have been stressing about your financial situation during this holiday season and want to make a plan to deal with your debts, contact me via e-mail or telephone at 310-PLAN. My Kitchener Waterloo office is located at 607 Kings Street West in Kitchener.

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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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As I prepare my kids for the first day of school, I think how much simpler life is to be a kid. Our children may feel that they have many stresses today, but we all know life is much tougher as an adult. There are stresses we face as adults that include jobs, family budget, marriages, raising children, health concerns, etc. Just when things are going well, it can all change. We live in a changing economy that can have big impacts on our lives. We are faced with making tough choices and may not be fully prepared to make these choices. The old saying that we learn from our mistakes comes at bigger costs as an adult. Making the wrong choice could have a huge financial impact on our future.

Therefore as the kids return to school, we should ensure we are providing them with our knowledge of real life lesson s that we have learned so they can be more prepared for their future. The two school boards we have in Waterloo region provide a strong curriculum for our children to learn, but I do feel that one area that is not talked about as much as it should be – personal finances. Our children are not taught how to purchase a house, how to negotiate a car deal, how to manage financially if someone loses a job or become ill. These are areas we all enter into during adulthood and often have to learn as we go. Therefore we should work at teaching our children how to cope with these experiences. We should teach our children how to do a budget and encourage them to save. It becomes hard when the family budget is not working and debt levels are rising.

We all need to keep learning when it comes to finances. I believe that our time today is much different than any other time in history as we live in a time with a record amount of debts as consumers and as a nation. Once someone reaches their limits, a consumer proposal or a personal bankruptcy may be necessary to allow for a fresh start financially. Once someone files a consumer proposal or a personal bankruptcy, they need to consider a world without unsecured debt (ie. credit cards etc) and how they are going to learn from past experiences. The key will be to develop a budget/cash monitoring system given the individual’s situation. This includes understanding our wants vs needs. Cash becomes king again. There are many different methods available and we need to educate ourselves to find which one works for us.

If you are searching for plan to allow you a fresh financial start, please send me an e-mail or call me in my Kitchener office at 310-PLAN.

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