Toronto Ontario Personal Bankruptcy Blog: October 2006: Answers to Personal Bankruptcy Questions

Posted on Sunday, October 22, 2006

Mortgage Payments and Income Taxes Under Consumer Proposals

If I file for a consumer proposal, will I have to leave my home if I am in default with my mortgage?

Do consumer proposals cover debt owing for income taxes?

Posted on Monday, October 16, 2006

Using Scissors to Avoid Bankruptcy in Toronto

The Toronto Star ran an interesting article today (you can see it on their web site) where they described the most obvious way to deal with credit card debt:cut up your credit cards.

The article quotes Jean-Guy St-Amore, a spokesperson for the Financial Consumer Agency of Canada, who says that: "The average person has three credit cards, we question that."

The article goes on to state that if you are carrying a balance on more than one credit card, the best solution is to cut up all but one of your credit cards, then call the credit card company and cancel them so you don't incur any more debt. Then, make a budget and start working to repay your credit cards.

If your credit is still in good shape, consider getting a debt consolidation loan to reduce the interest you are paying.

The article doesn't go on to discuss what to do if you have bad credit and can't get a debt consolidation loan, but the obvious next steps would be to consider filing a consumer proposal, or a bankruptcy.

Feel free to contact us at 310-PLAN or e-mail us for more on your options to avoid bankruptcy in Toronto.

Posted on Thursday, October 05, 2006

Is the Housing Market in Toronto Getting Soft, and Will That Lead to a Higher Bankruptcy Rate?

An interesting article appeared in today's Toronto Star. The article was titled Housing Market to Cool, and it quoted experts as saying that after the record sales in 2005, the number of sales in Toronto will probably fall by 1% in all of 2006.

In September 2005 there were 7,326 sales in Toronto, but in 2006 that number fell to 6,622, a drop of almost 11%, indicating perhaps an even steeper decline than many experts expected.

As interest rates increase, monthly mortgage payments increase, making it more difficult for homeowners to make their monthly payments. If incomes also start to decline as the economy slows, some homeowners and real estate investors get caught in the squeeze, and are forced to sell their homes. With more sellers, prices drop further, squeezing even more people.

I have seen many people over the last few years who have re-financed their houses as interest rates dropped and house prices increased, and they have used the money to pay off other debts, but many of those people find themselves in debt again as prices and incomes decrease, and that can ultimately lead to a higher rate of bankruptcy in Toronto.

If you have more debt than you can handle, and you are worried it may get worse, please e-mail us or call us at 310-PLAN (no area code required) to discuss your options. Be sure to ask us about a consumer proposal, which is a great option for dealing with your debts and allowing you to keep your house in Toronto.