We get letters…

Helping people when they are at one of the lowest points in their lives in what we do best at A. Farber & Partners.  All of our staff are dedicated to helping people alleviate the financial pressures they are experiencing and, most important of all, giving them a second chance.

So when we get testimonial letters like the one below, we like to share it with the world:

Dear Jennifer & Linda:

The day that I got to meet you two was such a blessing.  Hurrah, the consumer proposal is now over; however it still has a memory that I’m determined from which to learn. 

I feel very fortunate that timing was on my side. Thank Heaven for Family Services and for Heidi reaching you and you being available to see me.  That was the beginning.  Now, I may feel that this is the end but it’s just the next stage.

You two made my job so easy.  Once you explained everything to me and we finalized my paperwork all I had to do was get you my consumer proposal payment each month.  But you gave me so much more — and this is where not only your knowledge kicked in but your wonderful personalities.  Your utmost patience at my umpteen calls, small questions, big questions – you accepted them all and still managed to make me feel special. 

Thank you both so much from the bottom of my heart.

D. S. 

Make tax planning your New Year’s Resolution

Many of us are considering our lists of New Year’s Resolutions.  How about adding this one to the top of your list?   One of your major 2011 Resolutions should  be to clean up your unfiled and unpaid GST, PST, HST, payroll taxes and income taxes.

Trustees in Bankruptcy can help you avoid bankruptcy AND clean up your bad tax history without losing your business, house and reputation.

Many people have unfiled taxes  (sometimes for many years) because they  are not sure how to pay them, they’ve  lost the paper work, or are terrified of what the CRA will do once they DO file them.

Well, here’s the scary news:  Canada Revenue Agency will catch up to you.  And if you are an avoider and non-filer it will get ugly… Quickly.   CRA has the legal right to seize your assets and freeze your personal bank and business accounts.

Trustees in bankruptcy are the only professionals trained and licensed-Federally to deal with your tax and money problems.

So make the coming weeks a positive time for yourself and give a Trustee in Bankruptcy a call to schedule a free consultation so you can confront this issue without fear.

Our R Plan program has tools in its toolkit specifically designed to help you determine the right path. No bankruptcy.  No loss of your business, assets and reputation.   Call us at 310-1100 toll-free today for a confidential face-to-face meeting in your area.

Tax debt CAN go away and you CAN obtain peace of mind.  And make that New Year’s Resolution a reality.

The Perils Of Gambling – Thoughts from a Trustee in Bankruptcy

Questions from Twitter

Can My Creditors Seize My Property?

We had a terrific question raised recently by someone who came in to meet with one of our debt managers to discuss her financial pressures face-to-face. The question was about the power a creditor can bring to bear on someone who owes them money. Specifically, this young woman asked if Visa could force her to pay back the $50,000 debt she owed to them. She was also terribly concerned about her home, her car and her monthly paycheque – could they do anything to her? Could they force her to pay back the debt?

We find these types of questions to be among the most common we receive, and while every single person’s situation is slightly different, the fear and the concern expressed are traditionally the same: Can my creditors take my possessions? Can they garnishee my paycheque? And can they touch my personal property? The short answer is: Yes they can, and they may already be taking steps to seize your wages or other property if your debt is over-extended.

All of this doesn’t occur instantaneously. Luckily, in most cases, your creditors will give you ample warning of their determination to be repaid, including advising you that legal action will be pursued. You may be asked to appear at Ontario Superior Court to explain why you have not paid your debts to a particular creditor. And even before your case reaches the courts you will be receiving harassing, and often disturbing, telephone calls and letters from collection agencies who have been hired by your creditors to collect the money you owe them.

Normally, by the time the collection calls start to become a big problem, most people who owe money to their creditors have made a move to come in and talk to us. They want the calls to stop, the demand letters to cease, and they don’t want their friends, neighbours, family members and co-workers (especially their boss or immediate supervisor) to know that they are in debt and under extreme amounts of pressure from these collection agencies and creditors.

Some people can even hold off the collection agencies for long periods of time, utilizing a variety of methods. But ultimately the garnishment or legal decision demanding repayment will appear and a decision must be made: How do I make this problem go away as quickly as possible?

That’s when we recommend you contact us (though, preferably, getting in touch with us when the collection calls begin would be a better option, especially if such calls are causing you undue stress). We can quickly book you a free consultation at one of our more than 30 offices across Ontario. There we will discuss your situation with you in detail, free of charge, and present you with a variety of options that could help alleviate your financial pressures.

All of this is part of what we call “The R Plan” and you can download a free copy of our R Plan brochure right from our web site at

www.afarber.com/cms/en/brochure

You can also call us toll-free from any area code by dialing 310-1100.

Help is available for your debt problems. Let us know how we can be of assistance to you.

Farber Trustee Andy Fisher interviewed by CBC News

Bankruptcies declined 11% in 2010

CBC News

The total number of Canadian businesses and individuals claiming bankruptcy dropped 11.5 per cent in 2010 compared to the previous year, new data released Friday shows.

The Office of the Superintendent Of Bankruptcy Canada said consumer involvencies were 11 per cent lower last year over 2009, while commercial insolvencies declined by 22.3 per cent.

The term insolvency refers to people who undergo formalized bankruptcy proceedings, but also those who make a proposal to creditors — an attempt to pay back the terms of a loan under newer, less onerous terms. It is generally less rigid than a formalized bankruptcy process.

‘People were living on the edge.’—Andy Fisher, bankruptcy trustee

A full 96 per cent of the 140,234 insolvencies last year were by consumers. That has been the trend for several years, not only because there are more people than businesses in Canada, but also because businesses tend to come in to deal with the problem a lot sooner, says Andy Fisher, a partner with bankruptcy trustee A. Farber & Partners Inc.

“People were living on the edge,” he said. “On the corporate side, companies were already in a good position to be able to prepare for the recession as it came in. They got their debt structured to manage unexpected changes.”

A lot of times when a company goes under, it just closes its doors. That never gets recorded as an “official” bankruptcy, he notes.

Figures improve in subsequent months

In September 2009, Ottawa changed the bankruptcy act to make it more flexible. The changes might not be having much an impact on the number of filers overall, but it’s changing the mix of proposals versus bankruptcies, Fisher suggests.

Early indications are that’s exactly what’s happening, as 31.3 per cent of consumer insolvencies last year were proposals, not firm bankruptcy filings. That’s an increase from the 21.6 per cent in 2009.

The figures also show an improvement as the months went on. Bankruptcies and proposals decreased by 16.7 per cent from November to December, for example.

It’s worth noting, however, that the total number of bankruptcies is still 20.6 per cent higher than it was during the 12 months ended in September 2008 that preceded the recession.

“The total figure was down 11 per per cent, which is encouraging, but we’re still talking about 140,000 bankruptcies here,” Fisher said. “We’re still busy and unfortunately, we’re still seeing a lot of people coming in.”

An excellent question from an undischarged bankrupt

I received a terrific question recently from an undischarged bankrupt who had been dealing with another Trustee firm and didn’t know how to finalize his process.  He informed me that he had filed for bankruptcy protection in 2004 but failed to fullfill all of his duties under the Bankruptcy and Insolvency Act (otherwise known as the BIA).  Specifically, and sadly, he had failed to attend his two credit counselling sessions because they had conflicted with his work schedule.

Not fullfilling your duties in a bankruptcy scenario means your Trustee loses the power to discharge you from your debts, and you effectively are in a state of financial limbo.

This debtor told me he had attempted to open a bank account at one of his former creditor’s branch locations and all kinds of bells and whistles started going off, even though the bank’s computer screen indicated the original debt had been “written off.” That information led this debtor to believe, incorrectly, that there was some form of closure to his former debts.

When a creditor “writes off” a debt, it has nothing at all to do with a bankruptcy filing. Writing off a debt means the bank has essentially “eaten” the debt and realizes it will not be able to recoup it.

And if this debtor didn’t fullfill all of his duties under his bankruptcy, and did not attend any subsequent court proceedings, he would need to speak with his Trustee to determine what items remained outstanding and get them completed (i.e. finish paying his fees, attend counseling sessions, provide tax info, provide monthly income reports and any outstanding asset information) before his Trustee or the bankruptcy court will issue a discharge to him.

It is probably not prudent to try to conduct business with a former creditor anyhow, whether discharged or not. Despite what may appear on a person’s credit report, creditors themselves keep detailed records of bad debts and would rarely accept a discharged debtor as a client again.

The simple answer is this: There has been no closure to this debtor’s former debts, and he is still on the hook to complete his duties to the bankruptcy court and his Trustee.

I strongly recommended that he contact his Trustee as soon as possible to make arrangements to clean up this situation so he can put his debts behind him and get a fresh financial start.

Do you have a question about bankruptcy and insolvency?  Please post it here, or on our Twitter feed at  @rplan and we will be happy to answer it for you.

My depressing job is anything but: reflections of a Bankruptcy Trustee

I am often told by people who come to see me that “it must be depressing doing your job.”  That “listening to people’s challenges and issues every single day must be awful.”

In reality, I couldn’t disagree more.  I remind these clients that it would be taxing on me if there wasn’t a solution for their financial pressures, or some helpful guidance I could offer them.

If my only answers to people’s unfortunate stories was “wow, that’s terrible,” then I believe my days would be very tiring and frustrating.  However, since I CAN help I find being a bankruptcy Trustee an incredibly-rewarding profession.

Preserving the family home and repairing monthly cash flow are obvious examples of the inpact of our popular R-Plan, but the less obvious, and even more rewarding, impact is the preservation of a marriage (and keeping a family together and emotionally healthy as a result) or of a business that can refocus and continue to provide employment and peace of mind.

So is my job “depressing?”  Nothing can be further from the truth.

How To Get Out Of Debt Fast

There’s nothing like worrying about the monthly bills to inject some major stress into your life and your relationships.  You can easily spend more time worrying about your finances than you will about your family… or yourself.  But remember: The sooner you address your financial pressures, the more options are available to you.

For example, if you act early enough you could utilize the services of a financial professional who could provide you with helpful financial and budget counseling.  You may also qualify for a consolidation loan if your debt level isn’t too extreme.  And if things get really tight you could call upon the services of a Certified Insolvency Repair Professional (also known as a Bankruptcy Trustee).

Most people, for obvious reasons, don’t want to hear the “B-Word” (as Bankruptcy is otherwise known).  That’s a fair reaction since Bankruptcy is really a last resort for someone in debt.  It’s the final option when all other possibilities have been exhausted.

The goal here is to do the very best you can under the circumstances you’re encountering, not the worst you can.  An alternative to bankruptcy protection could be a government-supervised repayment plan, or Consumer Proposal.

A Proposal is administered by a Bankruptcy Trustee but it’s NOT a bankruptcy. But by harnessing the power of the Bankruptcy Insolvency Act (the B.I.A.) to oversee the Consumer Proposal, this powerful legislation allows you to meet your debt obligations half-way (normally the balance owing is discharged at the time the Proposal is completed) while giving you the same legal protection from your creditors as a bankruptcy.  The result is a quick (and manageable) solution to the financial pressures you are experiencing.

By accessing an innovative financial solution, such as a debt repayment plan or a Consumer Proposal, you can take control of your money problems, allowing you more time to focus on your family, your household and yourself.

And that’s how you get out of debt fast!

Gen Xers Are Racking Up Debt But Not Saving

Gen Xers Carrying Too Much Debt, says recent survey

Not that this will come as a surprise to most people, but it was revealed in a recent survey by the Investors Group that Gen Xers (Canadians aged 30 – 45) are grappling with higher mortgages and more credit card debt that their parents’ generation.

It seems Gen Xers, with their higher income potential, post-secondary education and lack of pension plan investments, are buying more and saving less.  And racking up major credit card debt and mortgage debt in the process.

The study quotes Tom Moran of Investor’s Group as saying “you want to own the house, you don’t want the house to own you.”

How can Gen Xers solve this problem?  First, pay down the credit card debt as soon as possible.  Secondly, begin putting funds aside in a RRSP for retirement.  Third, pay down the mortgage debt.   The end result will be no high interest rate debt accumulating (i.e. credit cards and department store cards), an asset that you fully own (your house) and retirement funds in the bank to fall back on once you reach retirement age.

It’s never too late to start this process but it’s always better to initiate it as early in life as possible.  That’s why 30 – 45 year olds are in a dangerous position.  They’re not that far away from retirement and they’re accumulating too much debt along the way.