BANKRUPTCY FILINGS FREE PUBLIC RECORDS: WILL FREE SEARCHES TURN YOU INTO A PERSONAL BANKRUPTCY RECORDS SLEUTH FOR THE TRUTH

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After writing and recording this blog, the Office of the Superintendent of Bankruptcy issued a position paper on measures to limit public disclosure of personal information while meeting legislative requirements to establish a public record.  So watch next week for our video and blog titled “ONLINE BANKRUPTCY SEARCH:  THIS CANADIAN INSOLVENCY RECORDS SEARCH RENEWAL (IRS) WON’T CHASE YOU FOR MONEY!” where we will describe what they have advised to date.

Bankruptcy filings free public records:  Introduction

Ottawa’s planning to drop the $8 online search cost for personal bankruptcy records. The change to bankruptcy filings free public records may make it harder for some people.  Especially those with earlier economic problems to get a job or a home.

Bankruptcy filings free public records:  No cost personal bankruptcy records search

The Office of the Superintendent of Bankruptcy Canada is updating its online bankruptcy document search that allows users to get access to public documents on bankruptcy estates.  Their database allows users to search online for bankruptcies as well as receiverships. The have not explained yet why they are considering dropping the search cost so that the information becomes bankruptcy filings free public records.

Bankruptcy filings free public records:  Why does a licensed insolvency trustee need to search for bankruptcy filings

A licensed insolvency trustee (LIT) maintains an account with the Superintendent of Bankruptcy.  A LIT is allowed to do a bankruptcy search through its account for free.  The bankruptcy system requires a LIT, prior to accepting either a personal bankruptcy or consumer proposal file, to do such a search.

The reason is that a LIT is required to find if the person considering filing has ever used the Canadian insolvency system before.  If they have, what were the circumstances and what was the outcome?

This is important because one aim of the Canadian insolvency system is rehabilitating the honest but unfortunate debtor.  For the person who is currently in financial trouble, the LIT must understand past problems, if any.  The LIT must also find if the current problems are a result of the same behaviour and reasons as in the past or something different.  

The LIT then has a duty to take all these factors into consideration when advising the person what their options are and the recommendations the LIT will make.


Bankruptcy filings free public records:  Who else normally searches bankruptcy filings public records?

Right now, for $8 per search, employers, property owners, marketers or just meddlesome neighbors can conveniently access minimal information about an applicant’s, occupant’s or neighbour’s bankruptcy data.  This will allow them to make assumptions about that person’s financial problems, credit worthiness or even trustworthiness.  

The problem in doing so is that it is without proper context.  If the federal government eliminates the $8 search fee, personal bankruptcy records can be searched for free.

Bankruptcy filings free public records:  Reasons for personal bankruptcy

There can be many reasons why a person filed either a consumer proposal or for bankruptcy; divorce, illness, accident or plain overspending are just a few of the possibilities.

Bankruptcy filings free public records: What will personal bankruptcy case records search show us?

A search only tells the:

  • date when the specific person filed for bankruptcy or the consumer proposal;
  • overall worth of their assets and obligations;
  • name of the LIT;
  • whether they successfully completed their consumer proposal or obtained their absolute discharge from bankruptcy; and
  • discharge date of the LIT.
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    bankruptcy filings free public records


Bankruptcy filings free public records: Will this change to find personal bankruptcy records mean anything really?

The $8 cost likely limits random searches.  A potential employer or landlord will not be deterred by this cost, but a nosy neighbour will be.  This charge therefore provides some small security to personal information.

I believe the federal government earns about $4 million a year in bankruptcy search fees.  That $4 million annually is a rounding error in terms of the size of the federal government’s budget.

However, in times where our Prime Minister Trudeau and our Finance Minister Morneau are looking to increase revenue, why give away $4 million? The government could use some of that  money to give financial education to Canadians.

For the reasons I stated above, I doubt dropping the $8 search fee will increase the number of searches.  You still have to know how to do the search.  Nosy neighbours probably won’t spend the time to learn.  

Equifax and TransUnion pay the Superintendent of Bankruptcy to get access to the bankruptcy search records.  Therefore, the bankruptcy or consumer proposal information is available, if granted authorization, by obtaining a person’s credit report.

The Superintendent of Bankruptcy stated it will certainly protect the documents from trolling marketers.  Exactly how they will do this has not been described.  They also have not yet made public the date the searches will start to be free.

Bankruptcy filings free public records:  Take our free consultation before your name appears in a Canadian bankruptcies search

If you have actually been declined for a loan through a normal lender, then that is a signal that you have debt concerns that have to be handled.
Contact Ira Smith Trustee & Receiver Inc. today. We are professional trustees.  As such, the Canadian government licenses and supervises us. First, we will assess your situation and help you to come to the very best possible solution for your troubles.

When you come to us for your free consultation, we first check and figure out with you if one of the bankruptcy alternative choices is best for you.  These include credit counselling, debt consolidation or a consumer proposal.  If none of those options are available to you, only then will we discuss the bankruptcy route. Starting Over, Starting Now we can help recover you to financial health.

After writing and recording this blog, the Office of the Superintendent of Bankruptcy issued a position paper on measures to limit public disclosure of personal information while meeting legislative requirements to establish a public record.  So watch next week for our video and blog titled “ONLINE BANKRUPTCY SEARCH:  THIS CANADIAN INSOLVENCY RECORDS SEARCH RENEWAL (IRS) WON’T CHASE YOU FOR MONEY!” where we will describe what they have advised to date.

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INTEREST RATES IN CANADA: ARE YOU WORRIED THAT HIGHER INTEREST RATES WILL CAUSE YOU UNDUE FINANCIAL HARDSHIP POSSIBLY CAUSING BANKRUPTCY

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Interest rates:  Introduction

Canadians have been on a borrowing binge due in large part to very low rates. But, the tide is beginning to change and interest rates, although still low, are beginning to creep up. This rise in rates is making many Canadians very nervous. For some, it could cause serious financial hardship.

Interest rates:  The threat of rising interest rates

Forum Research Inc. conducted a survey after the Bank of Canada raised rates in September and the results are quite interesting:

  • 60% of young people are at least somewhat concerned by the prospect of rising rates
  • Over 50% of Canadians think that rising rates will negatively impact their personal finances
  • 35% of Millennials aged 18 to 34 have no savings at all
  • Only 26% have an emergency fund
  • 12% expressed concern that more rate hikes were on the way and that the impact would be extremely negative

Interest rates:  “It was almost like money was free”

In theory, higher interest rates should provide an incentive for Canadians to save more, but the long period with low rates have taken their toll on many. “Rates were so low for so long, it was almost like money was free,” said Forum Research president Lorne Bozinoff in an interview. “Some may have overextended themselves during that time, thinking rates will never go up.”

Interest rates:  How will you cope with higher interest rates?

The question now is how will Canadians cope with higher rates? “Some households might not be able to afford an increase,” says Frances Donald, senior economist with Manulife Asset Management. “And this is where we can see defaults, first on auto loans and then on housing.”

Interest rates:  Are you worried about defaulting?

Are you worried about defaulting on your loans or mortgage? Are higher rates causing you financial hardship?  There’s no time to waste. Contact Ira Smith Trustee & Receiver Inc. today.

We approach every file with the attitude that your financial problems can be solved given immediate action and the right plan. Together we will explore with you all the bankruptcy alternatives available to you.  I know that we can help you get back on solid financial footing, the same way we have helped many others just like you, Starting Over, Starting Now.undue financial hardship trustee rising interest rates Ira Smith Trustee interest rates canada interest rates higher interest rates financial problems default on mortgage default on auto loan borrowing binge bankruptcy alternatives Bankruptcy bank interest rates canada

FILING FOR BANKRUPTCY PROTECTION: THE WEINSTEIN COMPANY RETAINS ATTORNEYS FOR POSSIBLE BANKRUPTCY PROTECTION FILING

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Filing for bankruptcy protection:  Introduction

As Harvey Weinstein claims transform from a few into an avalanche, several of the loan providers backing his named firm have actually started speaking to bankruptcy advisors, say sources knowledgeable about the issue.  They are concerned that The Weinstein Company (TWC) may be filing for bankruptcy protection.  Why you ask?  I will explain below.

Filing for bankruptcy protection:  Everyone is lawyering up

A team of The Weinstein Company’s financial institution loan providers have involved restructuring lawyers from Sidley Austin to work as advisors in case of a filing for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. They have actually likewise held pitches to work with an economic consultant to give calculated restructuring guidance.

TWC has retained the law office of O’Melveny & Myers, while Moelis & Company is acting as economic consultant to the board.    The firm has involved FTI Consulting, a financial advisory and restructuring firm.

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Filing for bankruptcy protection:  Can The Weinstein Company borrow any more?

TWC has actually been attempting to raise money.  It has also tried to offer itself totally to a brand-new financier. Talks have not yet produced a deal. Also if it locates a purchaser, a sale might have to be applied in the context of a bankruptcy, to “clean” the assets from the mounting claims against TWC.

Filing for bankruptcy protection:  What are its chances of a successful restructuring?

The Weinstein Company has long shot of restructuring, however filing for bankruptcy protection would certainly provide possible purchasers the chance to buy its movie collection and other assets free from the claims against both Harvey Weinstein and TWC.

TWC might use bankruptcy court approved public auctions to discover purchasers and after that make use of those sale proceeds to establish a fund against which claims can be made and sorted out by the bankruptcy trustee.  TWC is certainly going to meet claims over its failing to stop Harvey’s transgressions.

Filing for bankruptcy protection:  Is The Weinstein Company brand too toxic for it to survive?

TWC has borrowed millions of dollars in the last few years.  It now faces the real possibility that its now-toxic brand name will materially influence future company chances of survival in the longer term.  The cases associated with Weinstein’s alleged sex-related criminal offenses will probably result in adverse annual report reporting obligations.  This will further worry TWC’s lenders.

Filing for bankruptcy protection:  Watch for all the lawsuits – even the ones not involving sex!

Harvey Weinstein has actually currently filed a claim against the business, looking for accessibility to his earlier company e-mail account to strengthen his defense against the sexual harassment claims against him. A bankruptcy would likely leave behind just a shadow of the firm that might really well have no choice but to file a claim against Harvey Weinstein for sinking the company.  In other words, what we have here is The Weinstein Company horror movie.

Filing for bankruptcy protection:  Does your company have too much debt?

Is your company insolvent and needs to restructure?  Is your business viable but can only employ people and carry on business if it can restructure its debt?  Contact the Ira Smith Trustee & Receiver Team. If we meet with you early on, we can create a restructuring and turnaround strategy.  That way your company won’t have to be like The Weinstein Company.

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EMERGENCY FUND SAVINGS STRATEGY: ARE YOU SPLURGING INSTEAD OF SAVING?

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Emergency fund savings strategy:  Introduction

All of the financial experts stress the importance of saving, and they’re right. We’ve frequently blogged about it. We have also talked about the need to maintain an emergency fund savings strategy.  Saving creates a solid foundation for living and for securing a comfortable retirement.  In fact saving can even be taught to pre-school aged children.

Emergency fund savings strategy:  Angus Reid Forum and Capital One survey

Sadly all this talk seems to be falling on deaf ears. According to a survey conducted by the Angus Reid Forum and Capital One, 33% of Canadians admit they don’t put anything into their savings on a monthly basis. And, instead of saving, they’re splurging on non-essentials.

Emergency fund savings strategy: What are Canadians splurging on?

The Angus Reid Forum and Capital One survey found that Canadians seem to really enjoy indulging themselves. And the amount of money they spend on these non-essentials really adds up.

  • 72% dine out several times/month
  • 71% regularly order takeout
  • 50% buy daily coffees
  • 44% are online shoppers
  • 33% indulge in clothing purchases
  • 23% spend on beauty services

Emergency fund savings strategy: Why is it so easy to splurge?

We now live in an almost cashless society. “It’s easier than ever to order in, hail a ride and shop online without ever opening your wallet, but you can lose sight of where your money is going if you’re not careful,” Capital One Canada CEO Brent Reynolds said in a news release. Years ago it was easy to keep track of what you spent because every time you made a purchase you had to pay with cash; if you didn’t have the cash, you didn’t make the purchase.

Emergency fund savings strategy: How can you get back on track if you’ve been overindulging?

There’s nothing wrong with splurging once in a while, as long as you’re saving. Make a budget and stick to it. Save before you splurge. Create an emergency fund for unexpected expenses or changes in your employment situation. Have a plan for your retirement.

Emergency fund savings strategy: Do you have too much debt?

If you’ve really overindulged and you’re at the stage where you can’t make your monthly payments, you need professional help; and you need it now. Contact a professional trustee.

The Ira Smith Team has a cumulative 50+ years of experience helping people who are facing a financial crisis and we deliver the highest quality of professional service. Make an appointment for a free, no obligation appointment today and Starting Over, Starting Now you’ll take your first steps towards financial freedom.

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SEARS CANADA DEFINED BENEFIT PENSION PLAN SHORTFALL: MP SCOTT DUVALL COMES THROUGH ON HIS PROMISE IN CANADIAN PARLIAMENT

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Sears Canada defined benefit pension plan shortfall:  Introduction

On November 6, 2017, Hamilton Mountain NDP MP Scott Duvall rose in the House of Commons for leave to introduce  Bill C-384. It is titled “An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (pension plans and group insurance programs)”.  Mr. Duvall’s motivation was the Sears Canada defined benefit pension plan shortfall.

Sears Canada defined benefit pension plan shortfall:  Hamilton Mountain MP Scott Duvall introduces Private Member’s Bill C-384

Here is what Mr. Duvall said:

“Mr. Speaker, I would like to take this time to thank my seconder, my colleague who has done great work and works very hard in this House, and who has also helped me a lot on this bill.

I rise today to introduce a private member’s bill titled, an act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act. This bill will amend the Bankruptcy and Insolvency Act and the CCAA so that companies will have to bring any pension plan fund to 100% before paying any other secured creditors. It also makes amendments to require companies to pay any termination or severance pay owing before paying any secured creditors.

Other amendments will prevent a company from stopping the payment of any post-retirement benefits during any proceedings under the BIA or CCAA. These amendments will inject some fairness into a process that often sees the interests of workers, retirees, and their families placed behind all others.

We must fix the imbalances in current legislation and provide Canadian workers, retirees, and their families with the protection they expect and deserve. I am hopeful that all my colleagues in Parliament will put aside their partisan differences and support this bill. Canadian workers, retirees, and their families deserve no less.”

Although he did not mention it specifically by name in the House of Commons, Mr. Duvall has said that he would introduce such a Bill as a result of the Sears Canada defined benefit pension plan shortfall.

Sears Canada defined benefit pension plan shortfall:  Hamilton Mountain MP Scott Duvall walks the walk

In our September 27, 2017 blog, TORONTO BUSINESS BANKRUPTCY PROTECTION: NDP WANTS FEDERAL INSOLVENCY LAWS CHANGED SO THERE IS PENSION PLAN SECURITY WHEN FINANCIALLY TROUBLED BUSINESSES FAIL, we told you that Hamilton Mountain MP Scott Duvall, the NDP pension plan critic, informed a group at the United Steelworkers’ Hall that he will present a private member’s bill to secure employees’ pension plans and benefits, and pressure business to offer termination or severance pay, prior to paying secured lenders.  

With his Bill C-384, Mr. Duvall has lived up to his promise.

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Sears Canada defined benefit pension plan shortfall:  This is actually the second Bill attempting deal with  this problem

In our November 1, 2017 blog, SEARS CANADA CLOSING: POLITICIANS WANT NEW LAWS TO PROTECT PENSIONERS DUE TO SEARS CANADA CLOSING, we reported that Bloc Québécois MP Marilène Gill’s Private Member’s Bill C-372,  passed First Reading.  That Bill is titled “An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (pension plans and group insurance plans)”.  In that blog, we described the provisions included in that Bill.

Like Mr. Duvall, Ms. Gill is trying to pass legislation to avoid another Sears Canada defined benefit pension plan shortfall insolvency situation.

Sears Canada defined benefit pension plan shortfall:  What does Bill C-384 actually say

The purpose of this blog, is to describe the terms of Mr. Duvall’s Bill.

Mr. Duvall’s Private Member’s Bill C-384 passed First Reading.  It is very similar to Ms. Gill’s BIll C-372.  He wishes to amend the Bankruptcy and Insolvency Act (BIA) as follows:

  • In order to be approved by the Court, a corporate restructuring proposal under the BIA, for a company with a prescribed pension plan,  the Proposal must include payment in full of any unfunded pension liability or solvency deficiency.  The amount is calculated at the time of the filing of the Notice of Intention To Make A Proposal (NOI) or the Proposal if there is no NOI filed.
  • New section 69. 7 be added to the BIA that in the restructuring proposal of an employer, upon filing, until the discharge of the Licensed Insolvency Trustee (LIT), or the insolvent employer becomes bankrupt, all amounts that the employer must contribute under any arrangement for the benefit of the employees, must continue throughout the restructuring period. This would cover any pension plan, health, injury or accident plans and group insurance coverage.
  • The unfunded pension liability or solvency deficiency calculation is called “special payments” in Bill C-384.  The calculation is by section 9 of the Pension Benefits Standards Regulations, 1985.
  • In a receivership, the receiver is personally liable for paying any unfunded pension liability or solvency deficiency.  However, the receiver’s liability is only from the proceeds of the sale of current assets.
  • In either a receivership or corporate bankruptcy, the charge for any unfunded pension liability or solvency deficiency would rank ahead of the charge of any other secured creditor.  It is interesting to note that the Bill does not attempt to provide such a security ranking to anything other than the pension liability or solvency deficiency.
  • The Officers and Directors of the company are not entitled to the benefit of this secured charge.  Even if they are participants in the pension plan that has the unfunded pension liability or solvency deficiency.
  • New subsection 136(1) (d. 001) to the BIA, creating an extra class of preferred creditor.  A preferred creditor is an unsecured creditor who ranks ahead of the ordinary unsecured creditors and ranks after the secured creditors.  The Bill states that it would say that the amount of any termination or severance pay owed to an employee by a bankrupt employer, less any amount previously paid by the LIT, would rank in priority right after the wages owed to the employee.  
  • There are also proposed amendments to the Companies’ Creditors Arrangement Act (CCAA) in Bill C-384.  It is to bring the same changes in that statute as those to the BIA described above.  The intent is that the treatment under both statutes is the same.

Sears Canada defined benefit pension plan shortfall:  Now it is up to Justin Trudeau and his Liberal Party

We will now have to wait and see what happens to both Ms. Gill’s and Mr. Duvall’s Private Member’s Bills.  As we previously reported, it is unusual that a Private Member’s Bill becomes real legislation. As the Liberals hold a majority in Parliament, if they don’t want it, or a revised Bill for the same purpose, to pass, it won’t.

Sears Canada defined benefit pension plan shortfall:  Does your company need a restructuring and turnaround plan?

Is your company insolvent and needs to restructure?  Is your business viable but can only employ people and carry on business if it can restructure its debt?  Contact the Ira Smith Trustee & Receiver Team. If we meet with you early on, we can create a restructuring and turnaround strategy.  That way your company won’t have to be like Sears Canada closing.

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CREDIT CARD DEBT PROBLEMS: ARE YOUR LOYALTY REWARDS CREDIT CARDS GETTING YOU INTO DEBT?

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credit card debt problems

Credit card debt problems:  Introduction

Canadians obsess over loyalty programs, which contributes to credit card debt problems.  The only way to get more points and rewards, is to keep buying things with the loyalty program credit card.

It’s no surprise since we’re constantly bombarded with advertisements telling us that we can get FREE trips, movies, discounts, merchandise; who could resist such tempting offers? From airlines to fast food chains, it seems that new loyalty programs are cropping up faster than weeds in your garden.

Credit card debt problems:  Would you like 10% off your purchase today?

How many times have you gone to make a cash or debit purchase and be told, “If you sign up for our credit card today, we’ll take 10% off your purchase”? Pretty soon you’ll be signed up to a stack of loyalty credit cards trying to accumulate enough points for all of those wonderful things that you’re planning to get free.

Credit card debt problems:  How obsessed are Canadians with loyalty credit cards?

  • There are 130 million loyalty memberships in Canada.  This averages out to more than four memberships per person (2015 study from Colloquy Loyalty Census Canada).
  • Canadians are currently hoarding $16 billion worth of points.  This is an average of $629 per person (Bond Brand Loyalty).
  • The number of loyalty memberships per Canadian has grown 25% since 2013 (Bond Brand Loyalty).

Credit card debt problems:  Here are our top 3 risks associated with loyalty credit cards

  1. The more credit cards you apply for the worse your credit score can become. Every time you apply for credit the lender requests a credit score. Each inquiry places a record on your credit report Too many inquiries is often associated with higher rates of default.
  2. You may get sucked into the cycle of buying things because of the amount of points you’ll get. Have a good look at your credit card statement and be honest about how many items you bought because of the points.
  3. Are you paying your balance in full every month? If not, the high interest you’re paying will more than wipe out any benefit you’re getting. These discounts may be costing you a lot of money and the free stuff could actually be quite expensive.

Credit card debt problems:  Are you caught in the loyalty credit card trap?

Is your obsession with accumulating points getting you into credit card debt problems? If so, you need professional help and you need it now. Contact the Ira Smith Team. We can help you get out of credit card debt problems, or any other kind of debt problem.  We will put you back on track to debt and stress free living Starting Over, Starting Now. Book an appointment for a free, no obligation consultation today and take the first step to ending the cycle of debt.

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SEARS CANADA CLOSING: POLITICIANS WANT NEW LAWS TO PROTECT PENSIONERS DUE TO SEARS CANADA CLOSING

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Sears Canada Closing: Introduction

Following the Sears Canada failed restructuring, is the Sears Canada closing of all stores.  It is leaving 16,000 retirees unclear about the future of their underfunded pension plan.  Support is expanding for brand-new laws to better protect Canadian workers during a company’s collapse.

Sears Canada Closing: What CARP has to say

CARP, a nationwide not-for-profit group formerly called the Canadian Association for Retired Persons, was recently on Parliament Hill to meet dozens of MPs as it lobbies for law adjustments.

Wanda Morris, vice-president of CARP, stated that CARP is requesting for the unfunded pension liability be provided priority position so it goes to the front of the line.

Pensioners hold no priority when it pertains to dividing up assets through a bankruptcy, and Ms. Morris wants protection for retirees for underfunded defined benefit pensions when the company goes through a restructuring or into bankruptcy.

Ms. Morris stated that along with the practically 16,000 retirees at Sears, CARP estimates that there are about 1.3 million workers in Canada that possibly could be in danger with defined advantage pension.  Sears Canada closing all stores has made the plight of retirees a front and centre issue for CARP.

Sears Canada Closing: Private Member’s Bill C-372 passes First Reading

On Oct. 17, Bloc Québécois MP Marilène Gill suggested a member’s bill, C-372.  The intent is to change the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act.

The change attempts to correct the injustice dealt with by retired workers whose pension as well as group insurance policy benefits are not secured when their company declares bankruptcy or undergoes restructuring.  The changes are a result of the Sears Canada employees and retirees treatment, as a result of Sears Canada closing locations.

Sears Canada Closing: What the NDP has to say

Hamilton Mountain MP Scott Duvall plans to introduce his very own private member’s bill to try to solve this problem. While he notes he has actually had talks with Gill, he claimed his suggestion will be a bit different.

Mr. Duvall specifies that his bill will amend the regulations from where it’s worded currently. He wishes that when a company goes into bankruptcy protection, the pensioners will be a secured creditor.  He is also responding to the process which has led to Sears Canada closing store locations, 

Sears Canada Closing: Bloc MP Marilène Gill and her Bill C-372

On October 17, 2017, MP Marilène Gill rose in Parliament and stated:

“Mr. Speaker, I have the honour to introduce my first bill in the House today, a private member’s bill that seeks to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act.

This bill seeks to correct the injustice faced by retired workers whose pension plans and group insurance plans are not protected when their company goes bankrupt or undergoes restructuring.

I will do everything in my power to ensure that this bill receives royal assent, that way, we can help prevent retirees, like those from my riding who are here today to support me, from losing their pensions, and improve the existing legislation by giving pension plans’ unfunded liabilities preferred creditor status, among other things. I hope my colleagues will be supporting this bill.”

BILL C-372 which passed First Reading on October 17, 2017 is named “An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (pension plans and group insurance plans)”.  

Private member’s bills such as this one rarely pass the House.  However, I thought it would be useful to describe what Ms. Gill’s views are as a result of Sears Canada closing.  

Below is my analysis of how BILL C-372 proposes to amend the Bankruptcy and Insolvency Act (Canada) (BIA) and the Companies’ Creditors Arrangement Act (Canada) (CCAA).  The impetus of course is certain high-profile corporate restructurings/failures with underfunded defined benefit pension plans.  With Sears Canada closing, Ms. Gill put forward her private member’s bill.

The most recent corporate failure which initiated her private member’s bill of course was a result of Sears Canada closing.

Sears Canada Closing: Bill C-372 proposed BIA and CCAA amendments

Bill C-372 wishes to amend the BIA as follows:

  • In order to be approved by the Court, a corporate restructuring proposal under the BIA, for a company with a prescribed pension plan,  the Proposal must include payment in full of any unfunded pension liability or solvency deficiency calculated at the time of the filing of the Notice of Intention To Make A Proposal (NOI) or the Proposal if there is no NOI filed.
  • The unfunded pension liability or solvency deficiency calculation is by section 9 of the Pension Benefits Standards Regulations, 1985.
  • In a receivership, the receiver is personally liable for paying any unfunded pension liability or solvency deficiency but only from the proceeds of the sale of current assets.
  • In either a receivership or corporate bankruptcy, the charge for any unfunded pension liability or solvency deficiency would rank ahead of the charge of any other secured creditor.
  • The Officers and Directors of the company are not entitled to the benefit of this secured charge.  Even if they are participants in the pension plan that has the unfunded pension liability or solvency deficiency.
  • In a corporate restructuring proposal or bankruptcy, the amount not paid under the Wage Earner Protection Program Act (Canada) (WEPPA).  It is the amount to adequately indemnify the beneficiaries in the event the employer ceases to take part in a group insurance plan.  Such a plan is one that provides for the payment of benefits to, or in respect of, employees or former employees for, among other things, life, disability, health or dental insurance is a preferred claim.  It will be a preferred, but still an unsecured claim.
  • The amount equal to the difference between any severance pay or compensation in lieu of notice owed by an employer to an employee and any amount previously paid by the trustee for that severance pay or compensation in lieu of notice.

There are also proposed amendments to the CCAA in Bill C-372.  It is to bring the same changes in that statute as described above.  The intent is that the treatment under both statutes is the same.  I won’t repeat those again.

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Sears Canada Closing: Will Bill C-372 become law?

As I stated above, it is very rare that a private member’s bill becomes real legislation. The other reason is that the Liberals hold a majority in Parliament.  If they don’t want it to pass, it won’t.

On October 25, 2017, Innovation Minister Navdeep Bains said the Liberal government has no plans to change laws to protect pensioners in the wake of Sears’ bankruptcy.  That is a pretty definitive statement.

So right now it seems there is a lack of political will to make the proposed law amendments.  I suspect that on a financial basis, there will also be opposition for the following reasons:

  • In most cases, it will be impossible to have a successful large corporate restructuring if 100% of unfunded pension liability must be paid.  Therefore, jobs will not be saved if we have more corporate bankruptcy filings instead of restructurings.
  • Lenders will have to now ignore current assets in the borrowing base of corporations.  This will make corporate borrowing much more difficult for solvent corporations with pension plans to carry on business.
  • Lenders may have to reserve the entire amount of any unfunded amounts.  They will rank ahead in a receivership or bankruptcy.
  • Severance pay or compensation in lieu of notice will now be a claim ranking ahead of trade suppliers in a corporate restructuring or  corporate bankruptcy. This may alter the amount of an unsecured credit line a supplier will be willing to give to a customer.
  • It will cause more chaos to normal lending and trade practices which will be a problem for any government.
  • Claims under the group health indemnity provisions may not result in any real benefit to employees of a company going through either a corporate restructuring or bankruptcy.   There is rarely funds left over after the claims of secured creditors.

We will keep monitoring this important issue.  We will update you when MP Scott Duvall puts forward his private member’s bill and as other matters arise.

Sears Canada Closing: What To Do If You Or Your Company Need A Financial Restructuring?

It is now Sears Canada closing time.  If you’re attempting to discover a means to restructure your firm’s debt, so that you can avoid a Sears Canada closing scenario, call Ira Smith Trustee & Receiver Inc. If we meet with you early on, we can create a restructuring and turnaround strategy.  That way your company won’t have to be like Sears Canada closing.

Our strategy for every person is to create a result where Starting Over, Starting Now occurs, starting the minute you walk in the door. You’re simply one telephone call away from taking the crucial steps to go back to leading a healthy, balanced and tension free life.

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CANADA MIDDLE CLASS SIZE: DO YOU FALL INTO THE TRUDEAU MIDDLE CLASS DEFINITION?

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Canada middle class size:  Introduction

Most Canadians think of themselves as being “middle class”; however that seems to be changing. According to an Ekos-Canadian Press poll, Canadians who self-identify as working class poor are on the rise. The increase seems to be at the expense of the Canada middle class size.  This same poll suggests people are feeling more pessimistic about their own futures not just over the next year, but over the next five.

Canada middle class size:  The old Canada middle class definition

We used to define middle class as the median in household net worth, but this too, has changed. Middle class has now morphed into more of a state of mind than a demographic bracket. We now tend to think of middle class as a lifestyle and a value system – hence the expression “middle class values”.

This belief in middle class being a lifestyle is contributing to an increasing debt load for many Canadians. According to a recent CIBC poll:

  • Many Canadians seems uninterested in prioritizing needs over wants
  • Only 50% of those surveyed were willing to cut spending on non-essential items to keep up with bills

Canada middle class size:  Canadian average household debt

The sad truth is that regardless of whether you’re middle class as a demographic bracket or a lifestyle, Canadians are now carrying more debt than those of any other G7 nation. Many are spending as much or more than they earn and as a result spreading things so thin that they’re living paycheque to paycheque.

In a recent survey by Canadian Payroll Association, almost 48% of respondents admitted they wouldn’t be able to make ends meet if their paycheques were late even by a week.

Canada middle class size:  Is your debt pushing you away from the middle class

Are you getting deeper in debt trying to maintain your middle class lifestyle? If so, you need professional help before your house of cards comes tumbling down. I strongly recommend that you contact a professional trustee as soon as possible. Ira Smith Trustee & Receiver Inc. can help, no matter how dire your situation seems. With immediate action and the right plan, we can solve your financial problems Starting Over, Starting Now. Give us a call today.

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POOR CREDIT PERSONAL LOANS GUARANTEED APPROVAL CANADA: REDUCE AND DON’T INCREASE DEBT TO IMPROVE YOUR CREDIT SCORE

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Poor credit personal loans guaranteed approval Canada:  Introduction

Legit companies do not give poor credit loans guaranteed approval Canada. If you’re experiencing significant economic problems and declined for a financing by conventional banks, do not be seduced by advertising that states “… poor credit personal loans guaranteed approval Canada …” even if you have bad credit or no credit.

Poor credit personal loans guaranteed approval Canada:  They try to trick you with seductive marketing slogans

They use catchy marketing tag lines such as:

  • 100% Free, Bad or No Credit, Great Terms, $0 Down, Fast, Apply Now!
  • Borrow Up To $5,000 With Affordable Payments. Find out more & Get Started!
  • No Credit Check Loans. Negative Credit Loans. Payroll Loan.  Payday Loan.

Or they send either an email or letter in the mail offering you a bad credit loan, student loan, mortgage, negative credit score loan, or a fantastic bad credit, credit card offer.

Poor credit personal loans guaranteed approval Canada:  Beware of the scammers!

They may seem to be genuine yet beware! They will certainly ask you for your personal ID and financial info; and that is where your issues will certainly begin.

These are rip-offs! They are victimizing you because they know you are desperate and will not stop until you get the funding from someone for a bad credit loan.

Poor credit personal loans guaranteed approval Canada:  What the Canadian Anti-Fraud Centre has to say

According to the Canadian Anti-Fraud Centre, advertisements that promise guaranteed approval loans generally show up online or in city and national newspapers, magazines and tabloids.  Remember, just by advertising through reputable media outlets does not make the business behind the ad honest or legitimate.

Poor credit personal loans guaranteed approval Canada:  The up-front fee scam

These companies usually ask you to pay an up-front fee before they will start work.  This  fee might vary from hundreds to thousands of $$$.  You rarely get your funding after paying the up-front fee. If you do, it is on the most onerous terms.  You can never get your money back.

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Poor credit personal loans guaranteed approval Canada:  How to fix your bad credit and debt issues

If you have actually been declined for a loan through a normal lender, then that is a signal that you have debt concerns that have to be handled. Companies that advertise poor credit personal loans guaranteed approval Canada are scams.  They are not the solution to your troubles; expert help is.

Contact Ira Smith Trustee & Receiver Inc. today. We are professional trustees.  As such, the Canadian government licenses and supervises us. First, we will assess your situation and help you to come to the very best possible solution for your troubles.

When you come to us for your free consultation, we first check and figure out with you if one of the bankruptcy alternative choices is best for you.  These include credit counselling, debt consolidation or a consumer proposal.  If none of those options are available to you, only then will we discuss the bankruptcy route. Starting Over, Starting Now we can help recover you to financial health.

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CREDIT SCORE IMPROVEMENT: HOW TO HANDLE EVERY CREDIT SCORES CHALLENGE WITH EASE USING THESE TIPS

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Credit score improvement:  Introduction

It seems that we’ve become obsessed with credit score improvement and credit scores. Traditionally the singular purpose for credit scores was to find how much of a risk you would present to a lender if you were applying for a credit card, insurance, loan, mortgage, rental unit, etc.

Now we even use credit scores to decide if your new date is worthy of becoming your new mate and employers use credit scores to screen job applicants. Somehow from determining credit worthiness, credit scores are now being used as a quasi-personality test to find out your character and level of honesty.

Credit score improvement:  Should credit checks be used to screen job applicants?

Credit reports were not designed as an employment screening tool,” says non-profit group Demos. “Employment credit checks are an illegitimate barrier to employment, often for the very job applicants who need work the most.” In a survey of job-seekers, Demos found that one in seven people with blemished credit said that they’d been denied a job as a result.

On the other side of this issue is credit reporting agency, TransUnion. They stand firm on the use of its reports when determining a person’s employability. “One study found a job applicant with a troubled financial history was almost twice as likely to engage in theft as an applicant who lacked any financial history issues,” company spokesperson Clifton O’Neal said in an email.

Credit score improvement:  How is your credit score determined?

There are several factors that go into determining your credit score:

  • Debt history
  • Payment history
  • Amounts owed
  • How long you’ve been in debt
  • Type of debt
  • Length of credit history
  • Credit inquiries

Credit score improvement:  What does your credit score really say about you?

Your credit score means that you’re making your payments on time but it doesn’t tell the story. Many people find themselves in financial difficulty as a result of illness, job loss, divorce or many other factors and that doesn’t make them “undesirables”.

Credit score improvement:  Do you really need debt repair?

Are you in financial difficulty and looking for someone to help you get back on track? Call Ira Smith Trustee & Receiver Inc. We’re here to help, not judge. Make an appointment for a free, no obligation consultation and take your first step to debt free living Starting Over, Starting Now.

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