Target Canada owes more than $5-billion to creditors

Target Canada, Canada Revenue Agency, creditor protection, out of work, Canada, creditor protection, Ira Smith, Ira Smith Trustee & Receiver Inc., Starting Over Starting Now, debt, trustee

Image courtesy of The Toronto Star

This blog about Target Canada is courtesy of the article written by Francine Kopun, Business reporter, The Toronto Star, published on Thursday January 22, 2015.  Our Ira Smith is quoted extensively.

From India to Milton, Target Canada owes money.

Target Canada owes money to nearly 1,800 businesses around the world, from India to Shanghai and Brampton to Winnipeg.

The list runs 44 typed pages. It includes 3greenmoms, makers of eco-friendly sandwich bags in Potomac, MD ($3,751); 20th Century Fox Home Entertainment in Toronto ($3.7-million) and the Banhat Rattan Bamboo Co-operative in Ho Chi Minh City ($1,596).

Target Canada owes $1,926 to the Retail Council of Canada and $433,248 to Roots Canada Ltd. Roots was behind the popular Beaver Canoe line of goods tailor-made for Target Canada.

Target Canada owes Revenue Quebec $6.529-million. It owes more than $12-million to the Canada Revenue Agency.

“Did I see this coming? No,” said Jennifer Carlson, founder, Baby Gourmet Foods Inc., an Edmonton-based company owed $62,701.

Carlson said her first thought, when she heard the news of Target Canada shutting down, was for the employees who would be losing their jobs, and their families.

“Target was a great partner for us and at this point, it’s going to be (about) growing with our other retail partners,” said Carlson.

Target Canada announced last week it was seeking creditor protection as it winds down operations, closing all 133 stores and putting 17,600 people out of work over the next five months.

As of Thursday, all Starbucks operating within Target Canada stores will be closed, a Target spokesman confirmed.

“Generally speaking, the team members will be re-assigned to other areas of the store,” said Target Canada’s Eric Hausman.

Unable to keep shelves stocked and customers interested in their retail offering, Target executives made the decision to leave Canada rather than spend another five years chasing profits.

It has lost about $7-billion on its Canadian operations so far.

On paper, it seems that Target Canada is in a position to pay off all creditors in full, with assets and liabilities both in the $5-billion range. But the true value of the recorded assets is always less than stated, said Ira Smith of Ira Smith Trustee & Receiver Inc.

“Everything gets recorded at original cost — what they paid for the assets. When they do the inventory sale, they will not recoup the original cost. The racking and fixtures, once they shut down, is by the pound,” said Smith.

Some assets listed by Target Canada include credit owing from vendors, but as Smith points out, once Target Canada stops paying the vendors, the vendors won’t be making good on those credits.

What Target Canada will be able to realize from the sales of leases and properties it owns will also likely be less than what they originally paid.

“Who is going to step in and pay what Target Canada did? No one,” said Smith.

Some – not all – the properties leased to Target Canada, were guaranteed by the parent corporation in Minneapolis.

Target Canada likely has its own internal estimate, but that is not something it is going to share, said Smith.

Target Canada has 30 days from the date of filing for creditor protection to present a plan that will satisfy creditors. It may also seek a 30-day extension from the courts, said Smith.

The parent company is owed at least $3.1-billion, but Smith, who has read the filings, said the amount is unsecured.

Contact Ira Smith Trustee & Receiver Inc. before your business problems lead to your business closing. The earlier you begin to deal with debt, the more options you’ll have. We approach every file with the attitude that financial problems can be solved given immediate action and the right plan. Starting Over, Starting Now you can live a debt free life.


Target Canada closing, Target Canada, Target Canada, Target Corporation, Companies’ Creditors Arrangement Act, CCAA, restructuring of insolvent corporations, restructuring and turnaround, business failure, orderly liquidation, Zellers, starting over starting now, financial viability, financial hardship, receivership or bankruptcyTarget Canada closing was announced on January 15, 2015, when Target Canada Co. and related entities commenced court-supervised restructuring proceedings under the Companies’ Creditors Arrangement Act (“CCAA”).  The CCAA, which is a Federal statute normally used for the restructuring of insolvent corporations with debts over $5 million, in order to preserve all or a portion of the business and jobs.  This time, rather than being used for a restructuring and turnaround, it is being used to provide for an orderly liquidation.

What went wrong?  Target Canada is an indirectly wholly-owned subsidiary of the United States-based retailer Target Corporation.  Target Corporation was founded in 1902 as Dayton Hudson Corporation, and is one of the largest retailers in the United States of America.  You would think they had the experience to avoid such a disaster.  It seems that everything went wrong and right now Target Canada estimates that this business failure will result in a loss of $5.4 BILLION!

The mistakes made by Target Canada and its US based parent seem to be very basic.  The mistakes made leading to the Target Canada closing can be summarized in the following 9 point list:

1. Walk before you run – Target Corporation’s  leadership  saw expansion into Canada as an opportunity to extend the Target shopping experience to a broader group of people and thereby expand its revenues and profits. They also believed that there were significant   opportunities in the Canadian market that made their strategies well positioned to succeed.

However, rather than starting off with a few stores in select Canadian markets, they began in 2011 by purchasing the net amount of 135 store leases from Zellers Inc. for a net purchase price of $1.6 billion.  Perhaps a more modest start would not have put so much financial pressure on Target Canada from the very beginning.

This is reason number one leading to Target Canada closing.

2. Failure to implement your plan in a reasonable period of time – Although Target Canada entered Canada in 2011 through the purchase of the leases, they first undertook necessary renovations and leasehold   improvements before Target Canada opened at many of the former Zellers locations under the Target banner.  The first stores did not open until March 2013 – more than 2 years after the decision was made to acquire the Canadian locations.

This obviously gave Target Canada’s competitors a long lead time to plan for the Target invasion.  The major competitors include Wal-Mart, The Bay, Sears, and also major  supermarket  chains  like Loblaws,  electronic  retailers  like Best  Buy and Future  Shop, and home improvement  stores  like  Canadian  Tire,  Home Depot,  Rona and Lowes.

This is reason number two leading to Target Canada closing.

3. Miscalculation of Demand for your Product – The opening of that many stores resulted in market densification – particularly in large cities served by more than one Target store – and reduced the impact of many of the new store openings. There were too many stores for the marketplace.

This is reason number three leading to Target Canada closing.

4. Poor Supply-Chain Management – Target Canada encountered significant supply chain issues. Stores were often: (i) out-of-stock for important merchandise, resulting in consumer dissatisfaction; and  (ii)   over-stocked   on   other   merchandise,   necessitating discounts to manage the inventory and impairing operating margins. These supply chain issues created a poor first impression. Therefore, many potential customers appear to have returned to or maintained the shopping practices they had before Target’s entry into Canada where such problems didn’t exist.

This is reason number four leading to Target Canada closing.

5. Tinkering with a proven model – Canadian consumers expected Target Canada to follow Target’s U.S. prices, which is a significant source of loyalty to the Target brand. Rather than match or reflect the U.S. prices in Canada, its pricing model was designed to compete with other similar Canadian retailers and included generally higher prices than Target’s U.S. stores. This appears to have limited Target Canada’s ability to distinguish itself in the competitive Canadian retail marketplace. It appears to me that Target Canada did not attempt to distinguish itself on a superior customer experience and did not attempt to distinguish itself in its pricing model.

 Many of the Target Canada suppliers, either directly or through related entities, supplied merchandise to both the Canadian stores and Target Corporation’s U.S. stores, and many of those cross-over vendors have operations in Canada.  Couldn’t Target have used its buying clout to not have Target Canada’s pricing model to be the same as its Canadian competitors?

This is reason number five leading to Target Canada closing.

6. No online presence – Need I say any more? Any home-based business owner knows you need to have an online presence today.

Although Target   US has an established and successful online retail business, Target Canada elected to focus on the build-out of the physical  stores  and  improving  store  operations,  and  did  not  prioritize  the establishment of an online retail business for Canadian customers. This turned out to be a significant competitive disadvantage as the retail market moves beyond traditional bricks-and-mortar stores. By the time Target Canada woke up, it was too late.

This is reason number six leading to Target Canada closing.

7. Too little too late – Beginning in Spring 2014,  Target Canada added internal resources and consulted at great length with a variety of strategic, operational and financial advisors in an attempt to improve Target Canada’s operations and identify strategies that could make the Canadian operations viable in the long term.  Target Canada could not identify an option that would result in TCC breaking-even in the next five years.  Were any of these financial viability studies conducted before the net spend of $1.6 billion on leases in 2011?  Would not those same studies have identified what senior executives should have done to have a successful Target Canada launch?

This is reason number seven leading to Target Canada closing.

8. Not understanding the marketplace – In 2011, Canada had a population of 34.4 million. In comparison, this was slightly smaller than the population of the State of California at the same time.  The   financial   returns for Canadian   stores   were   expected   to be   in line with historical   returns for U.S. store openings.  This typically   meant losses until the completion of the first full year of store operations,   and profits thereafter.  Target Canada never made any money.  For the 2013 and 2014 fiscal periods, Target Canada’s losses totalled $3.6 billion (before interest and taxes).

This is reason number eight leading to Target Canada closing.

9. Management – Based on the above, clearly Target management miscalculated the success of an expansion into Canada out of the US. No doubt other US retailers who may be considering an expansion into Canada, must look at this expansion failure before embarking on implement their own expansion into Canada.

This is reason number nine leading to Target Canada closing.

At the time of filing, Target Canada had 17,600 employees.  Because this is an orderly liquidation and not a restructuring and turnaround, those jobs will not be saved as a result of Target Canada closing.  No doubt these job losses will create financial hardship for many of these employees’ families.  To its credit, Target US has established a trust fund for payment of the Target Canada obligations to its employees.  This trust fund is in addition to the proceeds from the sale of the Target Canada assets.

The lessons to be learned from the Target Canada closing story is that every business, regardless of size, must not only have a properly vetted business plan before implementing any business strategy, but management must have carefully studied and tested it to ensure as best as possible that management understands the marketplace it wishes to operate in and that the implementation of the plan will be successful for the business.

Ira Smith Trustee & Receiver Inc. acts for both debtors and secured lenders, in the performance of financial and viability assessments for financially challenged businesses.  The earlier that we are consulted, the better the chances are that we can construct and assist management in implementing its plan to return to financial health without the need for receivership or bankruptcy proceedings.

Contact Ira Smith Trustee & Receiver Inc. before your business problems lead to your business closing. The earlier you begin to deal with debt, the more options you’ll have. We approach every file with the attitude that financial problems can be solved given immediate action and the right plan. Starting Over, Starting Now you can live a debt free life.

Note:  The facts contained herein regarding Target Canada Co. (“TCC”) and Target Corporation, and the expansion of Target Corporation into Canada was derived from the Affidavit of Mark J. Wong, General Counsel and Secretary of TCC, sworn January 14, 2015 in support of TCC’s CCAA application.


Some debts are fun when you are acquiring them, but none are fun when you set about debt, debts, holiday debt, New Year’s resolutions, budget, credit counselling, debt consolidation, consumer proposal, bankruptcy, bankruptcy alternatives, starting over starting now
retiring them.

Ogden Nash

Holiday debt; every year, one of the top New Year’s resolutions is to reduce debt and 2015 is no exception.  In December, Equifax Canada reported that the average Canadian household was $20,891 in debt. In spite of already carrying a dangerously high debt load, many Canadians threw caution to the wind, and without a financial plan and/or a budget, they spent way too much money to burden themselves with holiday debt.

After the spending spree was over, many Canadians made New Year’s resolutions to pay off debt in 2015. CIBC did a poll on Canadian’s financial priorities for 2015 and reported the following:

  • Paying off what they owe: 22%
  • Building savings: 12%
  • Paying bills or getting by: 10%
  • Budgeting or managing day-to-day spending: 9%


No one’s ever achieved financial fitness with a January resolution that’s abandoned by February.

Suze Ormon


The reality is that January has now arrived and so have the credit card bills, with the holiday debt showing up for payment.  You have no idea how you’re going to pay these bills but you made resolutions to pay them.

Without vision you don’t see, and without practicality the bills don’t get paid.

Paul Engle

You need more than resolutions and good intentions to pay off your holiday debt; you need professional help in the form of a trustee. Contact Ira Smith Trustee & Receiver Inc. as soon as possible. If you’re in serious debt, from holiday debt or otherwise,  there are many options including credit counselling, debt consolidation, consumer proposal and bankruptcy. We approach every file with the attitude that financial problems can be solved given immediate action and the right plan for you. Debt is an enemy that can be conquered and Starting Over, Starting Now we can get you back on the path towards a debt free life.

Don’t let holiday debt ruin your 2015 so early in the New Year.  Take positive action by contacting us today!


balanced budget, bankruptcy trustee, budget, financial health, debt, bankruptcy, proposal, credit card debt, trustee, starting over starting nowIn our last bankruptcy trustee blog A Balanced Budget Is To Financial Health What A Balanced Diet Is To Physical Health – Part 1, we discussed the importance of a budget to help you establish your spending limits, reduce your spending and if you stick to your budget, live within your means. This week in A Balanced Budget is to Financial Health What a Balanced Diet is to Physical Health – Part 2, we’ll be discussing a case from our files and explaining how important a balanced budget is when working with a bankruptcy trustee.

When we consult with a consumer debtor, one of the most important things for them to have is a balanced budget. In the cases of bankruptcy or proposal, a balanced budget is not optional; it is a requirement that they present us with a balanced budget as it needs to be filed in the public domain as part of their bankruptcy or proposal. In fact I will not sign off on one that doesn’t balance (except in extenuating circumstances). There are several reasons that a bankruptcy trustee says a balanced budget is a requirement for bankruptcy or proposal:

1. An insolvency filing cuts off access to credit for the debtor so they have to live within their means.
2. It is a requirement of the Act to show rehabilitation.
3. Living off credit is a likely contributor to the financial difficulty in the first place. While a proposal or bankruptcy will settle the present debts, if the lifestyle changes aren’t made the greater problem, chronic debt, won’t be solved.  A bankruptcy trustee has the duty to ensure that rehabilitation has taken place.

From the files of Ira Smith Trustee & Receiver Inc.:  Brian and Julie are married with no children. They can no longer afford their present lifestyle based on their income. Brian works limited part-time hours (and clings to the belief that he needs to be home at all times to work on call so he can work his way up in the ranks). Julie lost her full-time job and is having trouble finding one with equivalent hours/pay. This has been going on for over 2 months now and they have not readjusted their budget to account for the change in income. Although they do not live an extravagant lifestyle, they have become reliant on credit to maintain their lifestyle. Now they are caught in a viscous cycle; they are taking on new debt at a time they are seeking relief from the old debt they can’t pay. The reality is that until they balance a budget, even on a temporary basis, as a bankruptcy trustee, we can’t help with the old debt as they cannot live on their combined family income without incurring more debt. Therefore, they are stuck in limbo.

There are many ways to get into debt, but getting out of debt is not a do-it-yourself project. If you’re experiencing serious debt issues you need professional help from a bankruptcy trustee as soon as possible. Contact Ira Smith Trustee & Receiver Inc. today. Starting Over, Starting Now we can put you back on track to financial health.


balanced budget, financial health, household debt, mortgages, consumer credit, installment loans, credit card debt, debt, starting over starting now, Vaughan bankruptcy trusteeA balanced budget is to financial health what a balanced diet is to physical health.  Where does the money go? Do you feel like you have a hole in your pocket? Is your spending out of control? Statistics Canada reports that Canadian household debt hit a record high during the third quarter of 2014, as it grew at a faster pace than disposable income. The total amount of credit market debt, which includes mortgages, non-mortgage loans and consumer credit, held by Canadian households increased to 162.6% of disposable income during the quarter. That means Canadians owed about $1.63 for every dollar of disposable income in the third quarter. No wonder we’re scrambling. According to Equifax Canada:

  • Debt levels are climbing fast to a record $1.422-trillion in the fourth quarter of 2014.
  • Installment loans, largely made up of car loans, were the fastest growing segment of debt, up 11% year over year.
  • Credit card debt rose 5.9% from a year ago.

Many of us don’t realize the importance of a balanced budget and as a result we live beyond our means and get into financial hot water. A balanced budget is to financial health what a balanced diet is to physical health. Everyone should have a budget. It’s an important money management tool that will show you exactly how much money you receive, how much you spend, what you spend it on and how much you save. It will help you to establish spending limits, reduce spending and allow you to live within your means.

If you’re suffocating under a mountain of debt, contact Ira Smith Trustee & Receiver Inc., your Vaughan bankruptcy trustee, today. One of the most important things when we are consulting with a consumer debtor is for them to have a balanced budget. We will work with you so that Starting Over, Starting Now you can live a financially healthy life. Watch for our next blog – A Balanced Budget is to Financial Health What a Balanced Diet is to Physical Health – Part 2 – when we’ll be discussing a case from our files and how important a balanced budget is when working with a trustee.

I and my colleagues wish you a healthy, happy and balanced New Year.



consumer proposal, bankruptcy, trustee, trustee in bankruptcy, Bankruptcy and Insolvency Act (BIA), debt, Gamblers Anonymous, consumer proposal administrator, AdministratorA Consumer Proposal is THE great alternative to bankruptcy.  From the files of Ira Smith Trustee & Receiver Inc.: Sammy (not his real name), a 31-year old with no dependents, is the family member of a professional that refers work to us. Referrals are always the highest form of compliment because it demonstrates confidence and respect for our professional abilities, and the strength of our personal relationship. Unfortunately Sammy had fallen prey to the world of online gambling and really needed our help.

Sammy was gambling daily and he was using his credit cards to place his online debts. And, as is the case with compulsive gamblers, Sammy was losing and losing big until he had no more credit to gamble with. He couldn’t afford to make more than the minimum monthly payments on his credit cards and he came to the realization that he would never be able to repay his debts.

The Solution: Sammy agreed to perform a Consumer Proposal paying approximately 1/3 of what he owed over a 5 year period and his creditors agreed to the Consumer Proposal.

 What is a Consumer Proposal? A Consumer Proposal is an alternative to bankruptcy, governed by the Bankruptcy and Insolvency Act (BIA). It’s available only to individuals whose total debts do not exceed $250,000, not including debts secured by their principal residence. Working with a trustee in bankruptcy you make a consumer proposal to:

  • Pay your creditors a percentage of what you owe them over a specific period of time
  • Extend the time you have to pay off the debt
  • Or a combination of both

Payments are made through the trustee, who is called the consumer proposal Administrator under the BIA, and the trustee uses that money to pay each of your creditors. The consumer proposal must be paid off within five years.

Additional help and support: We recognized that Sammy had to deal with his gambling addition in order to get out of trouble and stay out of trouble so we insisted that in order for us to support his Consumer Proposal he would have to attend Gamblers Anonymous meetings. Sammy attended Gamblers Anonymous meetings faithfully, stopped gambling, and was able to save enough from his work earnings to pay off his Consumer Proposal 1.5 years ahead of schedule. After completing his Consumer Proposal, Sammy obtained at least one promotion at work, is earning more money, continues to save and was able to purchase a condominium apartment for himself (and qualify for mortgage financing).

You can turn your life around with the will and the right professional help. If you’re experiencing serious financial problems, regardless of the cause, contact Ira Smith Trustee & Receiver Inc. today. Starting Over, Starting Now you can leave the past behind and work towards a bright future.

As the miracle of Chanukah has been celebrated this past week, and as the miracle of Christmas will be celebrated in two days, I hope that this inspirational story of Sammy, last week’s inspirational story of how Molly turned her life around from addiction and debts to health and happiness in Personal Bankruptcy Can Be A Great Beginning and the first inspirational corporate turnaround story from two weeks ago, Restructuring and Turnaround of Corporations Saves Jobs & Companies, provides you with a glimpse of how modern day miracles can occur.  I wish all of our readers Happy Chanukah, a very Merry Christmas, and a healthy, happy, prosperous New Year where we will all write and tell our own inspirational stories.


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Personal bankruptcy is rarely spoken of in a positive light, yet for some it can be a great beginning. Here’s a truly inspirational story of a new beginning from the files of Ira Smith Trustee & Receiver Inc.

Molly (not her real name) was a 41 year old woman who was married with one child. She was well educated and had been a high school chemistry teacher. Sadly, she became an alcoholic and her life fell into ruin. Alcohol had taken over her life and she could no longer work as a teacher. Now unemployed she resorted to using credit cards to buy alcohol and before long her credit cards were maxxed out.

She needed to work to pay for her habit so she went back to community college to become a law clerk. Molly found work as a law clerk but she couldn’t give up drinking. Alcohol was destroying her work life and her personal life. She continued to max out her credit cards and previously obtained lines of credit. To make matters worse Molly couldn’t afford to pay her income tax liability which was greater than what was deducted at source by her employer.

Molly needed to rid herself of her debts so she came to us to file for personal bankruptcy. We knew that for Molly to truly get a fresh start she needed to deal with her alcoholism. We insisted that she join AA if she wanted us to support her discharge from personal bankruptcy. Molly joined AA, attended meetings and stopped drinking. She ultimately became a sponsor to other AA members.

Molly really turned her life around. She stopped drinking, joined AA and lived within her means. As a result of her willingness for overall rehabilitation the Trustee recommended that Molly obtain an absolute discharge from personal bankruptcy, which she did. Molly’s whole life improved including her relationship with her family.

Personal bankruptcy was the start of a great new beginning for Molly and if you’re facing serious debt problems it can be for you too. Contact Ira Smith Trustee & Receiver Inc. today and Starting Over, Starting Now you can turn your life around too.


restructuring and turnaround, corporate restructuring and turnaround, restructuring and turnaround proposal, debt, bankruptcy, trustee, insolvency and restructuring plan, bankruptcy and insolvency act, BIA, starting over starting nowRestructuring and turnaround services can produce great benefits as long as the company recognizes early enough that it has problems.  As the holidays approach, we want to hear feel good stories.  Here is a great feel good story.

There are good news financial stories out there and here is one from the files of Ira Smith Trustee & Receiver Inc. If caught early enough, we can save companies and jobs through corporate restructuring and turnaround services, and avoid bankruptcy.

The Company: Professional services company which had been in business for 16 years and was in need of restructuring and turnaround services.

 Hard Assets: Negligible.

 How The Company got Into Trouble: The principal’s husband was travelling on business for an extended period and she decided to take leave from her business. Rather than using technology, both new and old, to supervise the business while travelling and maintaining financial control throughout, she delegated all responsibility to senior management and senior staff. In the principal’s absence the senior management made a series of decisions that put the Company in serious jeopardy:

  • They leased extra space expecting the need to hire more staff to meet the anticipated increased business, but that business never came.
  • Their rent and staffing costs were too high.
  • Notwithstanding the increased staffing and staffing costs, they also outsourced more work than before.
  • The total costs and liabilities were increasing rapidly while revenue was declining.
  • They neglected to pay the payroll source deductions throughout and a secured claim to CRA arose in excess of $500,000.

Through a combination of incompetence and foul play, the senior management and staff encumbered the business with too much debt and had created a situation where many of the firm’s top clients were about to bolt.  Without the intervention of a well planned yet swiftly implemented restructuring and turnaround plan, the company would surely die.

Upon the principal’s return, she sought the advice of her accountant and lawyer and was referred to us. The principal suspected the senior management’s actions were taken with a view to harm the company so that certain members of the senior management team could start their own firm and take certain staff members with them. It became clear to us that this company was a candidate for a restructuring and turnaround, not a candidate for bankruptcy.  Working with the principal, we quickly devised and began implementing the restructuring and turnaround using a Proposal under the Bankruptcy and Insolvency Act (Canada) (“BIA”). 

Restructuring & Turnaround: The Company was in the BIA Restructuring and Turnaround Mode for about 1.5 years.

  • The principal worked very diligently through the Proposal process to maintain the trust of key customers.
  • She was able to give back a portion of the premises to the landlord, thereby reducing premises leasing costs.
  • She terminated unnecessary staffing, including those senior staff that was responsible for the decline of the company. The staff did launch a wrongful dismissal suit but that litigation was settled within the Proposal process.
  • After about 1 year the Company was able to change Banks and obtain a more favourable financing package.

The restructuring and turnaround plan was in place and working!

The Result: Through the Restructuring and Turnaround Proposal, the company was able to amass sufficient cash to pay off in full the source deduction trust claim in excess of $500K and they successfully completed their Proposal by paying an additional amount of $250,000 to compromise $1.2 million of unsecured debt. The Company to this date continues to operate profitably, provides employment and also contributes in other ways to the community.  The restructuring and turnaround plan worked!

Serious financial problems don’t have to mean the end for a company. There are solutions other than bankruptcy. Corporate restructuring and turnaround is one of them. Contact Ira Smith Trustee & Receiver Inc. today.  If caught early enough, we can save companies and jobs through corporate restructuring and turnaround services, and avoid bankruptcy Starting Over, Starting Now.

Are you, or your company in need of a restructuring and turnaround?  If so, don’t procrastinate; contact Ira Smith Trustee & Receiver Inc. now!



RENT-TO-OWN OFFERS ARE REALLY EXPENSIVE DEBT, rent-to-own, living paycheque to paycheque, the Canadian Consumer Handbook, debt, trustee, starting over starting now, bankruptcy canada faqRent-to-own offers sound great, but beware, because it is another form of very expensive borrowing.  At this time of year we tend to shop much more than any other time on the calendar. And, from time to time we come across a great deal on a new television, or computer or piece of furniture but the credit cards are already close to their limit and there’s not much available cash. You’re about to walk away but then the salesperson tells you that they have a rent-to-own program and it sounds perfect! But, what the salesperson isn’t telling you is that rent-to-own can be VERY expensive. The reality is that the rental charge can amount to three or four times what it would cost to pay cash or finance the purchase on an installment plan.

According to a CBC News investigation, Canadians spend $260 million every year for rent-to-own products, often paying exorbitant prices that would not be allowed in some U.S. states. Canada lags behind the U.S., where the majority of states have enacted laws to protect rent-to-own customers by requiring more transparent advertising. Five states have actual price controls. Not a single Canadian province has followed suit with specific rent-to-own legislation. Rent-to-own targets low-income and credit-constrained consumers who are living paycheque to paycheque by offering low weekly and monthly payments for household goods.

Before considering rent-to-own, The Canadian Consumer Handbook has suggested four questions to ask yourself:

  1. Is the item something I absolutely have to have right now?
  2. Can I delay the purchase until I have saved enough money to pay cash?
  3. Have I considered all my credit options, including applying for retail credit from the merchant or borrowing money from a credit union or bank?
  4. Would a used item purchased from a garage sale, classified ad or second-hand store serve the purpose just as well as something new?

Don’t sign a rent-to-own contract without calculating what it’s really going to cost you and ask yourself if it’s really worth it. Getting into more debt is not the way out of debt. You need professional help to solve your debt issues. Contact Ira Smith Trustee & Receiver Inc. We can help you get back on solid financial footing so that Starting Over, Starting Now you’ll be well on your way to conquering debt.  Check out our bankruptcy Canada faq yourself to start finding answers.



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Image courtesy of Canadian Broadcasting Corporation

Financial trouble; today’s cashless purchasing options can lead you there.  Gone are the days when people walked around with big wads of cash in their pocket. Things have changed so dramatically that now we often find ourselves with no cash at all.

We have wallets full of reloadable coffee cards and credit cards and technology has now enabled us to make payments with our smartphones. The problem is that keeping track of our spending has become very difficult.  If we are not on top of our spending and making sure that we are not spending more than we earn, financial trouble will find us.

In the good old days we paid for everything with cash. We knew exactly what we were spending and sticking to a budget was much easier. Impulse buying was virtually impossible.  Shopping digitally or with plastic is somewhat unreal. And, it’s becoming easier and quicker. Paying with smartphones is becoming more and more prevalent and smartwatch payments will soon be readily available.

Even shopping with plastic has gone high tech; we no longer sign credit card receipts; we tap and we’re done. It really doesn’t feel like a financial transaction anymore. You see something that appeals and wave a smartphone at it or tap a credit card and it’s yours. We’re spending more on purchases that are virtual and we’re losing control of our spending – hence financial trouble.

I know it’s old fashioned, but try using cash for a while. Any time you make a purchase, take real money out of your pocket. You may find the impulse to buy is not quite so great. Credit cards and digital payments are convenient, but it’s very easy to lose control and you may find yourself in financial trouble.

If you’re now in financial trouble because you’ve lost control of your spending, you need professional help. Contact Ira Smith Trustee & Receiver Inc. as soon as possible. The earlier you deal with debt, the more options you’ll have. We approach every file with the attitude that your financial problems can be solved given immediate action and the right plan so that Starting Over, Starting Now you can take the first step towards a debt free life.