Insolvent estates Canada:  Introduction

We previously discussed the aspect of death and insolvency in two blog posts:

When it comes to insolvent estates Canada, among the various questions asked of us, these three questions are always asked:

  1. What are the duties of an executor/personal representative when the estate has more liabilities than assets?
  2. Can the executor(s) pay bills before the creditors actually file a claim?
  3. Do executors or beneficiaries have to pay creditors out of their own pocket if the estate is insolvent?

We prepared the above video to answer these 3 questions.  Below is a more detailed discussion of the last 2 questions.

Insolvent estates Canada:  The loss of life of a debtor occurs; who’s responsible for the money owed?

Although some creditors may try to collect from the spouse or other relatives, money owed doesn’t transfer because of marriage or death.  If the debt is “joint”, the survivor has taken on the obligation directly and is liable on the account.

Debts are normally paid out of the assets of the property of the deceased before distributions to heirs (before paying heirs, the deceased’s debts must be paid).  If the estate is insolvent (the assets of the estate are not enough to pay the amounts owed), then the order of charge is commonly prescribed by way of provincial rules.

If warranted, the executors could apply to Court for an order letting them assign the deceased’s estate into bankruptcy.  In that situation, then the Bankruptcy and Insolvency Act (Canada) (“BIA”), the federal legislation, will prescribe the order of payment.

If insurance was bought to pay off a specific debt such as a bank issued mortgage or loan, then upon the death of the individual the insurance company will repay the bank and the debt will not exist in the deceased’s estate.

Insolvent estates Canada:  What are your alternatives and your responsibilities, as an executor upon the death of a debtor?

If the estate is insolvent, before or after paying the testamentary costs, you have alternatives:

  1. Pay the money owed out of your personal resources.
  2. Allow the estate go bankrupt.

Emotionally you may wish to pay the money owed because you believe in your heart that it is the proper thing to do and you don’t wish to dishonour the memory of your loved one with a string of bad debts and bankruptcy. But before you decide, you need to know that there is no liability for an executor or heir to take on the debts of the deceased.

Even though there may be a stigma connected to bankruptcy, the reality is that you are not responsible for the money owed, so why should you assume this burden and in all likelihood put your family in financial jeopardy?

Bankrupting the estate makes economic sense. An executor can sidestep the minefield of issues involved in administering the deceased’s insolvent estate by bankrupting it.

Insolvent estates Canada:  What should executors and heirs be aware of?

If you and/or another family member is the executor, be aware:

  1. The executors have a legal responsibility for all acts completed, and for all acts not accomplished that they should have.
  2. Notwithstanding everyone’s best efforts, they may unknowingly be inviting proceedings from lenders or heirs for difficult issues. This happens when family members, who are well-intentioned but not skilled at monetary, insolvency or legal issues, are executors because she or he is named, however actually has no know-how in this region.
  3. By putting the property into bankruptcy, which requires previous approval of the bankruptcy court, the executors are relieving themselves of personal legal responsibility because the estate will now be administered under the BIA and all creditors by the Licensed Insolvency Trustee.
  4. The executor will relieve him or herself of coping with collection calls.
  5. As long as there are sufficient funds in the estate to pay the funeral costs, that can be paid out first in the case of a bankruptcy of the deceased’s estate because S.136. (1)(a) of the BIA states:

Priority of claims

“136 (1) Subject to the rights of secured creditors, the proceeds realized from the property of a bankrupt shall be applied in priority of payment as follows:

(a) in the case of a deceased bankrupt, the reasonable funeral and testamentary expenses incurred by the legal representative or, in the Province of Quebec, the successors or heirs of the deceased bankrupt;”

It is the first debt with preferred status that can be paid.

Insolvent estates Canada:  What should I do if I  am an executor and I find that the liabilities are greater than the assets?

If you are an executor of a will and you find out that the estate is insolvent, after speaking with the estate lawyer, contact Ira Smith Trustee & Receiver Inc. as soon as possible. We will evaluate the situation and give you sound financial advice on how best protect yourself as executor and the heirs, so that you will be able to go ahead Starting Over, Starting Now.

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THIS VLOG WAS INSPIRED IN PART BY OUR eBOOK – PERSONAL BANKRUPTCY CANADA: Not because you are a dummy, because you need to get your life back on track


Grey divorce Canada

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Grey divorce or silver separation, whatever you choose to call it, is a sad fact of life in our society today there is a grey divorce boom. According to Statistics Canada, the grey divorce Canada statistics shows that the rate of divorce has been steadily growing among those 55 and over and it’s expected to increase as more people age. Therefore, the grey divorce on the rise trend will not expected to stop anytime soon.

Grey divorce Canada:   there is no grey divorce Canada border

This is not just a Canadian issue; it’s some world-wide phenomena. In the United States the divorce rate among baby boomers has doubled. The statistics in the U.K. and Europe mirror those in the U.S. In Japan couples married 30 years or more have seen their divorce rate quadruple in the last 20 years.

Grey divorce Canada:   what is grey divorce?

We have written on the subject before in:

Grey divorce Canada:   grey divorce problems

Sadly, divorce isn’t just an emotional issue; it’s financial, and the ramifications of the grey divorce in Canada procedure can be devastating. Do you know all about your finances – assets, liabilities, insurance, pensions, retirement savings plans, real estate holdings, expenses and cash flow? Are you financially ready to be single in retirement? Or will you have to put off retirement? Do you have any idea what you’d require to maintain your current lifestyle and if you’ll be able to maintain it?

Grey divorce Canada:   grey divorce retirement

Unfortunately, many Canadians in the throes of a grey divorce Canada procedure are not ready financially and may start accumulating high interest debt to cover expenses. Your senior years are not the best time to be caught in a debt trap. We’re not suggesting that you stay in an unhappy marriage because of financial considerations, but you can get yourself on solid financial footing before divorce.  At the best of times grey divorce in Canada is not fun; why put yourself in added stress and adding to your grey divorce problems by not thinking things through properly financially first?

Grey divorce Canada:   a possible grey divorce Canada procedure

Don’t let grey divorce put you into a state of financial ruin. Reach out to Ira Smith Trustee & Receiver Inc. We’re experts in debt. Meet with us for a free, no obligation consultation. We’ll evaluate your situation and come up with a solid financial plan so that you can have peace of mind and move forward with your life Starting Over, Starting Now.



History of bankruptcy:  Introduction

A subject that rarely gets written about is the history of bankruptcy.  Understanding the history of the Canadian bankruptcy system and how it has evolved, gives a helpful look into how it works and help Canadians and Canadian society.

History of bankruptcy:  Helping the debtor

The Bankruptcy and Insolvency Act (BIA) provides a way for the orderly liquidation of a bankrupt’s assets and distribute that value to the creditors.  In this way, the BIA assists the insolvent debtor who needs a way to be forgiven for his or her financial sins, relieved of their burden and be returned to society as a productive contributor.  The BIA assists creditors in providing the system of turning the assets into cash to be distributed to them, and not keeping those assets either out of their reach or just laying in an unproductive state.  The BIA also is a system of checks and balances, so that it provides both Canadians and foreigners that there is a vibrant and safe Canadian economy.

History of bankruptcy:  Helping the creditors

The BIA also ensures that there is a fair and logical system in place to deal with the assets of the debtor and the claims of creditors.   By invoking it, it avoids a race among creditors to attempt to get the right to seize assets in an uncontrolled way.  Creditors are paid according to their place in the hierarchy of claims as described in the BIA as follows:

  • Trust claimants who are outside of the bankruptcy scheme
  • Secured creditors, who are also outside the bankruptcy scheme as long as they hold good and valid security
  • Unsecured creditors:
    • Preferred
    • Ordinary

History of Bankruptcy:  bankruptcy alternatives

The BIA also provides debtors to opt for avoiding bankruptcy by making a Proposal.  In the case of corporations, a Proposal; for people, either a Proposal or Consumer Proposal, depending on the level of their debt.  Proposals are the bankruptcy alternative that allows companies or people to financially rehabilitate themselves and avoid bankruptcy, while offering the creditors more than they would receive in a bankruptcy.  In this way, the BIA is both a liquidation and a rehabilitation statute, benefiting both debtors and creditors.

History of bankruptcy:  The BIA

The present bankruptcy statute came into force on July 1, 1950.  The title of the statute was amended from the Bankruptcy Act to the Bankruptcy and Insolvency Act in 1992, to show the statute had matured into a full financial rehabilitation statute, that could be used to carry out a bankruptcy alternative.  Further amendments were made in 1997 to deal with a number of practical issues that became problematic for Canadian society applying the BIA, including:

In 2005 there were another round of comprehensive amendments to the BIA mainly dealing with the new legislation of the Wage Earner Protection Program Act (WEPPA), designed to protect employees for their unpaid amounts when their employer goes either bankrupt or into receivership.

History of bankruptcy:  Rehabilitation

It is a fundamental purpose of the BIA to offer the financial rehabilitation of insolvent persons.  The BIA permits an honest but unfortunate debtor, be it a corporation or an individual, to secure financial restructuring through the Proposal provisions, or a discharge from bankruptcy for people.  It allows for a fresh start for the debtor to resume his or her place in the business community and society.

The BIA attempts to offer balance by allowing an investigation to be made of the affairs of the debtor and setting aside fraudulent transactions so that ordinary unsecured creditors can share in a distribution, rather than someone else being the beneficiary of those questionable transactions.  Finally, the BIA allows for creditors to purse actions against the bankrupt either through the Licensed Insolvency Administrator or directly by a creditor or group of creditors.

History of bankruptcy:  The Courts

The general approach to the BIA by the courts is that it is a commercial statute.  To administer the process it is left largely in the hands of business people.  Technical and legal objections and manoeuvres are not given weight beyond those that are necessary for the proper implementation and interpretation of the BIA.  Settlement and resolution are rewarded, litigation and court proceedings are not.

History of bankruptcy:  What to do if you have too much debt

I hope this history of bankruptcy provides you with a good look into how the bankruptcy system developed in Canada and how it works.  If you’re suffering from too much debt and are seeking debt relief options, contact Ira Smith Trustee & Receiver Inc. Our approach for every file is to create an outcome where Starting Over, Starting Now becomes a reality, beginning the moment you walk in the door. You’re only one call away from taking the steps towards a debt free life.

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THIS VLOG WAS INSPIRED IN PART BY OUR eBOOK – PERSONAL BANKRUPTCY CANADA: Not because you are a dummy, because you need to get your life back on track



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Last week we discussed Consumer Proposal Vs Debt Settlement. Consumer proposals remain a hot topic and today we’d like to share with you some of our consumer proposal FAQs.

Consumer proposal FAQs:  What is a consumer proposal?

A Consumer proposal is a formal way governed by the Bankruptcy and Insolvency Act (BIA) available only to people. Working with a licensed insolvency trustee acting as your consumer proposal administrator you make a proposal to:

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

Payments are made through the trustee, and the trustee uses that money to pay each of your creditors. The debt must be paid off within five years.

Consumer proposal FAQs:  How do I qualify for a consumer proposal?

As discussed in our last blog, you must be an individual and your total debts must not exceed $250,000 (not including debts from a mortgage or line of credit secured by your principal residence).

You must also meet the insolvency test. This means that:

  • your debts are greater than your assets;
  • if you liquidated all of your assets you would not have enough money to pay off your debts in full; and
  • you are having trouble making the full payment on all of your debts every month.

Making only minimum monthly payments doesn’t count as paying off your debts.

Consumer proposal FAQs:  What does a consumer proposal cost?

There are no upfront fees associated with consumer proposals. Your consumer proposal payments covers the cost for filing a consumer proposal. There are no separate charges either for filing a consumer proposal or fees paid to the trustee to act as your consumer proposal administrator.  To calculate the professional fee the trustee uses a formula in the BIA  and it comes out of the amount you are paying in your consumer proposal.

Consumer proposal FAQs:  How does a consumer proposal work?

A consumer proposal allows you to make arrangements to pay all or part of your unsecured debt in monthly payments over a predetermined time period.

  1. A licensed insolvency trustee will meet with you and work out a payment plan that they believe will work for you and be acceptable by your creditors.
  2. The trustee acting as your consumer proposal administrator will file the consumer proposal with the Office of the Superintendent of Bankruptcy.
  3. The trustee will send the consumer proposal to your creditors who then have 45 days to accept or reject your proposal. The creditors can also accept or reject your proposal before a meeting of creditors, if such a meeting was held.  Normally in a consumer proposal, there is no need to hold a meeting of creditors.

Consumer proposal FAQs:  How long will my consumer proposal last?

A consumer proposal can last a maximum of five years but you can shorten the proposal term either by increasing the amount of your monthly payment or by offering a lump sum payment (if you are able to borrow a sufficient lump sum from either a bank or family).

Consumer proposal FAQs:  Can a consumer proposal get rid of collections agencies and prevent my wages from being garnished?

Yes, a consumer proposal immediately stops almost all creditor actions (garnishments for family law support payments cannot be stopped by a consumer proposal) including tax debts.

Consumer proposal FAQs:  If I agree to a consumer proposal will I lose my house and my car?

Typically secured creditors are not affected by a consumer proposal and in most cases you will continue to make your payments as usual. This assumes that your budget, which you prepare as part of filing your consumer proposal, shows that you can afford to do so.

If you have a mortgage against your house or a car loan registered against your car, you can opt for surrendering your house and/or car (secured assets) and stop making those payments before filing the consumer proposal. In this case the lender will sell the secured asset and any resulting shortfall becomes an unsecured debt in your consumer proposal.

NOTE:  If you were to give up your secured assets after the filing of your consumer proposal, you won’t be released from any shortfall debt because it occurred after the filing of your consumer proposal.  So make sure that if you are giving up secured assets, you wait for the secured creditors to recognize that you have given them up and they have begun their enforcement proceedings, including selling the home or car, BEFORE you file your consumer proposal.

Consumer proposal FAQs:  Will I have to give up my credit cards?

Typically, you will have to give all of your credit cards to the trustee and you won’t be able to apply for a new credit card until the term of your consumer proposal is over. You will however be able to use a prepaid or secured credit card during this period.

Consumer proposal FAQs:  If I miss a payment will I be bankrupt?

We strongly recommend you to make your payments faithfully. You can defer up to two payments but if you fall three payments behind, your consumer proposal will end. This means that you will no longer have protection from creditors and they can again start their collection efforts against you.

Consumer proposal FAQs:  What is my next step if I have too much debt?

If you’re considering a consumer proposal or are seeking debt relief options contact Ira Smith Trustee & Receiver Inc. Our approach for every file is to create an outcome where Starting Over, Starting Now becomes a reality, beginning the moment you walk in the door. You’re only one call away from taking the steps towards a debt free life.


More Canadian workers living paycheque to paycheque, challenged by debt and economy, payroll survey finds

More Canadian workers living paycheque to paycheque:  Introduction

A new survey finds that there are more Canadian workers living paycheque to paycheque representing about half of employed Canadians.  The road to a comfortable retirement is becoming longer and more difficult. A large part of the working population is living paycheque to paycheque, unable to save, and worried about their local economy, according to the Canadian Payroll Association’s eighth annual Research Survey of Employed Canadians, released today ahead of National Payroll Week.

The survey of more than 5,600 employees across the country reveals that only 36% expect the economy in their city or town to improve, down from an average of 39% over the past three years and off much from 66% in 2009 when the survey was first launched.

More Canadian workers living paycheque to paycheque still

Many working Canadians are barely making ends meet. Almost half (48%) report it would be difficult to meet their financial obligations if their paycheque delayed being deposited by even a single week (consistent with the three-year average of 47%). Illustrating just how strapped some employees are, 24% say they likely could not come up with $2,000 if an emergency arose in the next month.

“A significant percentage of working Canadians carry debt, have a gloomy view of their local economy and are fearful of rising interest rates, inflation, and costs of living,” says Patrick Culhane, the Canadian Payroll Association’s President and CEO. “In this time of uncertainty, people need to take control of their finances by saving more. ‘Paying Yourself First’ (by automatically directing at least 10% of net pay into a separate savings account or retirement plan) enables employees to exercise some control over their financial future.”

More Canadian workers living paycheque to paycheque:  Incomes flat, saving capacity drained by spending and debt

“Survey data suggests that household income growth has stalled, as respondents reporting household income above $100K has hardly increased in five years,” says Alec Milne, Principal at research provider Framework Partners. “In fact, real incomes have actually declined when inflation is taken into account.” While pay has remained largely unchanged, employees’ spending and debt levels have affected their ability to save. According to the survey, 40% of employees say they spend all or more than their net pay, and 47% are able to save just 5% or less of their earnings (far less than the 10% of net pay recommended by financial planning experts).

Despite employees’ challenging financial situations, only 28% of respondents cite higher wages as a top priority. This is down from the average of 34% over the past three years. Instead, an overwhelming 48% are most interested in better work-life balance and a healthy work environment.

“Clearly, many Canadians are concerned about their financial situation,” says Lucy Zambon, the Canadian Payroll Association’s Board Chair. “But better work-life balance does not have to mean reduced financial security if you spend within your means and ‘Pay Yourself First’ as a step towards financial well-being.”

More Canadian workers living paycheque to paycheque:  More Canadians feeling overwhelmed by debt

Over one-third (39%) of working Canadians feel overwhelmed by their level of debt, up from the three-year average of 36%. Debt levels have risen over the past year for 31% of respondents. And 11% do not think they will ever be debt-free.

Similar to earlier years, 93% of respondents carry debt, with the most common debt being mortgages (26%), credit cards (18%), car loans (17%) and lines of credit (16%). Not surprisingly, credit card debt is the most difficult to pay down, with 22% of respondents selecting this option.

Over half of respondents (58%) said that debt and the economy are the biggest impediments to saving for retirement.

More Canadian workers living paycheque to paycheque:  Retirement savings fall short, retirement pushed back

Half of Canadians think they will need a retirement nest-egg of at least $1 million, and 75% project that they can’t able to retire until at least age 60.

Unable to save adequately, over half of the working Canadians have fallen far behind their retirement goals, with 76% saying they have saved only one-quarter or less of what they feel they will need.

Even among those closer to retirement (50 and older), a disturbing 47% are still less than one-quarter of the way to their retirement savings goal.

Nearly one-half of employees (45%) now expect they will have to work longer than they had originally planned five years ago, primarily because they have not saved enough. Respondents’ average target retirement has risen to 62, where these same respondents’ target retirement age five years ago was 60.

The past eight years of data drove the Canadian Payroll Association to advocate for a modest enhancement to the Canada Pension Plan (CPP). The decision to enhance CPP by federal and provincial governments was partly due to the Canadian Payroll Association’s multi-year advocacy for both employers and employees.

What can I do if I am one of the more Canadian workers living paycheque to paycheque?

Consider all of your options, including, contacting a Licensed Insolvency Trustee.  Perhaps you just need help with credit counselling and budgeting.  Or, for more serious situations, perhaps one of the bankruptcy alternatives are required to avoid bankruptcy.  Regardless, you can get a free consultation.

We are debt professionals who will evaluate your situation and recommend which debt relief options are right for you. Consumer proposal is one option; there are others as well.

Contact Ira Smith Trustee & Receiver Inc. today for a free consultation. You’ll be in good hands and Starting Over, Starting Now you can be well on your way to living a debt free life.

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THIS VLOG WAS INSPIRED IN PART BY OUR eBOOK – PERSONAL BANKRUPTCY CANADA: Not because you are a dummy, because you need to get your life back on track



Consumer proposal vs debt settlement

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I am often asked to explain the differences of consumer proposal vs debt settlement.  Debt is such a prevalent issue in our society today that as a result we’re bombarded by commercials about different options for debt relief. Two of the most talked about are consumer proposals and debt settlement, however most people don’t really understand what they are. Let me explain.

Consumer proposal vs debt settlement:  What is a consumer proposal?

According to the Office of the Superintendent of Bankruptcy Canada a consumer proposal is a formal, legally binding process administered by a Licensed Insolvency Trustee (LIT). In this process, the LIT will work with you to develop a “proposal”—an offer to pay creditors a percentage of what is owed to them, or extend the time you have to pay off the debts, or both.

The term of a consumer proposal cannot exceed five years. Payments are made through the LIT, and the LIT uses that money to pay each of your creditors. Consumer proposals are government sanctioned, federally regulated and administered by federally licensed and regulated LITs.

Consumer proposal vs debt settlement:  Can anyone who owes money opt for a consumer proposal?

No. You must be an individual and your total debts must not exceed $250,000 (not including debts from a mortgage or line of credit secured by your principal residence).  You must also be insolvent.  This means that your debts are greater than your assets, if you liquidated all of your assets you would not have enough money to pay off your debts in full and you are having trouble making the full payment on all of your debts every month. Making only minimum monthly payments doesn’t count as paying off your debts.

Consumer proposal vs debt settlement:  What is debt settlement?

Many people are seduced by slick ads and even slicker salespeople offering an easy way out of debt. Debt settlement companies tell you that they’ll negotiate with your creditors to accept a fraction of what you owe them and like magic your debt problems will disappear. NOT TRUE!

They are not financial services professionals. They are not federally licensed or regulated. They’re nothing more than snake oil salesmen, well-known for high pressure sales tactics, making false and unsubstantiated claims, insinuating ties to the government and demanding big upfront fees. We’ve written several blogs warning the public about debt settlement companies:

According to Credit Canada Debt Solutions:

  • There are more than 50 organizations offering debt settlement services in Ontario.
  • The Ontario Association of Credit Counselling Services has received more than 100 complaints a month about debt settlement companies.
  • Debt settlement companies have also been the focus of a “consumer alert” from the Financial Consumer Agency of Canada, which warns consumers to beware of “too good to be true” offers from debt reduction companies.

According to the U.S. Federal Trade Commission:

  • The success rate of for-profit debt settlement companies is less than 10%.
  • 65% of people who pay fees to these debt settlement companies leave their programs without ever receiving a settlement.
  • The amount of money that people pay in fees to these companies almost equals the amount of money that they save. However, this is before creditor late fees, penalties and interest are added in (these can often double or triple a debt by the time a settlement is negotiated). So at the end of the day it seems fair to say that the majority of people who deal with these companies do not save any money and are often left worse off in the end.

Consumer proposal vs debt settlement:  Who can administer them?

Since LITS administer consumer proposals, the only federally licensed and strictly regulated debt professionals, they really can help you deal with debt. Debt settlement companies are not professionals of any kind. They are slick sales organizations designed to make as much money as possible from the consumer, not save you money or repair your debt situation. More often than not, after taking your money, debt settlement companies then hand you over to a LIT for the only debt settlement program that really works, which is called, a consumer proposal.

The choice is clear when it comes to consumer proposal vs debt settlement, consumer proposals are an excellent debt relief option and you should run from debt settlement companies as far as your shoes can carry you.  

Sometimes debt settlement is also termed debt consolidation.  Whether the question is consumer proposal vs debt settlement, consumer proposal vs debt consolidation or debt settlement vs consumer proposal Canada, there is only one correct answer – look at a consumer proposal for debt relief.

Consumer proposal vs debt settlement:  Is a consumer proposal right for me?

Consult a LIT. We are debt professionals who will evaluate your situation and recommend which debt relief options are right for you. Consumer proposal is one option; there are others as well.

Contact Ira Smith Trustee & Receiver Inc. today for a free consultation. You’ll be in good hands and Starting Over, Starting Now you can be well on your way to living a debt free life.



Student debt:  The times have changed already!

Times have changed so much for university graduates and unfortunately, student debt counselling has not kept pace with today’s reality.  Students graduate with various student loans and varying amounts of debt.  The theory is that graduates will get a well-paying job in their chosen field upon graduation, allowing them to work and to repay their student loan debt.

Our previous student debt counselling and student loans blogs and vlogs

Student loan debt is such a serious issue that we’ve written a series of blogs and vlogs on the subject:

Student debt:  What can today’s graduates expect?

However, in today’s world, their job searching may result in them not getting immediately into their field at the salary they anticipated.  It may be the case that graduates may have to do a couple of different part-time jobs, may start being underemployed and in some cases, starting out interning and being in their chosen field but not being paid at all.  This will put immense pressure on the new graduate who needs to start repaying debt in addition to normal living expenses.

Student debt:  How much of a problem is it really?

Post-secondary education is effectively a need to succeed in today’s labour market. Unfortunately, while the demand for education has increased, public funding has failed to keep up.

According to the Canadian Federation of Students, public funding shortfalls have resulted in a significant growth of costs that students must now bear, namely in the form of high tuition fees. From 1990 to 2014, national average tuition fees have seen an inflation-adjusted increase of over 155%. In Ontario, tuition fees have increased over 180%.

They also state that students who receive funding through the Canada Student Loans Program (CSLP) are graduating with an average student loan debt of $28,495.  This is only student loan debt and doesn’t include any other borrowings for living expenses if the student is living away from home.  The impact of Canada student loan debt is that today’s students are the most indebted generation in Canadian history. They can certainly use student debt counselling.

Student debt:  We need more than just counselling

Although financial counselling should begin at home at a very young age, and be reinforced through teachings at the high school level, more than debt management lessons are required.  We need our provincial and federal governments to take the lead.  There needs to be an easing of the burden on graduates.  Graduates with high student loan debt show signs of poor mental health in early adulthood.  This certainly must impact their work performance and is not healthy for Canadian society.

Our governments need to look seriously at the public funding model for post-secondary school education.  It is not helping Canadians to allow them to incur high student debt for fields of study where the job prospects, and the prospect of being able to repay the loans, are dim.  It does not help Canadian graduates to have them under so much pressure to repay loans after graduation – perhaps there needs to be federal government intervention to ease the repayment program.  In this way graduates can have the necessary time to get their employment, contribute to Canadian society, pay income taxes AND repay student loans.

These are just but a few simple ideas.  I am sure that you can come up with many more and I would love to hear about them.

Are you in need of student debt counselling or credit or debt counselling in general?

No matter the cause of your serious debt issues, The Ira Smith Team is here to help. Debt is not insurmountable; there are always options. With proper counselling, immediate action and a solid plan, we can help get your life back on track Starting Over, Starting Now. Our trustees are also certified in credit counselling.  Give us a call today.

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THIS VLOG WAS INSPIRED IN PART BY OUR eBOOK – PERSONAL BANKRUPTCY CANADA: Not because you are a dummy, because you need to get your life back on track




back to school, financial stress of back to school, financial burden budget, credit card, debt professional, debt, ira smith trustee, hoyes, bdo, mnp, spergel, afarber, thatcher, consumer proposal, bankruptcy, gta, toronto, vaughan, richmond hill, woodbridge, thornhill, markham, newmarket, auroraBack to school is a gold mine for retailers

Back to school is the second busiest retail time of the year, second only to Christmas. We’ve all seen the commercials with happy families skipping up and down stores aisles filling up shopping carts with knapsacks, lunch boxes, note books, pencils, pens, etc. Unfortunately this happy picture is not indicative of many Canadian families for who back to school is a terrible financial burden.

What RetailMeNot.ca says about back to school

  • 92% of Canadians agree that purchasing back to school items can be a financial burden on families
  • 91% believe that back to school shopping is becoming more expensive year after year
  • This year, Canadian parents are expecting to spend an average of $472 on their child for back to school shopping, $143 more than what they expected to spend last year ($329)
  • University students are the most expensive to shop for with those parents expecting to spend $1,630, compared to $412 for high school students and $318 for elementary

8 Tips for beating the financial stress of back to school

  1. Only buy what you need. Reuse items when possible. If the knapsacks and lunch boxes are still good from last year, reuse them. The same goes for pens, pencils and other school supplies.
  2. Hand down clothing or do a clothing exchange with your friends. It’s a common sense way to save money.
  3. Create a budget and stick to it. We can’t stress enough the importance of a budget to maintain control of your finances.
  4. Search for the best prices: Don’t just walk into a store and pay full retail price. Search online, look for coupons and promo codes and wait for sales.
  5. Shop any time of year you find a sale and put the items away for back to school. Shop the Boxing Day sales or Thanksgiving Day sales and put away the clothes, shoes, knapsacks, etc. for back to school. It’s a great way to save money.
  6. Designer brands are not a necessity. Although many parents feel pressured into buying the latest designer brand for their kids, it’s not worth going into debt for.
  7. Go shopping with a friend and split bulk purchases. Buying in bulk is not always cost-effective for a single family but if you can split a bulk buy with a friend you may be able to save a considerable amount of money.
  8. Pay with cash. When you shop with a credit card it’s easy to lose track of your spending and then next month you’ll get a bill that you can’t pay.

What to do if you have too much debt and back to school costs will put you over the edge

If back to school is a financial burden, then you need help from a debt professional now before your situation becomes critical.  The Ira Smith Team is here to help. Meet with us for a free consultation. We’ll evaluate your situation and come up with a solid financial plan so that Starting Over, Starting Now you can be well on your way to conquering debt.


Previous blogs for company went bankrupt and didn’t pay me wages

The issue of company went bankrupt and didn’t pay me wages is not a new one.  We previously wrote two blogs on this topic:

We have noticed a surge of renewed interest in this topic based on recent activity from readers of our Brandon’s Blog, so, we thought it would be a good idea to put together a short video on this topic.

People ask us what if company went bankrupt and didn’t pay me wages?

We answer if wages are owed by your employer because the company went bankrupt and didn’t pay me wages or is in receivership don’t despair; there is hope for you to recuperate monies owed to you. The Wage Earner Protection Program (“WEPP”) Act – WEPPA – in conjunction with an amendment to the Bankruptcy and Insolvency Act (Canada) – BIA – created a mechanism for employees to be compensated for claims of unpaid wages, commissions and vacation pay accrued in the six months preceding the employer files for bankruptcy or being placed in receivership and wages are owed to you along with claims for unpaid termination and/or severance pay.

Are there any exceptions to company went bankrupt and didn’t pay me wages?  What are the rules?

There are a few exceptions to company went bankrupt and didn’t pay me wages. You are generally not eligible if, during the period for which your wages are owed to you by your employer, you:

  • were an officer or a director of your former employer
  • had a controlling interest in the business of your former employer
  • were a manager whose responsibilities included making binding financial decisions impacting the business of your former employer, and/or making binding decisions on the payment or non-payment of wages by your former employer

Who is eligible for the WEPP? You may apply if wages are owed to you by your employer and:

  • your former employer has filed for bankruptcy or is subject to a receivership
  • wages are owed to you by your employer, vacation pay, termination or severance pay from your former employer
  • amounts earned during the eligibility period or, in the case of termination or severance pay, your employment was terminated during the eligibility period ending on the date of bankruptcy or receivership

One more very important exception – it only applies if wages are owed to you by your employer and your employer is in either receivership or bankruptcy and owes you wages.  If your employer is attempting a corporate restructuring under a Notice of Intention to Make a Proposal, a Division I Proposal or the Companies’ Creditors Arrangement Act, then WEPPA and its provisions do not come into play.

Claim limits when company went bankrupt and didn’t pay me wages

Regardless of the total amount owing to you, the maximum any employee can receive under WEPPA is the greater of $3,200 or four times the maximum weekly insurable earnings under the Employment Insurance Act (which is now around $3,900).

Once employees file claims with both the Trustee/Receiver and Service Canada, Service Canada pays their claims for owed wages by the employer and Service Canada becomes the creditor. The amendment to the BIA has recognized WEPPA and created a priority charge that supersedes all secured charges except CRA’s deemed trust claim (and the reclaiming rights of farmers and suppliers) to a max of $2,000 per employee, secured against current assets.

Documentation needed if company went bankrupt and didn’t pay me wages

While no one wants – or expects – to be part of a receivership or bankruptcy, you should always keep detailed records of hours worked for any pay period. On any occasion when you discover there will be no paycheque, record the loss that you will suffer, such as not being able to pay bills or buy groceries. Ask for a formal explanation from your employer and keep detailed notes on your efforts. It’s important to prove that when owed wages by employer; you still expect to be paid, even if it’s late.

If your employer is in receivership or bankruptcy proceedings, and you believe you have a claim for owed wages by employer, find the trustee and get in touch with Service Canada. Have your records ready and make sure you get your Proof of Claim.

What should I do if I have too much debt and the company went bankrupt and didn’t pay me wages?

If you are experiencing financial problems, contact Ira Smith Trustee & Receiver Inc.  We’re here to find what your bankruptcy options are, put your financial house back in order and set you on a path to debt free-living. You’ll be amazed at the difference one phone call to Ira Smith Trustee & Receiver Inc. can make.

Contact us today. We are a licensed trustee and will listen to your issues and offer compassionate, professional assistance to aid you to avoid bankruptcy, so that you can regain control of your life, Starting Over, Starting Now.

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THIS VLOG WAS INSPIRED IN PART BY OUR eBOOK – PERSONAL BANKRUPTCY CANADA: Not because you are a dummy, because you need to get your life back on track




gta bankruptcy trustee, vaughan bankruptcy trustee, trustee, household debt, consumer credit, credit cards, lines of credit, budget, bankruptcy, bankruptcy alternatives, bankruptcy and divorce, divorce, divorce financial solutionsIntroduction to bankruptcy and divorce from a Vaughan licensed insolvency trustee (“GTA and Vaughan bankruptcy trustee”)

As a GTA and Vaughan bankruptcy trustee, I’ve never met anyone who had something good to say about bankruptcy and divorce. At times both are a necessary evil, but it’s never fun. Although divorce has been the butt of jokes by comedians for decades, it’s no laughing matter, especially financially.

This quote may be more telling than funny:

Let’s be blunt: If you hire a divorce lawyer today, there is a good chance you will hire a bankruptcy lawyer within two or three years.

Gene Meyer

Vaughan bankruptcy trustee discusses debt issues and divorce financial solutions

When couples decide to divorce, few have any idea of what the split is really going to cost and what each party will be left with after divorce. The goal of divorce and  the divorce process and result are two very different things. Here’s the reality of most Canadians’ financial situations:

  • The debt-to-disposable income ratio was 165.3% for the first three months of 2016 (Statistics Canada)
  • Households owe $1.65 in debt for every dollar of disposable income they have (Statistics Canada)
  • Total household debt, which includes consumer credit, and mortgage and non-mortgage loans, totalled $1.933 trillion at the end of the first quarter (Statistics Canada)
  • Balances on consumer loans including credit cards and lines of credit grew by 2.6% year-over-year, driven primarily by the continued popularity of lines of credit and auto loans (RBC)
  • Mortgage loan balances were up 6.2% from the same quarter of the prior year (RBC)
  • The average Canadian owed $21,580 in non-mortgage debt during the most recent quarter (TransUnion)

Many Canadians are already teetering on the edge of financial disaster without throwing divorce into the mix. Even if you have an amicable divorce, the cost of an uncontested divorce ranges from $1,000 to $3,500, according to a 2015 Canadian Lawyer’s legal fees survey. If your divorce gets messy the fees can be astronomical. Living two separate lives costs a lot more than living together as a couple. Do you have a clear understanding of what your monthly expenses are? Do you have a budget? These are just some of the divorce financial solutions that as a Vaughan bankruptcy trustee we recommend to people that they have to know about it beforehand.

What can I do if I have too much debt – divorce or no divorce?

Whether you live in the GTA or elsewhere, take the advice of a Vaughan bankruptcy trustee and get your financial house in order before you begin divorce proceedings or you may be looking at bankruptcy and divorce or bankruptcy alternatives down the road. Contact the Ira Smith Team for advice and a solid plan to deal with serious debt issues. We will give you a free first consultation to discuss your options and we can help you get out of debt Starting Over, Starting Now.