#VIDEO – SUBPRIME CANADA: LOANS NOT HURTING THE HOT GTA REAL ESTATE MARKET OR ONTARIO#

Subprime Canada loans the introduction

Our vlog this week is on how subprime Canada loans are not hurting the GTA real estate market, or the Ontario economy at all.  Last Tuesday, we published our blog titled PERSONAL INSOLVENCY:  DROP IN OIL PRICES SERIOUSLY IMPACTING CANADIANS FINANCIALLY.  One of our findings was that in Ontario, the rate of insolvency filings declined.

The reason is simple.  The Ontario economy is not dependent on higher oil prices for its strength.

When I think of subprime lending, I think of the meltdown in the US economy in 2007 and 2008, and all the people who lost their homes.  As can be seen in this year’s Presidential election, there is a lot of unhappiness in the US about many things, including jobs, wages and the economy.  Globally everyone is looking for change; Canada’s Liberal party under Justin Trudeau and their sweep to power and the recent Brexit vote, are merely two recent examples of the global wish for change.

Recent TransUnion data on subprime Canada lending

Recent data shows that subprime Canada lending, is not having an effect on the Canadian economy and certainly is not hurting the hot GTA real estate market or Ontario.  The data points out some interesting trends:

  • subprime Canada lending is becoming a bigger part of Canada’s economy
  • the average amount owed on Canadian credit cards rose by 1.8 per cent over the past year, but among subprime borrowers, it rose 5.7 per cent in a year
  • among less risky borrowers with good credit ratings, credit card balances have been declining, by 1.5 to 4.7 per cent over the past year

“Average balances haven’t moved much, if you consider all Canadians together,” TransUnion director of research and analysis Jason Wang said in a statement.

“But once we segment by risk tiers, we find a gradual shift where subprime consumers are increasing their share of the debt load relative to the low-risk population.”

The TransUnion research included the following types of subprime lenders and subprime lending:

  • subprime mortgage lenders
  • subprime personal loans
  • subprime auto lenders
  • subprime credit cards

Subprime Canada delinquency rates

There are also regional differences in delinquency rates.  The TransUnion data shows that delinquencies shot up in Alberta by almost 12 per cent, but declined in Ontario (and BC, who also has a hot Vancouver real estate market).  Despite the growth in subprime Canada lending, TransUnion found that Canada has a generally healthy and well-functioning consumer credit marketplace, at least outside oil-exporting regions.

So what does this subprime Canada lending data mean

When you combine the catapulting delinquency and insolvency rates in the oil patch, and see that higher credit score people outside of the oil patch are reducing debt and their delinquency rates, it points out the regional disparities.  It shows how the oil patch economy is suffering due to low oil prices.  It shows me that sustained low oil prices will only keep the hurt going in the provinces that are dependent on higher oil prices for jobs and consumer spending.

What should you do if you have too much debt and can’t borrow more even in subprime Canada?

In our earlier blog titled SUBPRIME PERSONAL LOANS SECRETS REVEALED, I advised that if you can’t qualify for a traditional loan, a subprime loan is not the answer to your problems.  High interest rate subprime personal loans are not an answer for being unable to repay your debts. Taking control of your debt with the help of a professional trustee is the answer.

Meet with one of our licensed insolvency trustees for a free consultation with Ira Smith Trustee & Receiver Inc.

We’ll discuss all your options.  The options include bankruptcy alternativescredit counselling, debt consolidation and consumer proposals.  We will also tell you about bankruptcy if that’s the best option for you.

There is a way out of your financial problems.  We can offer the right solution for you.  We will do so without resorting to a subprime loan Starting Over, Starting Now.

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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PERSONAL INSOLVENCY: DROP IN OIL PRICES SERIOUSLY IMPACTING CANADIANS FINANCIALLY

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Personal insolvency is the financial condition where you can no longer meet your debts as they come due or your assets, if sold, are worth less than the amount of your debt.

When many of us read about a drop in oil prices we either cheer at the pumps or cry when we exchange Canadian into U.S. dollars for our next trip. But, for many Canadians the drop in the price of oil means so much more; it has seriously affected their lives financially.

As a result of the drop in oil prices,  thousands of people working in the oil and gas industry lost their jobs. And, there is a direct correlation between loss of jobs and personal insolvency.

According to the Canadian Association of Insolvency and Restructuring Professionals (CAIRP):

  • In Alberta, where the bulk of Canadian oil and gas activity occurs, the total number of personal insolvency filings in the 12 months ending April 30, 2016 rose 32.5% compared to the same period a year before.
  • In Saskatchewan, personal insolvency cases were 22.5% higher.
  • Newfoundland and Labrador, which has its own oil and gas industry and is also home to many workers who travel to the western provinces, saw a rise of 25.6% in personal insolvency filings of either a consumer proposal or bankruptcy filing.

Why are insolvency trustees still seeing the effects of the drop in oil prices over a year later?

It takes time for the full impact of layoffs to be felt. After a period of prolonged unemployment many Canadians have exhausted their savings, their credit and their safety net. This resulted in more than 11,000 people in Alberta enter personal insolvency proceedings compared to just over 8,000 the year before. Trustees in Alberta, Saskatchewan and Newfoundland and Labrador are continuing to see sharp increases in consumer insolvency.

Edmonton’s 53.3 per cent spike in insolvency filings was the sharpest in Canada in the past year. In Calgary the rate rose by 18.3 per cent. The rate jumped by 37.7 per cent in Newfoundland and Labrador, 10.4 per cent in Prince Edward Island, 22.9 per cent in Manitoba and 30.2 per cent in Saskatchewan.

Ontario and Quebec were the only provinces with a decline in their insolvency rates.

What can you do if you’re facing serious financial difficulties?

Take the advice of CAIRP. The first thing you should do is visit a Licensed Insolvency Trustee to get thorough professional advice. In the words of CAIRP’s President and Chief Operating Officer Mark Yakabuski, “They are professionals who can arrange for a stay of most creditor actions, and can offer Canadian consumers with advice on all of their debt repayment options.”

Ira Smith Trustee & Receiver Inc. brings a cumulative 50+ years of experience dealing with diverse issues and complex files and we deliver the highest quality of professional service. Contact us today and Starting Over, Starting Now you’ll be well on your way to overcoming your financial difficulties.

#VIDEO-HIDING ASSETS IN BANKRUPTCY: HIDE AND SEEK WITH SERIOUS CONSEQUENCES#

Hiding assets in bankruptcy is a huge mistake

When you are contemplating filing for bankruptcy, don’t believe that hiding assets in bankruptcy proceedings will work for you.  A licensed insolvency trustee is very good at finding undisclosed property. And if you intentionally try to hide assets, you could face severe consequences.

Some people filing for bankruptcy think that if they don’t list property in their sworn statement of affairs, they can dupe the licensed insolvency trustee and keep the property. This is a huge mistake and illegal.

The first assessment

A licensed insolvency trustee does a full assessment of the person considering filing for bankruptcy, to decide if they can avoid bankruptcy. The Trustee will get a written statement from the debtor of his or her assets and liabilities.

In addition to requesting the person to list all of his or her assets, there will also be certain questions, such as:

  • Have you sold, disposed of, or transferred any assets in the past twelve months?
  • Have you sold or transferred any property in the past five years while you knew yourself to be insolvent, either in Canada or Elsewhere?
  • Have you made any gifts to a relative or other person that was of a value in excess of $500.00 in the past five years?
  • Have you received any lump sum payments or settlements in the last 12 months?

The purpose of these intake questions is so that the Trustee can get a full picture of the person’s situation, to give the best advice possible about using bankruptcy proceedings, or some other options that are available to the person as an alternative to and a way to avoid bankruptcy.

The Trustee’s analysis, which includes comparing the answers to these questions to, the person’s current budget of income and how they spend their money, their expenses, and the assets listed by them, may very well highlight inconsistencies, which will lead to more questions, and probably uncover the assets that the person is attempting to hide.

As part of the Trustee’s analysis, the Trustee will also want to look at some recent bank statements as well as your filed income tax return and notice of assessment for the previous year.  There may very well be things jumping out of this review that will highlight inconsistencies, if someone is trying for hiding assets in bankruptcy.

Finally, the person’s creditors have a lot of information about the debtor’s financial affairs.  Once the person files for bankruptcy, his or her creditors get notice of the bankruptcy and look at the disclosure on the sworn statement of affairs.  If they are aware of an asset that has not been disclosed, I can guarantee you that they will call the Trustee to ask what about that other asset – and then tell the Trustee when they say, what are you talking about?

In a proposal filing we recently did, the person, in making an honest mistake, forgot to tell us of a piece of real estate they own with a sibling, bought for their mother to live in.  The mother pays the running costs of the property.  With all the stress the person was under, they sincerely forgot to tell us.

Once we mailed our notice to creditors, two days later a creditor emailed us asking what about the real estate, and supplied us with a title search to prove that the real estate is apparently half owned by our client!  We then had to rework the proposal to account for this extra value.

So what if I just don’t list the asset(s) – will this work for hiding assets in bankruptcy?

If you think that hiding assets in bankruptcy is a good way to hang on to your property; think again. This is not a minor matter. In fact it’s a violation of the Bankruptcy and Insolvency Act (BIA) and the Criminal Code and it’s punishable by hefty fines and/or prison time.

Committing fraud against the government is never a good idea and the likelihood is that you will get caught.  When the Trustee has reason to believe that an offence exists, we report it to the Office of the Superintendent of Bankruptcy Canada (OSB).  The Superintendent sends the file to one of its special investigation units.

The investigation units work closely with the Royal Canadian Mounted Police (RCMP). The OSB encourages people to report fraudulent activities that relate to a bankruptcy file and they even have a toll-free number to call 1-877-376-9902.  The OSB will encourage the RCMP to press criminal charges.

In addition to fines and/or prison time, if you are trying for hiding assets in bankruptcy:

  • You will not get a discharge of your debts
  • The Trustee can revoke your discharge and those debts cannot be discharged in future bankruptcies

Still think that hiding assets in bankruptcy is a good idea?

Honesty is always the best policy. If you make an honest mistake, just let your Trustee know, so they can figure out the best way to handle it.

If you are thinking of declaring bankruptcy, contact Ira Smith Trustee & Receiver as soon as possible. We will guide you through the process and Starting Over, Starting Now get you well on your way to living a debt free life.

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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LICENSED INSOLVENCY TRUSTEE TORONTO SAYS IF YOUR NEIGHBOUR WINS A LOTTERY JACKPOT IT COULD CAUSE YOUR BANKRUPTCY

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Licensed Insolvency Trustee Toronto asks why would the neighbours of lottery winners go bankrupt?

It all boils down to “keeping up with the Jones”. The study says that your going bankrupt likelihood increases when your neighbour buys a big house, fancy cars, boats; anything that’s high visible or showy. Then the neighbours, feeling pressure to keep up or compete, also go on a spending spree. However, without the cash from a lottery win, the neighbours’ finance their spending sprees with debt and beat a clear path to bankruptcy. Sadly, it’s not just the neighbours of lottery winners that go bankrupt.  As a licensed insolvency Trustee Toronto I can say that a high percentage of lottery winners go bankrupt too.

How many lottery winners go bankrupt?

  • 44% of those who’ve ever won large lottery prizes became broke within five years, according to a 2015 Camelot Group study.
  • 33% declared bankruptcy according to the Certified Financial Planner Board of Standards.
  • Other studies show that lottery winners often become estranged from family and friends, and incur a greater incidence of depression, drug and alcohol abuse, divorce, and suicide than the average person. As a licensed insolvency trustee Toronto, we must also help the person seek help for their medical condition/addiction, as part of helping them solve their financial problems.

All of a sudden lottery winners have an enormous amount of money on their hands and they have no idea what to do with it. Instead of seeking financial advice from a licensed professional and investing a large part of their money for the future, they go on wild spending sprees and pretty soon they’re worst off then they were before.  Then they have to go see someone like me, the licensed insolvency trustee Toronto.

Can a licensed insolvency trustee Toronto help me?

What the study shows is that a big lottery win will not grant you immunity from bankruptcy. Regardless of the reasons that you’re in serious debt, you need the help of a professional trustee. Ira Smith Trustee & Receiver Inc. approaches every file with the attitude that we will solve your corporate or personal financial problems given immediate action and the right plan. Give us a call today and take the first step towards a debt free life.  We are a licensed insolvency trustee Toronto that can get you back on the road to financial health, Starting Over, Starting Now.

#VIDEO-SENIORS AND DEBT: THE SHOCKING TRUTH#

Seniors and debt – Background

Seniors and debt is a growing problem.  This past Tuesday, we published our blog titled “SENIORS ARE CARRYING DEBT: WILL RETIREMENT SPELL POVERTY FOR YOU?”  This is such a serious issue that we have written a series of blogs on the topic which delve into WHY seniors are carrying debt.

Seniors and debt – What is the current situation?

One year ago, CBC News ran a feature on how more Canadians are outliving their savings and spending their golden years in debt.  Shortly after that, a new study from credit firm Equifax said seniors are increasing their debt loads at a faster pace than the population at large.  This was the first time that such a phenomena had occurred, and it continues.

In September 2015, the Financial Post reported that Canadian seniors are ramping up debt to soaring new heights.  They reported that Canadian seniors are getting a lot more comfortable with debt, adjusting to a lifestyle where debt will get them nicer things.  It seems that seniors and debt go together very well, which historically was never the case.  This is a recipe for disaster.

The image of the frugal senior is waning.  They are still around but they have gotten a lot older and do not form the bulk of seniors.  The current group of seniors entering retirement have grown up carrying more debt than their parents, so, to have debt in retirement does not faze them.  It is a habit that has not been broken yet, in spite of the cost of their “wants” in retirement, as opposed to their “needs”, is greater than their income can sustain.

The baby boomers are the ones who have been the prime generators of big debt loads in Canada. They know how to live large while they were working. The problem is that once they are in retirement, they have even more time now to consume, but are living on a fixed income.  All of a sudden, for many it is the first time in a very long time, they need to constrain their spending because they are living on a fixed income.  However, not all can change their behaviour, leading to the serious problem of seniors and debt.

Many of today’s seniors are entering retirement with a mortgage outstanding on their principal residence.  This is a sign of living large throughout their working years.  The baby boomers spent money on more acquisitions, and not paying down debt.  This is the first time this is happening in Canada.

The latest facts and figures will not offer any comfort I’m afraid. According to a report by the Broadbent Institute on seniors’ finances:

  • 47% of Canadians aged 55 to 64 don’t have an employer pension plan
  • 50% of Canadians aged 55 to 64 who don’t have an employer pension have less than $3,000 saved up for retirement
  • Of the Canadians without an employer pension plan those who earn $50,000 to $100,000 a year have saved up an average of $21,000
  • Of the Canadians without an employer pension plan those who earn $25,000 to $50,000 a year have saved up an average of $250
  • Less than 20% of people over age 55 who don’t have an employer pension have enough to live in retirement for five years or more
  • The poverty rates for single seniors, especially for women, is nearly 30%

What can I do now to avoid being a seniors and debt casualty?

The sooner you address debt issues, the better. Eliminating debt is an excellent first step. Contact the Ira Smith Team. We’re professional, federally licensed trustees who can help you conquer your financial problems so that Starting Over, Starting Now you can put debt behind you and start saving for the future.  Contact us today so you will live a financially healthy life, and not be one of the seniors and debt casualties.

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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SENIORS ARE CARRYING DEBT: WILL RETIREMENT SPELL POVERTY FOR YOU?

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Seniors are carrying debt.  Senior finances are nothing short of alarming. How will retirement look for you? Will you be taking part in wonderful retirement activities such as traveling the world in style? Will you continue to work in one of the jobs for retirees? Will you be at home living in poverty on a meager government provided pension?

This is such a serious issue that we have written a series of blogs on the topic which delve into WHY seniors are carrying debt.

Seniors are carrying debt – What is the current situation?

The latest facts and figures will not offer any comfort I’m afraid. According to a report by the Broadbent Institute on seniors’ finances:

  • 47% of Canadians aged 55 to 64 don’t have an employer pension plan
  • 50% of Canadians aged 55 to 64 who don’t have an employer pension have less than $3,000 saved up for retirement
  • Of the Canadians without an employer pension plan those who earn $50,000 to $100,000 a year have saved up an average of $21,000
  • Of the Canadians without an employer pension plan those who earn $25,000 to $50,000 a year have saved up an average of $250
  • Less than 20% of people over age 55 who don’t have an employer pension have enough to live in retirement for five years or more
  • The poverty rates for single seniors, especially for women, is nearly 30%

If seniors are carrying debt, will seniors be living in poverty?

According to Rick Smith, executive director of the Broadbent Institute, “This new data on retirement savings and gaps in support makes one thing perfectly clear — we have a retirement income crisis on our hands that requires urgent government action now.”  The reality is seniors are carrying debt and it’s time for the federal government to step up to the plate and in a meaningful way, increase the amount of money we give seniors. Having seniors living in poverty in the greatest country in the world is just not acceptable.

What can I do now to avoid being a senior living in poverty?

The sooner you address debt issues, the better. Eliminating debt is an excellent first step. Contact the Ira Smith Team. We’re professional, federally licensed trustees who can help you conquer your financial problems so that Starting Over, Starting Now you can put debt behind you and start saving for the future.

#VIDEO-PERSONAL BANKRUPTCY BLOG -LICENSED INSOLVENCY TRUSTEE EXPLAINS YOUR BANKRUPTCY OPTIONS#

Brandon’s Blog – not just a personal bankruptcy blog

Our Brandon’s Blog certainly is a personal bankruptcy blog, but it is more than that.  Brandon writes on various finance and insolvency related topics including corporate restructuring, corporate bankruptcy, alternatives to bankruptcy, credit counselling, restructuring through a consumer proposal or a Division I Proposal or the Companies’ Creditors Arrangement Act (CCAA).

Every Monday and Wednesday night Brandon posts to Brandon’s Blog.  Monday night is a blog and Wednesday night is a vlog.  Just to remind you what this means, here are dictionary definitions:

blog Pronunciation: /blɒɡ/noun

A regularly updated website or web page, typically one run by a person or small group, written in an informal or conversational style:  you can add personal bankruptcy blog to the growing list of insolvency-related material popping up on the Web

vlog Pronunciation: /vlɒɡ/ noun

A blog in which the postings are primarily in video form: you can add personal bankruptcy vlog to the growing list of insolvency-related material popping up on the Web

Differences between US and Canadian personal bankruptcy statutes

In the United States, people filing for bankruptcy have many “chapters” from which to choose. Similarly, Canada has one chief bankruptcy law, the Bankruptcy and Insolvency Act, or BIA, and several supporting pieces of legislation. In perusing a personal bankruptcy blog, the potential filer can find the information he or she seeks.

What are the Choices in Canada?

The BIA sets out the ground rules, and several smaller pieces of legislation fill in the details. Although we Canadians don’t call them various chapters, our legislation is like that of the U.S. Here are the options for filing bankruptcy in Canada:

Personal bankruptcy in Canada is most similar to Chapter 7 in the U.S. By filing bankruptcy, the debtor seeks to deal with his or her entire debt load at once. The debtor does not believe that he or she has the means to attempt a restructuring.  There are certain assets that are exempt for any one of a number of reasons, so anyone filing bankruptcy should consult a Trustee to find out more.

If a debtor decides to file a consumer proposal (because his or her debt load is $250,000 or less, not including any mortgages against the principal residence) or a Division I Proposal (for unsecured debts $250,000 or greater) instead, he or she is seeking a restructuring of debt so for repayment over a five years or less. Many times, debtors can negotiate with their creditors for part of the amount owed and work out deals on monthly payments, rates of interest, and other such considerations. A proposal is most similar to Chapter 13 in the U.S. and used by people who wish to AVOID bankruptcy.

In the United States, Chapter 11 bankruptcy is the most complex because it applies to large businesses and usually involves gigantic sums of money. In Canada, the equivalent is the Division I proposal. In such a proposal, the debtor’s business can keep assets necessary for its role so that it can generate streams of income from other places to repay its debts. Management also stays in control of the company and business operations.

Basically, the business operates as usual while making an offer to its creditors of payments over time, totalling an amount greater than the creditors would receive if everything was sold off in a liquidation in bankruptcy. The largest businesses might even have several layers of debt that would need restructuring as part of a Division I proposal, and each layer might have different guidance and restrictions based on the proposal.

For companies with greater than $5 million in debt, they could also make use of a different Federal restructuring statute called the Companies’ Creditors Arrangement Act (CCAA).  Both the Proposal under the BIA and a restructuring under the CCAA are for large complex corporate reorganizations.

Is a Lawyer Required?

Unlike citizens of the United States, Canadians don’t need a lawyer to file for bankruptcy. A Licensed Insolvency Trustee acts as the “referee” between debtor and creditors.  In this way people file and handle bankruptcy proceedings on their own in Canada. If the debtor has various complex issues, or is a defendant in litigation where the plaintiff wishes to continue the litigation perhaps to attempt to prove that their claim is one not released by the person’s discharge from bankruptcy, then they may very well need a lawyer for those issues.

What to do if you have too much debt and want to read a personal bankruptcy blog?

To find out more, check out our Brandon’s Blog entries for the topic of personal bankruptcy blog. If you’re dealing with serious financial issues, contact a trustee, who is the Canadian bankruptcy expert. For the reasons already given, you should do this whether or not you’re contemplating bankruptcy. The reason is very simple: the licensed insolvency trustee will assess your situation, offer you all of your available options and will do this for you for free! You can’t find a better deal anywhere.

We’re not only bankruptcy experts; we’re experts in dealing with debt. Contact Ira Smith Trustee & Receiver Inc. today for a free consultation and you will be well on your way to regaining your former quality of life Starting Over, Starting Now.

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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OUR 5 TOP TIPS IN CHOOSING A BANKRUPTCY TRUSTEE

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A bankruptcy trustee, or trustee in bankruptcy, is now called a licensed insolvency administrator.  Last week we discussed why you need a licensed insolvency trustee if you or your company has too much debt, even if you do not wish to file for bankruptcy. You should first see a licensed insolvency trustee even if you would prefer one of the many alternatives to bankruptcy. This week we’re going to give you some pointers on how to choose a licensed insolvency trustee.

Many people are under the mistaken impression that the trustee works only for you, but that’s not right. Although you can choose your trustee and you’ll be making payments to the trustee, the trustee doesn’t technically work for you.

Who does the bankruptcy trustee work for?

The trustee is an independent third-party appointed by the Official Receiver (a representative of the Office of the Superintendent of Bankruptcy) to manage the bankruptcy process. Their main job is to make sure that the bankruptcy administration to make sure that the assets are properly liquidated and that both you and your creditors follow all the bankruptcy rules.

How do I choose a bankruptcy trustee?

Here are 5 tips for choosing a trustee:

  1. If you have a friend, family member or colleague who has a bankruptcy trustee to recommend, that’s a great place to start.
  2. There’s a list of all licensed insolvency trustees and licensed insolvency trustee firms on the website of the Office of the Superintendent of Bankruptcy Canada. Always check this list to make sure that a trustee you’re interested in working with is on this list. There are unscrupulous, unlicensed debt settlement consultants and companies out there who make themselves appear as though they’re licensed trustees, but they’re not. They will either try to convince you that they can settle with your creditors on your behalf or act as a middleman (for a fee of course) and refer you to a licensed trustee.
  3. The Office of the Superintendent of Bankruptcy Canada publishes professional misconduct decisions on its website. Check to see that your trustee has a clean record.
  4. Set up a free, no obligation consultation with your trustee. Ask questions and make sure that you’re comfortable with the trustee and satisfied with the answers to your questions. If not, you can move to another trustee. A consultation doesn’t obligate you to stay with the trustee unless you’ve signed the paperwork.
  5. Do research ahead of time so that you will know the right things to ask the trustee during your free consultation. A great place to start is by watching our video 12 THINGS A LICENSED INSOLVENCY TRUSTEE MAY NOT TELL YOU.

What should you do if you have too much debt?

Ira Smith Trustee & Receiver Inc. has a great reputation and a cumulative 50+ years of experience dealing with diverse issues and complex files. We deliver the highest quality of professional service. Give us a call today and Starting Over, Starting Now you will be well on your way to solving your debt problems.

#VIDEO – HOW MUCH DO YOU HAVE TO OWE TO FILE BANKRUPTCY?#

HOW MUCH DO YOU HAVE TO OWE TO FILE BANKRUPTCY

NOT MUCH!

We are always asked, how much do you have to owe to file bankruptcy?  The real question is, here are my assets and my debts, what are my options?  In Canada, the Bankruptcy and Insolvency Act (Canada) (“BIA”) states that you must owe at least $1,000 of unsecured debt to file for bankruptcy.  The same holds true if someone owes you money.  They must owe you at least $1,000 on an unsecured basis to apply to the Court to make an Order judging a person or company into bankruptcy.  As you can see, the threshold is not very high.

HOW MUCH DO YOU HAVE TO OWE TO FILE BANKRUPTCY –

ARE YOU INSOLVENT?

Facing serious financial difficulties is devastating, especially if you believe that personal bankruptcy is your only option. In fact many people mistakenly believe that dire financial problems automatically mean personal bankruptcy. If you are having problems meeting your financial obligations or have stopped meeting those financial obligations as they come due you are actually insolvent, not bankrupt.  Insolvent is a financial condition; bankruptcy is a legal state.

Bаnkruрtсу is a legal рrосеѕѕ under the BIA that helps you to resolve уоur debts if they have become unmanageable. If you have relatively few assets and low іnсоmе and dесіdе to file for bаnkruрtсу, you will probably fіlе under the shortened Summary Administration part of the BIA. If you have realizable assets that will produce a value greater than $10,000, then your bankruptcy would be administered under the general administration provisions.  Don’t worry about these distinctions now.  For now, just know that the streamlined summary administration rules is a simpler process, and the Superintendent of Bankruptcy sets the cost of the bankruptcy administration.

HOW MUCH DO YOU HAVE TO OWE TO FILE BANKRUPTCY –

THE BANKRUPTCY PROCESS

In either case, you will turn over to your Licensed Insolvency Trustee (“LIT”) all of уоur рrореrtу that is not exempt (protected) by law. The LIT will sell your property and the proceeds used to рау for the bankruptcy administration and then to distribute to уоur сrеdіtоrѕ.

If you have very little property, all of it might be рrоtесtеd so that you will not lose it. How much уоur сrеdіtоrѕ will get in this process dереndѕ on how much уоur unрrоtесtеd property sells fоr and whether you must pay “surplus income” to your LIT.

The last step of your bankruptcy process, will be to get your discharge from your debts, meaning that you will not have to рау them all (with certain exceptions).

HOW MUCH DO YOU HAVE TO OWE TO FILE BANKRUPTCY –

SEE A TRUSTEE EVEN IF YOU DO NOT WANT TO GO BANKRUPT!

People think that they should only see a LIT if they need to file for bankruptcy.  Every LIT will give you a free 1 hour consultation, to go over your situation and offer you your available options.   The topics the LIT will discuss with you are:

As you can see, bankruptcy is only one of many topics discussed, in determining what your options are, allowing you to choose the one that makes the most sense to you.  No other professional can discuss this full range of topics with you, and especially not for free!

WHAT SHOULD YOU DO IF YOU OR YOUR COMPANY HAS TOO MUCH DEBT?

If you’re dealing with serious financial issues, contact a trustee, who is the Canadian bankruptcy expert.  For the reasons already given, you should do this whether or not you’re contemplating bankruptcy. The reason is very simple:  the licensed insolvency trustee will assess your situation, offer you all of your available options and will do this for you for free!  You can’t find a better deal anywhere.

We’re not only bankruptcy experts; we’re experts in dealing with debt. Contact Ira Smith Trustee & Receiver Inc. today for a free consultation and you will be well on your way to regaining your former quality of life Starting Over, Starting Now.

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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CANADIAN BANKRUPTCY EXPERT: FINANCIAL TROUBLE? YOU NEED A LICENSED INSOLVENCY TRUSTEE

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There are several misconceptions when it comes to the Canadian bankruptcy expert known as a licensed insolvency trustee and that the role of the trustee is only for the bankruptcy process. It is true that a licensed insolvency trustee is the Canadian bankruptcy expert, but it is not the case that a licensed insolvency trustee only can administer Canadian bankruptcies.

  1. Misconception # 1 is that trustees only deal with bankruptcy. Although you may know trustees as Canadian bankruptcy experts, they’re also highly trained and educated debt consultants who, depending upon your particular circumstances, can offer you several bankruptcy alternatives which include credit counselling, debt consolidation and consumer proposals.
  2. Misconception # 2 is that because bankruptcy is a legal process, you need a lawyer. Although you may have heard many radio commercials telling you that you need a lawyer if you’re going to declare bankruptcy, and if you are dealing with income tax debt to keep using a certain lawyer and not a licensed insolvency trustee, this is simply not the case. Even though bankruptcy is a legal process, to file bankruptcy in Canada you need the services of a licensed insolvency trustee. In fact bankruptcies and consumer proposals can only be administered in Canada through a licensed insolvency trustee.

What is the role of a trustee in the bankruptcy process?

The Office of the Superintendent of Bankruptcy (OSB) licenses trustees to administer bankruptcy proceedings. When you file for bankruptcy, the trustee becomes the administrator of your property and assets.

Why use a trustee instead of a debt settlement company?

Debt settlement companies can’t administer a bankruptcy or a consumer proposal – ONLY a licensed insolvency trustee can. In addition a trustee:

  • is federally regulated
  • has undergone a background check by the RCMP before being granted a licence
  • is subject to a stringent code of ethics
  • maintains his/her competency by completing ongoing mandatory professional development each year
  • The Federal Government and the Court regulate trustees’ fees and for consumer matters, they are usually less than the fees of the debt settlement companies who make unsubstantiated claims

What should you do if you or your company have too much debt?

If you’re dealing with serious financial issues, contact a trustee, who is the Canadian bankruptcy expert.  For the reasons already given, you should do this whether or not you’re contemplating bankruptcy. The reason is very simple:  the licensed insolvency trustee will assess your situation, offer you all of your available options and will do this for you for free!  You can’t find a better deal anywhere.

We’re not only bankruptcy experts; we’re experts in dealing with debt. Contact Ira Smith Trustee & Receiver Inc. today for a free consultation and you will be well on your way to regaining your former quality of life Starting Over, Starting Now. Our license allows us to practice in the Province of Ontario (ON), so we are bankruptcy experts in ON.  Read our blog next week when we’ll be discussing how to choose a bankruptcy trustee.