There are now some new Baby Boomers characteristics. Baby Boomers are now between the ages of 54 and 72. Their new characteristics are now defined by definitely not being a one-size-fits-all group. The broad range in their ages and stages has divided them on whether or not to downsize.
Baby Boomers characteristics: The issues
Baby Boomers are healthier and working longer than previous generations; as a result, they’re not ready to sell their homes and downsize or move into retirement facilities. Others may not want to sell and downsize because of thehot housing market. And there’s a significant generational change that is preventing Baby Boomers from downsizing – their kids haven’t moved out.
Baby Boomers characteristics: Some stats
Statistics Canada reports that just over 33% of young adults, aged 20 to 34, lived with their parents in 2016. In Ontario, the number was higher – 42.1%.
According to a survey by Royal LePage:
59% of Baby Boomers are renovating rather than moving
52% of Baby Boomers say they won’t be downsizing
18% of Baby Boomers said they didn’t expect their children to leave home before the age of 30
9% of Baby Boomers said they didn’t expect their children to leave before 35
44% of Baby Boomers would bewilling to contribute up to 25% of the cost of their child’s home
Baby Boomers characteristics: Baby Boomers not downsizing
Although economists expected Baby Boomers to downsize in large numbers, that just isn’t happening. With the relatively new phenomena of adult children living at home, Baby Boomers are making the decision to renovate instead of move.
Downsizing is increasingly shifting to their 80s when they can no longer care for their homes. Although it’s a generous thought tohelp your children buy a house, Baby Boomers really need to consider whether or not that makes good financial sense for them or can potentiallyjeopardize their retirement. In addition, helping your children purchase a house that they can’t afford may do more harm than good.
Baby Boomers characteristics: Some Baby Boomers need a financial plan
If you’re in a financial quandary because you’ve helped your adult children purchase a house, or if they now find themselves with a house they can’t afford, seekprofessional help immediately.Ira Smith Trustee & Receiver Inc. is a full-service practice serving people just like you throughout the Greater Toronto Area (GTA) who need a plan forStarting Over, Starting Now. Give us acall today. We can give you peace of mind and set you on a path to debt free living.
After fully completing a consumer proposal or receiving a discharge from bankruptcy, it is important to start immediatelyrebuilding credit Canada. The purpose of this Brandon’s Blog is to provide you with our foolproof and painless 3 step plan to eliminate those negative credit checks and fix your credit trouble by rebuilding credit Canada.
Rebuilding credit Canada: Step 1 – Create good habits with a plan for discipline and self-control
After your discharge from bankruptcy or the full completion of a consumer proposal, you must create good habits of discipline and self-control. You won’t have any credit accounts and your goal is to show the credit bureaus that you can use credit responsibly and work your way back from bad credit score.
To do that, you need good new financial habits. You need to start creating a good payment history. A lack of these habits might have been partly responsible for your current situation, so working on changing bad habits, and creating new ones will lay the groundwork for a successful financial future.
Research has shown that on average, it takes more than 2 months before a new behaviour becomes automatic – 66 days in fact. So, while at the beginning, having to be disciplined and exert self-control over spending money mistakes might seem like hard work, stick with it for a couple of months, and very soon it will just become part of your daily routine.
Learn discipline through budgeting. You may be able to find a pretty good yet simple budget calculator spreadsheet. Aside from rebuilding your credit, learning how to create a realistic budget by looking at your essential expenses compared to your current level of everyday purchases. This will allow you to get a good handle on what your income requirements are and then sticking to it is the most important step of rebuilding credit Canada after bankruptcy or consumer proposal.
You’ll be looking closely at your money and personal income anyway, so use this time to get a real grasp on your entire financial situation. Take a look at credit cards and related statements. By only making the minimum monthly payment you are being charged interest. Look carefully at what the rate on purchases is that you are really paying.
Understand where your money comes from, and, more importantly, where you spend every penny. You’re going to need to make friends with spreadsheets and familiarize yourself with all your bank and bill statements. Create categories of all your expenses (e.g. rent, electrical bills, car insurance, groceries etc.) Using your past bank statements, look at your current spending plan in each category. You’ll probably be surprised at how much money you spend in some!
Set limits for how much you will spend per month in each category. This will likely mean making some sacrifices to ensure your budget balances (the total amount being spent does not exceed the total amount coming in). However, be realistic – don’t tell yourself you’re going to stop doing things you enjoy together. Instead, cut down on how often you do them. E.g. the budget spending plan for a meal out could be once a month rather than a couple of times a week.
Get in the habit of planning and recording every single expense, no matter how small. Keep receipts and go over where your money has gone every month. Plan rewards for different milestones along the way. It’s important to have things to look forward to and motivate you along the way.
Budgeting takes discipline and sacrifice but stays focused on the goal. You’re doing this to ensure you don’t fall back into the same bad habits as before. You are going to have to change some things – and what better time than while you’re starting over? You’re already doing the work, now the trick is to make this disciplined.
Practice self-control in your spending (and saving!) The golden rule of spending? Learn to live within your means – it sounds simple, but it can very hard to do. However, those who live within their means do not get into trouble with debt, and that’s what you’re working towards for the future! You’ve created a budget, you know exactly what you can spend in each category, now you need to execute on that. By following your
While in bankruptcy or a consumer proposal, any excess money you earn is going to go to your debtors. That may make it seem impossible to save. However, saving money should always be in your plan.
As soon as you are discharged from bankruptcy or your consumer proposal, start saving money every month. Work a specific amount (we recommend 10%) into your budget so that you learn to live within that new budget spending plan. Setting up automatic payments and transfers into your savings account on payday will ensure your money goes where it needs to before you even have time to think about spending it.
So where should this money go? First, establish an emergency fund so that you can avoid facing bankruptcy again in the future. A good emergency fund should cover at least 3 months of living expenses. Once your emergency fund is built, continue to save by contributing to your RRSP or TFSA as much as you possibly can while still meeting your month-to-month expenses.
Forming good habits of discipline and self-control is key to your permanent financial rehabilitation. Once you do so, you’ll find that building your credit will be relatively easy!
Rebuilding credit Canada: Step 2 – Work to rebuild your credit after bankruptcy or consumer proposal
It is true that a record of your insolvency filing will stay on credit reports. This is so for both a consumer proposal (3 years!) or a bankruptcy (7!). However, you can actually start rebuilding credit Canada right away.
There’s an old saying that goes “The best time to plant a tree was 20 years ago. The second-best time is now.” We recommend that you don’t wait 20 years, or even 3.
Here’s what you need to know to start building credit and improving your credit reports today:
Secured Credit Card – A secured credit card looks and functions just like a regular unsecured credit card, with your lender reporting to the credit bureaus on a regular basis. The only difference is that you put up an initial deposit as a security deposit in the form of cash. The minimum deposit or the maximum deposit you can afford to make acts as collateral upfront makes it a secured credit card. The amount of cash you put up as a deposit dictates your credit limits.
rebuilding credit canada
This protects the lender from the possibility of you defaulting on what you owe because your security fund will be used to cover any outstanding amounts. When you use this type of card, as far as the vendor is concerned, it acts just like an unsecured credit card. Every month when you pay off the balance by making your payments on time, it is reported to the credit bureaus. Then each credit bureau can update their records showing you are paying it off on time. That is how it can rebuild credit Canada.
A Secured Line of Credit – Much like a secured card, a secured line of credit is a revolving credit that is secured by the money or other security, you offer up in the beginning. As you use your line of credit and you make your payments on time, you will establish a picture of good money reminders habits which will both boost your credit score. These lines of credit are available through most banks. Again, creditworthiness and collateral, if required, set the credit limits.
Create Your Own Credit Building Programs – Credit building programs are one of the most effective methods for rebuilding credit after bankruptcy or consumer proposal. Programs like borrowing a small amount to invest in your RRSP. Then repay the loan in full before the next RRSP year.
This is beneficial in 3 ways: You don’t have to come up with the funds, you are investing in your future and by repaying the loan, you are showing you can handle credit properly which improves your credit score. This should also be combined with a secured card or line of credit, do double up on your credit score building program. Paying your bills on time also improves your credit score.
You want to follow your budget carefully. Avoiding late payments, making the full payment each month on your monthly credit card balance, not just the minimum payment, and don’t have a missed utility payment. Having timely payments and no late payments on your Canadian credit history, will take a poor credit score and start improving your credit rating by creating a new positive credit history.
An improved credit rating and improving credit reports will overturn the negative effects of your bad credit history, get your credit score ranges to improve, get you the credit score increase you deserve and catch the attention of the credit card company and improve your chances of access to credit products.
These new types of credit becoming available to you, and perhaps even existing credit card issuers giving you a credit limit increase, all go towards your rebuilding credit Canada. But you still need to stick to your spending plan. Just because you are getting access to credit again, does not mean you can abandon your proper budgeting. You don’t want to go back to the old habits that produced the poor credit history.
Whatever kind of credit loans you are looking to take out to help rebuild your credit, make sure you understand things properly. Read the credit applications carefully to see what you are really signing up for. If approved, read the credit agreement carefully so you will fully understand all the terms of the rebuilding credit Canada loan product.
As your credit reports improve, you will find new companies offering you new credit accounts and credit card providers either increasing your credit card limit or sending you applications for new credit cards lines. Again a word of caution. Don’t get carried away with all sort of credit products in your daily life. Keep it simple and stick to your budget. You really may only need one regular credit card from amongst the wide range of Canadian credit cards becoming available to you.
rebuilding credit canada
Rebuilding credit Canada: Step 3 – Maintain your spending plan good habits for the rest of your life
Rebuilding credit Canada is not a one-time event. Think of rebuilding your credit after bankruptcy like losing weight. In the beginning, dragging yourself to the gym and making kale smoothies is hard work. However, as you start to see the weight drop, it becomes easier and easier.
What happens when you reach your goal weight? Do you stop going to the gym and start eating pizza for breakfast? No! You just carry on as you are now – because it’s become a habit, and if you slip back into old habits, you’re quickly going to see all of your hard work come undone.
Regularly checking your full credit reports from both credit reporting agencies will help you see how your good habits are paying off. Kinda like weighing yourself to make sure you’re still where you want to be. If you start seeing negative results, take stock of what’s happening in your life that could be causing it and make changes to quickly get back on track. You want to keep seeing improvement in your credit reports.
Ultimately, whether you’re declaring bankruptcy or entering into a consumer proposal, it will be emotionally difficult. There is a light at the end of the tunnel though. Many people don’t realize that you can start building credit while going through both a bankruptcy or consumer proposal so that at the time of discharge, you’re already a few steps ahead. Follow these steps and you’ll find that rebuilding your credit after bankruptcy isn’t that difficult.
Rebuilding credit Canada: Do you know anyone who needs to get back on the road to financial recovery?
If you have too much debt, are unhappy with your debt situation and need someone to talk to about how a consumer proposal or even personal bankruptcy can fix your credit issues and improve your financial life, call the Ira Smith Team. We are professional credit counsellors and can help you learn good spending habits. Through consumer proposal payment arrangements you can make steady payments on prescribed payment dates. This will allow you to avoid bankruptcy by paying only a fraction of your total debt yet eliminate all of your debt. It will also get you credit repair.
We will listen to your issues and provide you with our thoughts and recommendations for free. That’s right; a no-cost initial consultation. We will look at your debt utilization and make recommendations to you on how to fix it. So why not? All you have to lose is your stress while rebuilding credit Canada. Why not fix things now so that your credit checks improve.
We will advise you whether or not we think you are a candidate for either a consumer proposal or bankruptcy. If we feel you can solve your financial problems without an insolvency process, we will tell you straight. The Ira Smith Team understands the stress you are under and the pain it is causing you and your loved ones.
We can eliminate your pain. I guarantee that you will start feeling better right away after our free initial consultation. Taking action after that will put you on the right path, Starting Over Starting Now
Baby Boomers in Canada are not retiring like the generations before them. As we discussed in arecent blog, there are many good reasons to keep working beyond age 65. Although Baby Boomers are the generation that has already reached aged retirement age or are fast approaching it (Baby Boomers are born from 1946 – 1965), many of them are not financially able to retire.
Baby Boomers in Canada: Franklin Templeton Investments Canada study
75% of pre-retiree Baby Boomers surveyed said they felt anxious or stressed about their retirement savings or investments
40% said they expected to rely on a government pension as their primary or secondary source of income
50% who had already retired said their government pension was their primary or secondary source of income
Baby Boomers in Canada: Canada Pension Plan (CPP)
There is good news for Baby Boomers relying on government pensions. According to the Government of Canada, up until 2019, the CPP retirement pension replaces one-quarter of your average work earnings. This average is based on your work earnings, up to a maximum earnings limit each year. Other sources of income—such as the Old Age Security program, workplace pensions, and private savings—make up the rest of your retirement income.
Beginning in 2019, the CPP will begin to grow to replace one-third of your average work earnings. The maximum limit used to determine your average work earnings will also gradually increase by 14% by 2025.
As a result, pension amounts will increase by more than 33%. Your pension will increase based on how much and for how long you contribute to the enhanced CPP. You will get the full increase if you contribute to the enhanced CPP for 40 years.
The enhancement also applies to the CPP post-retirement benefit. If you are receiving the CPP (or QPP) retirement pension and you continue to work and make CPP contributions in 2019 or later, your post-retirement benefits will be larger.
Baby Boomers in Canada: Many just want to work
In addition to the financial benefits, many Canadians prefer to keep working beyond the retirement age. Work provides a sense of accomplishment, a social environment, keeps the mind sharp and the body active.
Baby Boomers in Canada: Are you a Baby Boomer who’s still paying off debt?
However, if you’re one of the Baby Boomers who’s still deep in debt, you needprofessional help now. Although your situation may feel hopeless, there are solutions to every problem with immediate action and the right plan.
We always perform an initial free consultation with people thinking about filing either a consumer proposal or bankruptcy. People ask me, what if I can’t create a list of all my creditors?
Consumer proposal or bankruptcy: A refresher
If you are a regular reader of my Brandon’s Blog, then you know the difference between a consumer proposal vs bankruptcy. For those of you who need a brief refresher, both the consumer proposal and bankruptcy are different processes under the Bankruptcy and Insolvency Act (Canada) (BIA). To file either one, the person must be insolvent. That means that they cannot meet their liabilities as they become due and if they liquidated all their assets, it would not produce enough cash to pay of all the debts.
Consumer proposal – This is a restructuring process to avoid bankruptcy for any person who owes $250,000 or less, not including any mortgage or line of credit debts secured by a mortgage registered against their home. The purpose of a consumer proposal is to AVOID bankruptcy.
Division I proposal – This is a restructuring process for people who owe too much money to fit under the consumer proposal rules. A company can also reorganize under this section of the BIA.
Bankruptcy – If a person cannot successfully carry out a restructuring proposal but requires relief from their crushing debts, then they would file for bankruptcy. In this process, subject to certain provincial exemptions, you would hand over your assets to the licensed insolvency trustee (Trustee). The Trustee would then sell the assets for cash, call for your creditors to file a proof of claim with the Trustee and then distribute the money according to the rules of the BIA.
Consumer proposal or bankruptcy: A common question
Regardless of whether the person is thinking about a consumer proposal, Division I proposal or bankruptcy, a common question is: (i) what if I don’t know who all my creditors are; or (ii) what if I leave off some creditors from my sworn statement of affairs; or (iii) do I have to list all of my creditors?
Some of our clients come to us, tell us that they don’t even know who their creditors are. Sometimes it’s been such a long time that they don’t even receive the bills or notices anymore and their memories aren’t good enough. So here is an easy hack so that you can put together a list of most, if not all, of your creditors.
Consumer proposal or bankruptcy: The easy hack
We will add CRA to your statement of affairs. If you don’t know how much you owe them, we will put them in showing either “$1” or “Unknown” as a placeholder
Every person must file an income tax return. Most people know whether they are current or not in their tax filings. So Canada Revenue Agency (CRA) should always be listed.
CRA cannot file an accurate proof of claim if you have not been current in your income tax filings. So we tell everyone to file all outstanding tax returns and provide us with a copy before filing either a consumer proposal or bankruptcy.
Pull your credit report
You may obtain your credit report from either Equifax or TransUnion. Your credit report will list all those who you owe money to and who wanted to update their files with your new credit score. We will add those creditors to your statement of affairs also.
Check your mail and save the bills
No doubt your creditors will keep mailing your statements. Even if all it says is balance forward unpaid, or is from a collection agency or lawyer, it will list their address, their name and the amount they say you owe. We will put that information on your statement of affairs.
Have your lawyer do an execution search
Your lawyer can easily do an execution search. This search will show who holds a judgement against you and some basic details. We will add those details to your statement of affairs.
Consumer proposal or bankruptcy: The test is due diligence, not perfection
The test is, did you use your best efforts to identify all of your creditors on your sworn statement of affairs. It is very rare that any of our clients know exactly how much they owe. It is normal for the amounts according to the sworn statement of affairs to be different from the proofs of claim filed. That is OK.
Sophisticated large creditors pay the Superintendent of Bankruptcy to get a download of insolvency filings on a regular basis. They match the names of those who have filed against their client database. If a client shows up that they did not have listed as having filed, they contact the Trustee. Once they contact us, we send them a creditor’s package. They will then be able to further check their records and if owed money, can file a proof of claim.
We had a client who said they mistakenly left off a few creditors in their proposal filing. Those creditors found out. All those creditors had judgements against the person who filed the restructuring proposal. These creditors were very mad at being left off the list, although they did not suffer any damages.
It made it much tougher for the person and us to get a deal struck with all the creditors. At the end of the day, a deal was struck and the person is currently performing and is currently making their payments under the restructuring proposal. The anger of these creditors rubbed off on creditors who would have otherwise been happy with a lesser proposal. So in the end, leaving these creditors off the initial sworn statement of affairs just cost them more money!
Consumer proposal or bankruptcy: Corporate filings
In terms of a corporation filing either a restructuring proposal or bankruptcy, we normally don’t incur the same issues. A company will have an accounting department and/or an accounting system. They will be able to produce a list of creditors. The amounts shown may not be current, but the list of names and addresses will be reasonably accurate.
However, the easy hack I described above also works for a company.
Consumer proposal or bankruptcy: More free stuff
I hope that you have found my free easy hack useful to answer the question of how to create a list of all my creditors. You can use it if you wish to do proper budgeting, which everyone should do. You don’t have to wait until you are insolvent!! With proper budgeting, you can avoid insolvency and therefore bankruptcy.
If you have too much debt and need someone to talk to about consumer proposal vs bankruptcy, call the Ira Smith Team. We will listen to your issues and provide you with our thoughts and recommendations for free. That’s right; a free initial consultation. So why not? All you have to lose is your stress. We will advise you whether or not we think you are a candidate for either a consumer proposal or bankruptcy. If we feel you can solve your financial problems without an insolvency process, we will tell you straight.
The Ira Smith Team understands the stress you are under and the pain it is causing you and your loved ones. We can eliminate your pain. I guarantee that you will start feeling better right away after our free initial consultation. Taking action after that will put you on the right path, Starting Over Starting Now.
Today’s Brandon’s Blog discusses the notion that financial goals for millennials are being hurt by baby boomers. Not only are we living longer; we’re living better. The expression “65 is the new 55” seems to quite accurately describe the changes in our workforce.
Financial goals for millennials: Baby boomers are working longer
Thanks to no mandatory retirement in Ontario, Baby Boomers can work well past 65. According to 2016 census figures, 20% of Canadians are working, either full or part-time, paid or unpaid, past 65. The number of post-retirement workers has doubled since 1995. Unfortunately for millennials who are blaming their financial woes on the Baby Boomers, working longer makes good financial sense.
Financial goals for millennials: The academic’s view
Craig Riddell, a UBC professor of economics, says, “One of the principal causes is increased longevity, and people are staying healthy longer. Another important factor is the decline in pension coverage, especially in the private sector of the economy, and a gradual switch from defined benefit plans to defined contribution plans.
There is no incentive to retire early with the Canada Pension Plan (CPP) if you like working. CPP no longer has a specific retirement age, such as 65. Instead, there is a retirement “window” between the ages of 60 and 70. The later you retire, the larger your monthly payment. If you are going to live an average lifetime, you will get the same amount in total. You don’t pay a penalty by retiring later. If you retire at 60, you get the lowest payment”.
Financial goals for millennials: The benefits to working past 65
Although millennials are against the trend, there are many benefits to working past 65. Karen Zeleznik, a financial planner at Libro Credit Union reports that:
Canada Pension Plan benefits jump by 42% if you delay taking them until age 70, even more, if you keep contributing
Old Age Security payments work on the same principle, but some or all is clawed back for those with high incomes
Many private-sector plans also offer fatter pensions if retirement is put off past 65
Tax bills increased by a higher tax bracket from “double-dipping” can be reduced with spousal income splitting
In the end, it comes down to one thing: How long are you going to live?
It’s a question of taxation, lifestyle and life expectation. If you live to be 90, sure, delay it, because you will get more for a longer time. It’s just math
Financial goals for millennials: Working past 65 is a great advantage
Working past 65 is a great advantage for Baby Boomers who have not saved enough money to retire comfortably. As long as they keep working they can enjoy a lifestyle that they’re accustomed to and enjoy. And many, plain and simply, enjoy working.
Although millennials like to blame Baby Boomers for their financial woes, the high cost of living and the astronomical cost of housing are the real culprits, not the lack of jobs. The job market can be challenging whether or not the Baby Boomers are working longer. And the reality is that millennials will likely have to work longer as well, due to the increased life expectancy and disappearance of defined pension plans.
Financial goals for millennials: Are you struggling financially?
If you’re a millennial who’s struggling financially, you need to take action before things become dire. Consult a professional trustee for help with your financial problems. The Ira Smith Team can help you get back on your feet financially and start saving for your retirement so that perhaps you won’t need to work past 65. Give us a call today and Starting Over, Starting Now, you can put your financial woes behind you.
I am often asked general questions about the Bankruptcy and Insolvency Act Canada. Sometimes it is about the application of a certain section or topic. Other times, it is a simple question such as where can I find a copy that I can look at?
The purpose of this Brandon’s Blog is to list the most often asked questions. Not all of them may be of interest to you. However, for those that have questions about the Bankruptcy and Insolvency Act, hopefully at least one of these questions (and the answer) will be of interest to you.
So here we go.
Is there a book that explains the various topics and sections of the Act?
Yes, there is. The book is an annotated version of the statute. It has the complete Act and its rules and regulations. In addition, the annotations provide explanations on the application of each section as well as a listing of decided cases to support the explanations.
Can I look up the Act and decided cases somewhere online for free?
Where can I find a listing of the many forms that a licensed insolvency trustee uses?
The best place to find all the mandated forms is on the website operated by the Government of Canada, Office of the Superintendent of Bankruptcy. It lists all the forms. They are also downloadable as pdf forms.
Can I perform a bankruptcy search?
People ask me if they can perform a Bankruptcy and Insolvency Act Canada search. What they really mean is can they perform a search to find out if a specific person or company did a personal or corporate filing under the Canadian bankruptcy system. The answer to this question is yes.
The Office of the Superintendent of Bankruptcy operates a database for people to search the bankruptcy and insolvency records in Canada. The database can be accessed for free by a licensed insolvency trustee. Any member of the public can do the same search for the cost of $8 per search. Eventually, the Government of Canada is going to move to a free system, but it is not in place yet.
What are the Bankruptcy and Insolvency Act Canada regulations?
The Bankruptcy and Insolvency Act Canada regulations, otherwise known as the bankruptcy rules, form part of the Act itself. The pure legislation contained in the various sections of the Act is just that; the legislation. However, there are practical considerations which also need clarification. Such clarification is found in the Rules contained in the Bankruptcy and Insolvency Act (Canada). For example, the rules describe steps to abide by a specific section of the Act, or who is responsible for establishing Court fees.
Is their equal treatment for all unsecured creditors?
This is always an interesting question. The answer is also confusing to many lay people. The answer is both no and yes. I will explain. There are two types of unsecured creditors; preferred unsecured and ordinary unsecured. Many people forget this.
All ordinary unsecured creditors ARE treated equally. Their claims rank equally. The licensed insolvency trustee (formerly called bankruptcy trustee) paying a dividend to the ordinary unsecured creditors, they will all receive theirs in proportion share. The calculation is based on their respective ordinary unsecured claims.
The preferred unsecured creditors ARE NOT treated equally. The Bankruptcy and Insolvency Act Canada section 136 sets out the scheme of distribution for the rank of the claims. Payment to preferred creditors ALWAYS happens BEFORE payment to ORDINARY creditors.
The preferred creditors
However, preferred unsecured creditors are not equal. The Act states that there is a ranking of claims within the preferred group. The list and order of priority of the major types of preferred creditors are as follows:
for a deceased bankrupt, the reasonable funeral and testamentary expenses incurred;
the levy payable by the licensed insolvency trustee under section 147 of the Act;
any wages, salaries, commissions, compensation or disbursements owing to employees for the six month period prior to the bankruptcy;
municipal taxes assessed or levied against the bankrupt, within the two years before the bankruptcy, that is not secured against the real property;
the commercial landlord for arrears of rent for three months immediately before the bankruptcy and accelerated rent for not more than three months following the bankruptcy (if entitled to accelerated rent under the lease);
one bill of costs of a lawyer for the creditor who first attached by way of garnishment or filed with the Sheriff an attachment, execution or another process against the property of the bankrupt;
indebtedness of the bankrupt under any Act about workers’ compensation, unemployment insurance or under any provision of the Income Tax Act creating an obligation to pay to Her Majesty amounts that have been deducted or withheld;
claims resulting from injuries to employees of the bankrupt for which there will be a receipt of money from persons guaranteeing the bankrupt against damages resulting from those injuries; and
any other claims of the Crown
The Trustee must pay the claims of the preferred creditors in full, less the statutory levy mentioned above. If there are insufficient funds to pay some or all the preferred creditors, then their claims become ordinary unsecured claims.
In personal bankruptcy, are there any claims not discharged upon the person receiving their absolute discharge from bankruptcy?
Yes. The Bankruptcy and Insolvency Act Canada section 178 lists the claims not discharged in a person’s bankruptcy. Such debts are:
a fine, penalty, restitution order or other order similar in nature imposed by a court in respect of an offence, or any debt arising out of a recognizance or bail;
any award of damages by a court in civil proceedings in respect of bodily harm intentionally inflicted, sexual assault, or wrongful death as a result of such an act;
a debt or liability for alimony or support under a court order or valid written agreement;
the debt or liability arising out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity;
debts or liabilities resulting from obtaining property or services by false pretenses or fraudulent misrepresentation;
the entitlement to a dividend a creditor would have received on any provable claim not disclosed to the trustee unless the creditor had notice or knowledge of the bankruptcy and failed to take reasonable action to prove a claim;
any debt or obligation of a loan made under the Canada Student Loans Act, the Canada Student Financial Assistance Act or any enactment of a province that provides for loans or guarantees of loans to students where the date the person ceased being a full or part-time student was within seven years before the date of bankruptcy;
All claims against a bankrupt person are discharged when the person obtains their absolute bankruptcy discharge except those indicated above.
Student loans
There is an additional provision in the Bankruptcy and Insolvency Act Canada student loans section. It states that any time after 5 years after the bankrupt person has ceased to be a full or part-time student, they can apply to the Court for relief. The Court can cut the student loan debt if proved that the bankrupt person:
has acted in good faith in trying to repay the student loan debt, and
the bankrupt person has and will continue to experience financial difficulty and will be unable to pay the debt
What is the history of the Bankruptcy and Insolvency Act in Canada?
The Bankruptcy and Insolvency Act in Canada has a very interesting history. The Bankruptcy and Insolvency Act of Canada has its origins in the Bankruptcy Act of 1919. The Act changed in 1949. In terms of the history of our country, this means the Act is a relatively young piece of legislation. The reason for the enactment is that every modern society has to realize that some of its citizens and businesses will run into financial trouble. A modern and efficient economy has to have the means to help those people and businesses out of their trouble. Everyone deserves a fresh start. To redeploy a company’s assets there must be a formal system to allow this to happen.
The Act changed again in 1992, 1997 as well as 2008-2009. The 1992 reforms concentrated on maximizing value for creditors with reorganization and rehabilitation, boosting the fair distribution to employees and providers of goods and services to the bankrupt company.
The 1997 reforms urged consumer debtor responsibility and boosted the reorganization stipulations as well as the administration of the Act. It introduced new sections dealing with the insolvency of securities firms and dealing with global insolvencies. The 2009 reforms, had 4 primary aims:
to urge the restructuring of viable, but financially hampered companies;
to better secure workers’ insurance claims for wages and holiday pay;
making the bankruptcy system fairer and lower abuse; and
to improve the administration of the Canadian bankruptcy system.
Is the Act federal or provincial legislation?
Federal legislation. The name of the Act gives the answer. Its name is the Bankruptcy and Insolvency Act Canada. Although there are laws in each Province that will come into play during the administration of a bankruptcy or reorganization, the Act is Federal.
If you have any questions about how the Canadian bankruptcy system works or feel that someone you know could benefit from a free first consultation with a professional licensed insolvency trustee, feel free to contact me.
The Ira Smith Team have decades of experience in both personal and corporate insolvency matters. We can handle complex corporate and other business financial restructurings as well as personal financial problems. In both corporate and personal insolvency matters, we first look at how we can reorganize and restructure the person or business to do a rescue.
We live in a time of interesting politics when it comes to trade and development. Unfortunately, due to the trade war between the U.S. and Canada, many products are now considerably more expensive. Sincehousehold debt is at record highs and many Canadians are alreadyliving paycheque to paycheque, the price hikes on popular products can cause a significant impact on your finances. The best way to keep your spending in check is to show your patriotism and buy Canadian.
Trade and development: The Canadian list
According to the Retail Council of Canada, this is a list of popular products that will cost you more if not sourced locally or from a country other than the U.S.:
Yogurt
Roasted coffee – not decaffeinated
Maple sugar and maple syrup
Licorice candy and toffee
Sugar confectionery
Chocolate in blocks, slabs or bars
Pizza and quiche
Cucumbers and gherkins
Strawberry jam
Orange juice, not frozen
Soya sauce
Tomato ketchup and other tomato sauces
Mayonnaise and salad dressing
Mixed condiments and mixed seasonings
Soups and broths
Waters, including mineral aerated waters containing added sugar or flavour
Whiskies
Manicure or pedicure preparations
Hair lacquers
Pre-shave, shaving or after-shave preparations
Preparations for perfuming or deodorizing rooms
Organic surface-active products and preparations for washing the skin
Automatic dishwasher detergents
Candles
Plastic sacks and bags
Tableware and kitchenware
Plywood, consisting solely of sheets of wood other than bamboo
Paper and paperboard
Toilet paper
Handkerchiefs, cleansing or facial tissues and towels
Tablecloths and serviettes
Printed or illustrated postcards
Printed greeting cards, with or without envelopes
Cast iron grills
Combined refrigerator-freezers
Dishwashing machines
Lawnmowers
Inflatable boats
Sailboats
Motorboats
Mattresses
Sleeping bags
Pillows, cushions and similar furnishings of cotton
Playing cards
Ballpoint pens
Felt-tipped and other porous-tipped pens and markers
Trade and development: Be a nationalist and save money
Many of these products are manufactured in Canada so perhaps this is a good opportunity to make mindful purchases, whether or not there is a trade war on. E.g. Quebec produces 72% of the world’s maple syrup, so why would we ever buy it from the States? President’s Choice has an extensive list of products that are manufactured in Canada. As a nation, we have a long tradition of making Whiskey, so if that’s your pleasure, try a Canadian brand. With a little research, you could become quite the expert in buying Canadian and save a lot of money in the process.
Trade and development: What to do if you have too much debt
If the spike in prices because of the tariffs could put a strain on you financially, then the time forprofessional help is now. Unfortunately, we can’t remove the tariffs, but can help you deal with debt. AtIra Smith Trustee & Receiver Inc. we believe that financial problems can be solved with immediate action and the right financial plan. You can put your financial problems behind you and live a debt free lifeStarting Over, Starting Now. We’re just aphone call away.
This Brandon’s Blog is about Toronto real estate and what happens when the purchaser experiences buyer’s remorse. “When the residential real estate market is a rising market, most people – perhaps with the exception of first-time buyers, are happy homeowners and investors. When the market turns and drops, it is not for the faint of heart.” This is how Justice M.L. Edwards begins his Reasons for Decision in Gamoff v. Hu, 2018 ONSC 2172 (CanLII).
The realities of this situation show how one family came to be involved in a bidding process. Determined to get their dream house, they exhausted their ability to fund the acquisition of that residence. We will describe this case which is similar to several people my Firm has helped overcome their financial problems after being found liable for similar amounts the defendants, in this case, were found responsible for.
Toronto real estate: The Toronto real estate market news facts
Douglas and Sheila Gamoff (the “Gamoffs” or the “plaintiffs”) were the owners of a residential property. The home was in Stouffville, Ontario (the “Home”), part of the GTA. The plaintiffs listed the Home for sale on the multiple listing service on March 29, 2017. Within a fairly short amount of time (March 29, 2017, to April 2, 2017), there were 18 offers.
The defendants, Yixing Hu and David Lea, saw the Home with their real estate agent on April 1, 2017. They state that they told their real estate agent that they had an interest in acquiring the Home. They also didn’t want to be involved in a bidding price battle.
The defendants originally submitted their written offer on April 1, 2017, with an offer of $2,050,000. On April 2, 2017, the defendants were told by their real estate agent that there were several deals for the residential property. Their realtor also told them that their offer of $2,050,000 was not accepted. In spite of having informed their real estate agent that they did not intend to end up being in a bidding war, they inevitably submitted a new offer for $2,250,000. The vendors accepted the revised offer.
The deal had no conditions. The agreement of purchase and sale read that the purchasers provided a deposit in the amount of $30,000 upon acceptance of the offer. It further read that a second down payment tranche of $90,000 would be made on April 6, 2017. The date for the second deposit payment was then amended to April 10, 2017. The closing day for the acquisition of the Home was August 30, 2017.
Toronto real estate: It did not take long for buyer’s remorse to arise
On the same day, the defendants called their real estate agent. They suggested to him that they thought that they had actually paid way too much for the Home. Their issue here was no doubt created by the fact that they had just found out that, a mix of their mortgage loan funding and the value of their house yet to be sold, would not be enough for them to get the essential funding to close on their purchase.
David Lea emailed his real estate agent stating to him that he and Ms. Hu had actually slipped up aiming to acquire the Home. Mr. Lea went on to say in this email that he is begging, please contact the vendor’s agent with a new firm offer.
As I previously stated, the agreement of purchase and sale did not have any conditions in it to allow them to end the agreement and get back their first tranche deposit. The agreement certainly was not conditional either on their obtaining satisfactory mortgage financing or the sale of their existing home. That is enough stress to cause anyone to panic which no doubt led to their buyer’s remorse.
Toronto real estate: The purchaser’s default
On April 10, 2017, the purchaser failed to pay the 2nd payment needed by the change to the agreement of purchase and sale. On the following day, the defendants visited the property. They informed the plaintiffs face to face that they did not actually have the funding needed to complete the purchase.
Toronto real estate: The vendors’ mitigation
The Gamoffs first consulted with their lawyer. Then on May 1, 2017, they listed the Home for sale again on the multiple listing service for $2,250,000. From May 1 to May 16, 2017, the plaintiffs got no offers on the Home.
The Gamoffs lowered the listing price of the Home to $1,998,000 on May 17, 2017. This was because of a recommendation from their real estate agent. In between May 17, 2017, and June 6, 2017, they obtained no deals on the Home. On July 28, 2017, the Gamoffs, based on the further advice of their realtor, lowered the price of the Home again to $1,798,000. In between June 6 and July 26, 2017, the Gamoffs got no offers on the Home. On July 31, 2017, they got an offer to purchase the Home for $1,700,000. After some back and forth, on August 9, 2017, the Gamoffs accepted a brand new agreement of purchase and sale. It was with an arm’s length buyer for $1,770,000. That deal closed on October 3, 2017.
Toronto real estate: The Court’s decision
The plaintiffs sought a summary judgment for the difference between the defendants’ offer of $2,250,000 and what the Home eventually sold for, $1,770,000. The defendants opposed this on several grounds, including, that there was an issue that required a full trial.
Based on the evidence, the judge disagreed. He awarded the plaintiffs the difference between the defendants’ offer of $2,250,000 and what the Home eventually sold for. The judge also awarded costs to the plaintiffs. The judgment was for $470,000 plus costs. Add that to the $30,000 down payment the defendants lost, this aborted deal cost them half a million bucks! Toronto real estate: Our own case studies
My Firm has been involved in several matters helping people who have had judgments like the one described above made against them from failed real estate deals. We have been involved as a result of failed real estate deal judgments in:
a bankruptcy caused by the plaintiffs (the vendors) who could not yet collect on their judgment filing a Bankruptcy Application with the Court and obtaining a Bankruptcy Order be made against the defendants;
a consumer proposal for a defendant which was successfully completed;
the successful proposal of the defendant who had a large amount awarded against him by the judgment; and
an assignment in bankruptcy filed by the defendant who did not have the ability to attempt a proposal to get relief from the judgment against them.
In each case, the only way that the defendants could get relief, voluntarily or involuntarily, was through an insolvency process. In the one case caused by the Bankruptcy Order, it was the plaintiff who took action. The plaintiff was able to get a payment for all the unsecured creditors. The insolvency process requires that the distribution is shared among all creditors. That result was better than the plaintiff not being able to collect on its judgment without the insolvency process.
In that specific case, it was a combination of the Trustee’s powers and the plaintiff’s judgment and specific knowledge, that joined to produce the recovery for all creditors. The Trustee’s powers were required to get enough leverage resulting in the recovery.
Toronto real estate: A tough lesson to learn
The effect of this Court’s decision will definitely have a significant result on the defendants. The judge said that he had every compassion for them.
With the adjustments in the realty market in the Greater Toronto Area, I have every reason to believe that there will be extra instances where buyers discover that they have not protected themselves and will not be able to complete their real estate transaction.
Buyers would certainly be well advised to think about making their deals to acquire real estate subject to satisfactory funding, as well as for the sale of their existing residence if they have one. The cost of entering a bidding war and getting the property unconditionally could turn out to be a very expensive one just like in this case.
Toronto real estate: What to do if you have too much debt
If you have too much debt because of a judgment against you, either because you have made the real estate in Toronto news from a failed real estate deal or for any other reason, there is no shame in looking for a professional to help you out of your financial jam. A licensed insolvency trustee (formerly called a trustee in bankruptcy) will look at your circumstances and assist you to get to the very best option for your issues. The Ira Smith Team will give you a free consultation. Ira Smith Trustee & Receiver Inc. is right here to help. We’re government supervised and adhere to a rigorous code of ethics. Our experienced team provides a high-quality service which will create a unique and an affordable solution made just for you. I feel your pain and know how to end it.
Don’t wait until we read about you in the real estate in Toronto news Canada. Call us today to end your stress and experience our pleasant, non-judgmental technique to solve your financial problems and get you back on the right track to stress-free living, Starting Over, Starting Now.
Thesubprime lending industry is alive and well in Canada; that is the subject of this Toronto condo market report. In fact, subprime lenders hold almost 8% of Canadian mortgages, which is a hefty 37.8% increase compared to the same quarter last year. And, this is the sixth consecutive quarter we saw thesubprime lending industry grow. It’s now at its highest level in 10 years. Although many pundits blame the spike in prime lending to the newmortgage stress tests, it’s clear that this trend began years beforestress testing was introduced.
Toronto condo market report: What are subprime loans and how do you get one?
Any loans that are for borrowers that do not have a good credit score
They’re done throughprivate lenders, typically accessed through a mortgage broker
Private lenders are not federally regulated like the banking industry
Private lenders charge steep prices
Toronto condo market report: Why do people take subprime loans?
You may be asking why anyone would take asubprime loan and pay considerably more money than they would at a bank.
Transunion estimates that 11.9% of the 28.4 million Canadian consumers withcredit profiles are subprime which means that they wouldn’t qualify for a mortgage from the bank
A borrower with excellent credit might resort to a subprime loan because the bank won’t lend them as much money as they need
Even a person with bad credit or no credit, there is a private lender willing to give a subprime loan
Toronto condo market report: How is subprime lending affecting Toronto’s condo market?
For some reason known only to the government, they don’t track subprime lending. CIBC Economics show that over:
1 in 10 Toronto condos registered in 2017 was attached to astronomically high mortgage rates
17.4% of owner-occupied condos registered in 2017 had a mortgage rate above 9%
16.2% of condo investors with units that registered last year were paying more than 9%
Toronto condo market report: What’s going to happen if the market starts to soften?
The problem with paying astronomically high-interest rates is what’s going to happen if the market starts to soften? How will these condo owners with subprime loans get their money out, let alone make a profit?
The mortgage stress tests are in place for a very good reason. To ensure that Canadians don’t buy houses or condos that they can’t afford. Trying to avoid the system by going to private lenders and paying high-interest rates can put you in afinancial danger zone.
Toronto condo market report: Are you in a financial bind?
If you’re in a financial bind because you’re living in a property that you can’t afford, or for any reason, you needprofessional help now. With a cumulative 50+ years of experience, theIra Smith Team has helped people just like you who are facing a financial crisis. Give us acall today. We can help you overcome your financial difficultiesStarting Over, Starting Now.
On the west side of University Avenue and immediately north of Queen Street, lies 330 University Avenue, in Toronto’s core. This University Ave. building is known as the Canada Life Building. Work on the building began in 1929 for the brand-new head office of the Canada Life Assurance Company and it opened up in 1931. It was the 4th structure to act as the head office of Canada Life. Most noteworthy is that this company was Canada’s earliest, as well as the biggest insurance provider.
330 University Avenue: Brief building history
The development of this fifteen-floor Beaux Arts structure was by Sproatt & Rolph. It stands at 285 feet (87 m), 321 feet (97.8 m) including its famous weather beacon. This building was the very first of scheduled buildings along University Avenue, however, the Great Depression stopped those plans. When it finished, it was among the highest structures in Toronto. It stays one of the biggest office complexes in Toronto with windows that tenants can open. In 1997, Toronto City Council designated the building a heritage property.
330 University Avenue: The most noticeable part of the building The weather beacon was added in 1951. Its colour codes sum up the weather report at a look. Environment Canada out of Toronto Pearson International Airport revises the weather details 4 times each day.
The top light indicates: Consistent green = clear Stable red = overcast Blinking red = rainfall Blinking = snow
The white lights along the tower show:
Lights rising = warmer Lights running down = colder Solid = consistent temperature level/ No adjustment
During the day, the weather tower shows the weather for that day. The evening signals show the weather for the next day.
330 University Avenue: 330 university avenue 8th floor
But enough of the history lesson. Maybe you didn’t come to this vlog to learn about the building’s history; I will now change the focus. On the 8th floor are the courtrooms. These Courts are presided over by Judges of the Superior Court of Justice Toronto Region. All corporate insolvency matters, certainly not just corporate bankruptcy matters, are part of what is known as the Commercial List.
Personal bankruptcy in Toronto Ontario is normally first heard in a different Court up the street at 393 University Avenue before a Registrar in Bankruptcy. The Registrar is a Master of the Court hearing bankruptcy matters. Most importantly, a Commerical List Judge in 330 University Avenue, Toronto Ontario M5G 1R8 must hear any appeal of a Registrar’s decision. This is for the reason that is what the rules state.
330 University Avenue: The corporate insolvency matters overview
The Court at 330 University deals mainly with corporate insolvency matters. Examples are:
Corporate receivership – appointment of a receiver, motions by the receiver or a stakeholder requesting approval for specific relief, approval motions for sale of assets or fee and costs of the receivership administration, and above all, the receiver’s discharge application.
Corporate restructuring – all motions for bankruptcy protection and restructuring of a company under the Companies’ Creditors Arrangement Act (CCAA), motions by the Court-appointed monitor or a stakeholder requesting approvals, approval motions for the Restructuring Plan of Arrangement including voting rights of all stakeholders, approval of the implementation of the Plan of Arrangement, approval of the fee and costs of the CCAA administration, monitor’s discharge application.
Personal and Corporatebankruptcy matters – as indicated above, these would mostly be either an appeal from Registrar in Bankruptcy’s decision or an opposed matter that the Registrar was not allowed to hear under the bankruptcy rules.
330 University Avenue: Do I need a lawyer to appear at 330 University Avenue?
Corporations are not a human being, so they cannot show up in Court and speak. Therefore, a company requires a person to act on its behalf. Although a shareholder or officer and director authorized to speak on behalf of the company can represent the company in Court, it is not advisable.
I say this because the legal matters heard are most complex. As a result, an experienced insolvency lawyer is necessary to properly represent the position of either the company or a stakeholder.
The licensed insolvency trustee (formerly known as trustee in bankruptcy) who is acting as the receiver, monitor or trustee, similarly will have a competent insolvency or bankruptcy lawyer acting on its behalf. Motion filings always include very detailed reports.
Complex text, financial calculations and detailed exhibits will form part of the filed material. Most laypeople would need both an independent licensed insolvency trustee as a financial advisor, as well as an experienced corporate insolvency lawyer on their team. Therefore, the costs can mount quickly.
330 University Avenue: Is your company going to be in Court either for a restructuring or as a stakeholder?
Is your company dealing with severe economic problems and you aren’t sure what to do? There’s no embarrassment in looking for specialist, financial advice. As a licensed insolvency trustee, the Ira Smith Team can check your company’s circumstances and assist you to get to the most effective solution to solve your company’s financial issues. Several of our successful case studies can be found on our website.
Ira Smith Trustee & Receiver Inc. is here to assist. The government licenses and supervises us. Hence, to keep our license in good standing, we must adhere to a stringent code of ethics. We are well-known to the Judges at 330 University Avenue and all the Toronto insolvency lawyers.
I know the pain and discomfort you are in because of your corporate financial problems. You will certainly discover that we use a pleasant, non-judgmental technique in understanding you, your goals and in restructuring your company.
Baby Boomers characteristics: Introduction
ToToronto real estate: Introduction
