Ira Smith Trustee & Receiver Inc.

Gambling and Consumer Proposals Ontario: 6 Differences With Bankruptcy

Post author By Brandon Smith
Post date January 27, 2016

Gambling and Consumer Proposals Ontario: Introduction

Gambling and Consumer Proposals Ontario are treated very differently than in a Bankruptcy in Ontario. One of the most common questions that people in difficult financial situations ask is: what’s the difference between a consumer proposal and bankruptcy?

Personal bankruptcies and consumer proposals are two of the most common solutions available for personal financial issues. While both are designed to help people resolve debt issues and give users the necessary protection from creditors, learning what’s the difference between a consumer proposal and bankruptcy can help people make more informed decisions in the future.

Gambling and Consumer Proposals Ontario: Consumer Proposal debt limitation

With a consumer proposal, it is only possible for you to claim it if your total debt does not exceed $250,000, excluding the debt owing on the mortgage(s) on your home. Additionally, you must be able to repay a part of those debts to apply.

Gambling and Consumer Proposals Ontario: Creditor acceptance

However, your creditors must accept your proposal, as you do not automatically earn it upon signing up for the option. With bankruptcy, however, any person who owes their creditors more than $1,000 in debt is eligible to file without the need for creditor approval.

The ideal candidates for this situation are those who need some type of immediate financial relief and whose income and budget do not allow them to pay off the reduced amount agreed to in a consumer proposal, on a monthly basis, up to a maximum of 60 months.

Gambling and Consumer Proposals Ontario: Fixed consumer proposal monthly payment vs. potential variable surplus income bankruptcy payment

In order to resolve the financial issues, you and your creditors need to agree to a proposed amount with a consumer proposal, hence the name of the program. This is a monthly amount that you need to pay consistently, but it stays the same for as long as the proposal is in effect. With bankruptcy, however, monthly payments may vary based on the amount of money that you make. The more that you regularly earn, the more you need to pay per month.

Gambling and Consumer Proposals Ontario: Surrendering of your assets in a bankruptcy

With a consumer proposal, you do not need to surrender your assets. With bankruptcy, however, with only certain minor exceptions, you will have to surrender your assets to your licensed insolvency trustee. The Trustee sells them and will use the money to pay for the cost of administration. The Trustee might also pay a dividend to your unsecured creditors.

Gambling and Consumer Proposals Ontario: Credit rating

With a consumer proposal, your credit rating will receive an R7. This indicates you have undergone such an agreement. It will remain for up to 3 years after paying off your loans. With bankruptcy, you earn an R9 rating. That is the worst that you can have. It can stay on your report for a period of 7 years.

Gambling and Consumer Proposals Ontario: Debts from an addiction

The Bankruptcy and Insolvency Act and the Superintendent of Bankruptcy, are very concerned about debts that have arisen as a result of addiction. The Licensed Insolvency Trustee must ask questions to decide if any debts have arisen as a result of addiction.

Once so determined, in a bankruptcy, the licensed insolvency trustee must oppose the bankrupt’s discharge. In order to hope to get an absolute discharge from the Court, the bankrupt will have to go into a rehabilitation program. They will need to prove they have completed a recognized program and continue to seek help. The person will also need to show they are no longer spending money on such addiction.

These are all good things for the total rehabilitation of the individual. It differs from the treatment under a consumer proposal. The licensed insolvency trustee will still want to make sure that the individual is seeking help for their addiction. If you complete your consumer proposal payments there will never be a bankruptcy. Your consumer proposal is successfully completed. You also avoid the onerous issues of discharge from bankruptcy. The treatment of gambling and consumer proposals Ontario as compared to bankruptcy is huge for the individual.

Gambling and Consumer Proposals Ontario

Gambling and Consumer Proposals Ontario: Are you suffering from too much debt?

If you are an individual or company who needs to free themselves from the stress and strain of too much debt, and especially if you have been told your situation is hopeless because of an addiction, Ira Smith Trustee & Receiver Inc. can prepare and carry out the plan made just for you, to free you from the burden of your financial challenges to go on to live a productive, stress-free, financially sound life.

If you’re experiencing serious debt issues for any reason, contact a professional trustee for a free, no-obligation consultation. The Ira Smith Team does not try to write new insolvency laws or tax laws. Rather, we will evaluate your situation within the existing statutes, and help you to arrive at the best possible solution for your problems, whether that solution is a bankruptcy alternative like credit counselling, debt consolidation or a consumer proposal or bankruptcy. Starting Over, Starting Now you can be debt-free with the help of a professional, licensed insolvency trustee. Contact us today.

gambling and consumer proposals Ontario

Brandon Blog Post

CONSUMER CREDIT PROPOSAL: HOW OUR CASHLESS SOCIETY CAN LEAVE YOU PENNILESS

Post author By Brandon Smith
Post date January 25, 2016

Going cashless may drive you to a consumer credit proposal

The good news is that Canadian consumers have more credit, debit and app options than ever before. The bad news is that going cashless makes it easier to overspend and as a result, before you know it, you could be in serious financial trouble.

A recent online survey by processing payments firm Moneris found that:

77% of respondents preferred to pay for purchases by debit or credit card
65% said they rarely buy anything with cash
There is a 162% increase in tap transactions for the third quarter of 2015 compared to the same period in 2014

Easy credit may drive you to a consumer credit proposal

The reality is that we really don’t need to carry cash anymore. Almost everything can be transacted by credit or an app tied into your credit card now. It does seem like we’re moving towards the end of cash; not today, but eventually. Mobile apps like Apple Pay are the future. PayPal, allowing you to charge purchases to your credit card has been available for years.

The problem with all of these modes of payment is that the control of paying with cash is gone. In days gone by the amount of cash on hand dictated how much you could spend. Sure, some stores offered layaway plans but by and large if you had no cash, you couldn’t make a purchase. Even with the lay-away plans, until you paid for the item in full, you didn’t get to bring it home.

According to Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada, “Without the physical attribute of taking cash out of your wallet and paying for something, we’re missing one of the senses that allow us that brake on some of the decisions that we make. This disconnect is a concern because with the average Canadian over $20,000 in debt on the unsecured side, it’s a challenge. So we’re already having trouble paying what we owe. Do we really need to make it easier to part with our money?”

Take action now with a consumer credit proposal

If you’re having serious financial problems due to cashless spending, or for any other reason, the Ira Smith Team is here to help. With just one phone call you can be well on your way to living a debt free life Starting Over, Starting Now. Contact us today.

Tags Apple Pay, cashless society, consumer credit proposal, Credit, credit card, debit, financial trouble, mobile apps

Brandon Blog Post

CONSUMER PROPOSAL PROCESS FOR LOTTERY WINNERS? BUT WHY?

Post author By Brandon Smith
Post date January 18, 2016

image 1

Consumer proposal process for a lottery winner? Why?

Here’s a headline I’m sure you all remember – Three winners of the $1.586 billion Powerball jackpot. Here’s a headline you may have missed – The odds are that the US$1.5 billion Powerball winner will end up bankrupt (and if a Canadian, possibly a consumer proposal process).

Tags bankrupt, Bankruptcy, bankruptcy alternative, Consumer Proposal, consumer proposal process, financial plan, financial trouble, insolvency, Ira Smith Trustee, living paycheque to paycheque, lottery, powerball, professional trustee, trustee

Brandon Blog Post

BANKRUPTCY ALTERNATIVE: THE CLINTON PORTIS LIST FOR TURNING $40 MILLION INTO A BANKRUPTCY

Post author By Brandon Smith
Post date January 11, 2016

Picture courtesy of clintonportis26.com

Tags bankrupt, bankruptcies, Bankruptcy, bankruptcy alternative, bankruptcy alternatives, Clinton Portis, consumer proposals, credit counselling, debt consolidation, declaring bankruptcy, financial trouble, insolvency, living paycheque to paycheque

Brandon Blog Post

HOW BINGE BORROWING RAISES CANADA’S HOUSEHOLD DEBT BURDEN

Post author By Brandon Smith
Post date January 4, 2016

Binge borrowing raises Canada’s household debt burden

We worry about binge eating and binge drinking, but it appears that we are not paying enough attention to Canada’s latest problem – binge borrowing. Incredibly low interest rates and sky high house prices have contributed to this trend. The Bank of Canada, the federal government and many economists have long been concerned that consumers who have been binge borrowing are now exposed to risk in the event of an economic shock or significant downturn.

Just when we thought Canada’s household debt burden couldn’t go higher!

Just when we thought that Canada’s household debt burden was at its peak, in the third quarter of 2015 Canada’s household debt burden hit another record high. This means that Canadian’s debts grew faster than their incomes. According to Statistics Canada:
• The ratio of household credit-market debt to disposable income rose to 163.7% in the three months ended September 30, up from 162.7% in the second quarter (this means the average household had nearly $1.64 in debt for every dollar of disposable income)
• This was the highest ever reading in this key ratio for gauging consumer debt loads
• Debt rose 1.4% in the quarter, while disposable income increased by 0.8%
• Total credit-market debt reached $1.89-trillion in the third quarter, also a record
• Mortgage debt was $1.23-trillion
• Consumer credit – credit cards, car loans, personal lines of credit and other personal loans – totalled $572-billion

What will your debt do in 2016?

Unfortunately Canadians ended 2015 with more debt than they started off with and this is a trend that expected to continue into 2016. Are you ready to stop binge borrowing and get control of your finances before you are facing a financial crisis? Professional help is just a phone call away. Contact Ira Smith Trustee & Receiver Inc. As a firm of professional trustees we’re experts on dealing with debt. Our approach for every file is to create an outcome where Starting Over, Starting Now becomes a reality, beginning the moment you walk in the door. Call us today and take the first step towards living a debt free life.

Tags binge borrowing, borrowing binges, Canada's household debt burden, Canadian household debt, car loans, consumer credit, consumer debt, credit-market debt, Debt, disposable income, household debt, household debt burden, Ira Smith, Ira Smith Trustee, mortgage debt, personal lines of credit

Brandon Blog Post

#VIDEO: DOES SURPLUS INCOME IN BANKRUPTCY SOMETIMES MAKE YOU FEEL STUPID?#

Post author By Brandon Smith
Post date December 30, 2015

If you don’t know what surplus income in bankruptcy is don’t feel that you aren’t as smart as the next person because most people don’t know what it means or how it is even possible. We hope this short video will explain things easier for you.

We have previously written about surplus income in bankruptcy in our blogs:

On the list of items that generally seems to be difficult for many individuals to understand is how there can be surplus income in bankruptcy. The reason for the confusion is because it has nothing to do with the normal usage of the word “surplus”, being “more than what is needed or used; excess”.

What is surplus income in bankruptcy?

Within a personal bankruptcy, the context is a measure of what a bankrupt has to pay to the Trustee month-to-month. It is one of the aims of the Canadian bankruptcy system to balance the discharge of one’s personal debt with the expectation of the creditors that they should be paid.

To allow Canadians to keep a basic standard of living during the personal bankruptcy procedure, the government features collection thresholds on income (after income tax as well as certain deductions) meant to enable the bankrupt to keep a basic standard of living while contributing an amount to the Trustee for the benefit of his or her creditors.

Exactly how is the surplus income in bankruptcy payment determined?

The surplus income payment is determined according to a prescribed surplus income calculation mandated by the federal government, without any distinction for the area somebody lives in. To learn exactly what your surplus income in bankruptcy obligation would be, if any, you need to speak to a Trustee.

Surplus income in bankruptcy thresholds are structured based on national “poverty line” stats and the thresholds are set regardless of what part of the country or city that you live in. Surplus income in bankruptcy has nothing to do with what you have left over in funds every month. It is a federal solution which takes your monthly after-tax wages or salary, allows for a specific number of non-discretionary expenses, and takes into account your family size. Your Trustee then inputs this information into the government mandated formula, to calculate your surplus income in bankruptcy obligation.

If you have too much debt, contact us

If you are an individual or company who needs to free themselves from the stress and strain of too much debt, and especially if you have been told your situation is hopeless, Ira Smith Trustee & Receiver Inc. can prepare and carry out the plan made just for you, to free you from the burden of your financial challenges to go on to live a productive, stress-free, financially sound life.

If you’re experiencing serious debt issues with the CRA, or for any reason, contact a professional trustee for a free, no obligation consultation. The Ira Smith Team does not try to write new insolvency law or tax law. Rather, we will evaluate your situation within the existing statutes, and help you to arrive at the best possible solution for your problems, whether that solution is a bankruptcy alternative like credit counselling, debt consolidation or a consumer proposal. Starting Over, Starting Now you can be debt free with the help of a professional, licensed trustee in bankruptcy. Contact us today.

surplus income in bankruptcy, ira smith trustee, starting over starting now, debt, consumer proposal, bankruptcy, credit counselling, debt consolidation, bankruptcy alternative, surplus income payment, surplus income calculation

Tags Bankruptcy, bankruptcy alternative, Consumer Proposal, credit counselling, Debt, debt consolidation, insolvency, Ira Smith, Ira Smith Trustee, personal bankruptcy, professional trustee, starting over starting now, surplus income calculation, surplus income in bankruptcy, surplus income payment

Brandon Blog Post

CORPORATE BANKRUPTCY SERVICES: WHO WILL GET ON THE 2016 LIST?

Post author By Brandon Smith
Post date December 28, 2015

Which industries may require corporate bankruptcy services in 2016?

Canada and Canadians are facing serious economic challenges, and certain industries have been much harder hit than others. Oil and gas, automotive and construction have taken the biggest hit and there are no clear signs of recovery any time soon. They may very well require corporate bankruptcy services (sometimes misspelled corporate bancruptcy services) in 2016. And, according to Statistics Canada, accommodation and food services, transportation and warehousing, and information and cultural industries experienced the biggest increase in insolvencies.

Our list of the top candidates for corporate bankruptcy services in 2016

The oil and gas industry: According to Bloomberg business, the oil price crash is taking a heavy toll on Canada and the worst is yet to come. As a result, Calgary is taking the brunt of it with crime on the rise, house prices falling rapidly and food banks being overwhelmed. “We all know someone who has lost a job,” Naheed Nenshi, the city’s mayor, said in a speech this month, lamenting the “funeral”-like atmosphere in the business community. The bloodletting isn’t over yet. Already 40,000 oil and natural gas positions have been lost in the last 18 months and many more job cuts are predicted in 2016.
The automotive industry: The auto industry is on very shaky ground. Mexico and Tennessee have replaced Michigan and Ontario as the North American auto industry’s manufacturing hubs. Canada’s auto trade has gone from a surplus of $15-billion in 1999 to a deficit of $18-billion in 2013; half of which came from trade with Mexico. Production commitments made by General Motors Co. (GM), including those made within the corporate bankruptcy services that created “Old GM” and “New GM”, and Chrysler Group LLC as part of their $13.7-billion bailouts, are set to expire at the end of 2016, leaving them free to close plants and lay off workers if they see fit. According to Charlotte Yates, dean of social sciences at McMaster University and head of the new Canadian Automotive Policy Partnership, if Canada is determined to keep trying to compete in today’s globalized auto industry, it can’t do it without subsidies.
The construction industry: The construction industry is a corporate bankruptcy services leader. Industry Canada’s July bankruptcy statistics have ranked the construction industry as one of the leaders in bankruptcies and experts attributed the statistics to a risky business with poor management and cash-flow monitoring.

Canadians and their debt

Canadian consumers are the most indebted in the world according to Tom Bradley of Steadyhand funds, “Lines of credit, home-equity loans, car leases, credit cards, high-ratio mortgages—they’re well-versed in them all. The level of consumer debt will make it difficult to attain the growth and employment levels of previous cycles; past purchases were borrowed from the future. Extensive use of leverage will also make Canadian families and the overall economy vulnerable in the next economic slowdown”.

If you’re like many Canadians and Canadian corporations experiencing serious financial problems, now is the time to deal with them. The Ira Smith Team will tackle your financial issues head on and with immediate action and a solid plan you can be on your way to a debt free life Starting Over, Starting Now. Contact us today.

Tags 2016, automotive industry, bancruptcy, Bankruptcy, bankruptcy leader, Canadian industries, car leases, construction industry, corporate bancruptcy services, Corporate Bankruptcy, corporate bankruptcy services, Debt, home-equity loans, Ira Smith, Ira Smith Trustee, Lines of Credit, mortgages, oil and gas industry, starting over starting now

Brandon Blog Post

#VIDEO: AVERAGE STUDENT LOAN DEBT: REASONS WHY WE PITY YOU#

Post author By Brandon Smith
Post date December 23, 2015

The rise of average student loan debt

<<average -student-loan-debt

Average student loan debt is getting out of control. Post-secondary education is effectively a need for today’s labour market. According to the Canadian Federation of Students in its paper titled: “The Impact of Student Debt”, unfortunately, since the demand for education has inflated, public funding did not keep up. Public funding shortfalls have resulted in the increased cost of post-secondary education being borne by students.

The growth in average tuition fees

From 1990 to 2014, the national average tuition fees have seen an inflation adjusted increase of over one hundred and fifty per cent (150%). In Ontario, tuition fees have grown over one hundred and eighty percent (180%). For most students—often having spent very little time active within the workforce, other than for part-time work—funding their education has become more and more troublesome.

Students now taking on higher levels of average student loan debt

Many students are now taking on increased levels of debt for their education. Students requiring a Canada Student Loan currently graduate with an average student loan debt of over $28,000. Keep in mind that this is an average, with the costs of graduate education resulting in higher debt levels. Relying on debt to finance education suggests that there is a delay in the full impact of high tuition fees till after graduation—when interest begins to be charged.

Societal issues caused by rising average student loan debt statistics

This impact is now exacerbated by the effects of the most recent recession and the rising trend of precarious, and even unpaid, employment. The broader effects of high levels of student debt on both the person and the general economy are now resulting in various issues:

Young Canadians (15-24) accounted for over half of job losses over the last 5 years;
Un and under-employment can cost the Canadian economy over $22 billion by 2031;
In 2014, youth un and under-employment was twenty-seven per cent (27%);
Thirty per cent (30%) of medical students expect to graduate with over $100,000 in student debt;
Under-employment and work outside one’s field of study results in talent degradation, falling behind in ability, and lost networking opportunities;
Canada has seen a fifteen per cent (15%) growth in Canadians under the age of 30 who still live in their parent’s home since 1981;
Those with student debt have a fewer assets, savings or investments compared to debt-free peers.

Average student loan debt causes affect the Canadian economy

Starting out with huge debt and facing a weak labour market, this prevents graduates to fully take part within the Canadian economy. Student debt impacts career selections, even among professional school graduates in medicine and law. An estimate of unpaid internships is in the range of 300,000 graduates working with no pay.

Do you have too much debt? Then contact us now

Student loan debt has its own set of unique rules and complexities within the Canadian insolvency scheme. If you’re experiencing serious debt issues, contact a professional trustee for a free, no obligation consultation. The Ira Smith Team does not try to write new insolvency law or tax law. Rather, we will evaluate your situation within the existing statutes, and help you to arrive at the best possible solution for your problems, whether that solution is a bankruptcy alternative like credit counselling, debt consolidation or a consumer proposal or bankruptcy. Starting Over, Starting Now you can be debt free with the help of a professional, licensed trustee in bankruptcy. Contact us today.

Brandon Blog Post

ARE HOUSE PRICES CANADA’S NEW SUCCESSFUL BIRTH CONTROL?

Post author By Brandon Smith
Post date December 21, 2015

house prices, debt, millennials, baby boomer, housing market, Ira smith trustee

Sky high house prices are the delight of one generation and the doom of another. Baby boomers’ happiness directly correlates with the increase in house prices. They can cash out and live the retirement they dreamed of while the younger generations are handcuffed from creating the family life that they dreamed of.

The high cost of buying into the housing market is causing many couples to delay having a family. A new survey from RateSupermarket reports that:
> 56% of respondents said their ability to start or expand their family has been impacted by house prices in their region
> 72% of millennials said their ability to start or expand their family has been impacted by house prices in their region
> 52.8% of respondents said they couldn’t expand their family in their current home
> 49.4% said the costs involved have caused thesm to change their minds about the size of their family

The house prices in Toronto and Vancouver are not for the faint of heart, with the average single-family home in both cities currently above $1 million. It’s virtually impossible for a young couple to buy into the housing market today so with few options, condos are becoming more attractive to young couples and young families.

The study from the Canadian Centre for Policy Alternatives (CCPA) senior economist David Macdonald estimates that:
A 20% decline in house prices across Canada would put 169,000 families under age 40 “underwater” on their mortgages. That’s one in 10 families in that age group. If prices fell 30% – in line with the maximum by which the Bank of Canada says Canadian house prices are overvalued – there would be 294,000 underwater families under 40, or one in seven

It doesn’t seem right that young couples feel that they can’t start a family because they can’t afford to buy a house. Or even worse, they chase their dreams, buy a house that they really can’t afford and land up deep in debt. If you’re struggling financially, seek professional help as soon as possible. The Ira Smith Team approaches every file with the attitude that financial problems can be solved given immediate action and the right plan. Contact us today so that Starting Over, Starting Now you can put your financial problems behind you and plan your future.

Tags baby boomer, Debt, house prices, housing market, Ira Smith Trustee, millenials

Brandon Blog Post

MEDICAL DEBTS? DON’T BE FOOLED BY UNIVERSAL HEALTHCARE

Post author By Brandon Smith
Post date December 14, 2015

Medical debts? Don’t we have free healthcare?

As Canadians we pride ourselves on our universal healthcare system, which we view as free healthcare. We therefore assume that medical debts cannot arise. However, when I read that Pamela Bowes, manager of the Money Matters and workplace programs at Wellspring in Toronto recently said, “I have had more people tell me they worry more about money than they worry about cancer”, I was quite frankly shocked. Clearly Canadians don’t understand that even though we have universal healthcare, we can get into serious financial problems due to medical debt.

Medical debts without enough private insurance coverage

Here’s the reality of healthcare debt in Canada. According to a 2014 BMO Wealth Institute Report:

Without private coverage, Canadians can expect to spend an average of $5,391 a year on out-of-pocket medical dental costs after 65
Disability poses a large threat: Between ages 65 to 74, 26.3% will be become disabled
If the disability is mild, there may be a need for changes to a home, such as electric wheelchairs ($2,050 and up) and other devices such as scooters ($1,000-$5,000) and walkers ($150 and up)
If a person is severely disabled, he/she may need a personal care worker at a cost of $16 to $30 an hour or a registered nurse at a cost of $24 to $76 an hour

Medical debts for long-term care

Long-term care is another area where Canadians are totally unprepared. Stephen Frank, vice-president of policy development and health at Canadian Life and Health Insurance Association reports that 75% of Canadians have no long-term financial plan for long-term care if they need it. Long-term care isn’t covered under the Canada Health Act. Home care may be covered, partly covered or not covered at all depending on the province you reside in and our annual income. According to Statistics Canada there is about a:

10% chance of needing long-term care by age 55
30% chance by 65
50% chance by 75

A nursing home in Ontario can cost between $14,000 and $132,000 annually, while long-term care averages $20,800 to $29,300 (Senioropolis). Add to this the cost of certain medical treatment and the medical bills could pile up. Provincial plans cover most prescription drugs for seniors 65 years of age and older, but younger retirees have to pay for their medications unless they have an extended healthcare plan. And, then there are certain drugs that are not covered under the provincial plans, regardless of your age. This may leave a Canadian with thousands of dollars of medication debt.

Do you have too much debt? Contact us

If you’re struggling with a mountain of unexpected medical debts and need medical debt help, or any serious debt issues, help is just a phone call away. Starting Over, Starting Now we can help you deal with what seems like insurmountable debt and breathe easy again. Contact the Ira Smith Team today.

Tags Debt, disability, free healthcare, healthcare debt, Ira Smith, Ira Smith Trustee, long-term care, medical bills, medical debt, medical debt assistance, medical debts, medical dental, prescription drugs, starting over starting now, universal healthcare

Gambling and Consumer Proposals Ontario: Consumer Proposal debt limitation

Gambling and Consumer Proposals Ontario: Creditor acceptance

Gambling and Consumer Proposals Ontario: Fixed consumer proposal monthly payment vs. potential variable surplus income bankruptcy payment

Gambling and Consumer Proposals Ontario: Surrendering of your assets in a bankruptcy

Gambling and Consumer Proposals Ontario: Credit rating

Gambling and Consumer Proposals Ontario: Debts from an addiction