Ira Smith Trustee & Receiver Inc.

MAXED OUT CREDIT? YOU NEED TO KNOW HOW TO INCREASE CREDIT SCORE: OUR 13 INTRIGUING TIPS TO IMPROVE YOUR CREDIT SCORE

Post author By Brandon Smith
Post date May 1, 2023

how to increase credit score

Our mission includes helping you know how to increase credit score with our free online course

The objective of this Brandon’s Blog is to furnish readers with comprehensive insights on improving their credit rating, alongside introducing them to our complimentary no-cost e-learning module, “How to Increase Credit Score: How To Improve Your Canadian Credit Score”. This user-friendly course provides a definitive guide on increasing your credit score, thereby paving the way for better financial prospects. The brief video above describes the course and how you can access it.

This Brandon’s Blog provides highlights common problems faced by those with low credit scores, including being declined for credit or having to pay high-interest rates. I also provide valuable tips on how to increase credit score. The focus is primarily on the significance of maintaining a good credit score in order to get approval for reasonably priced loans, mortgages, or credit cards.

Explanation of maxed-out credit: Know how to increase credit score

Maxed-out credit happens when an individual has reached their credit limit and is unable to borrow any more and make further purchases. It results in high-interest rates, missed payments, and damaged credit scores. However, there are effective ways to increase your credit score and eliminate debt. This Brandon’s Blog, combined with our free e-learning course, delivers easy-to-understand strategies and expert counsel to equip consumers with everything they need to know to improve their credit scores to unlock better financial prospects.

Through the knowledge I am sharing, individuals can successfully navigate the complex world of credit ratings and experience marked improvements in their daily lives. By embracing sound fiscal practices, one can effectively manage their money, avoid bankruptcies or consumer proposals, and ultimately earn a more favourable financial life. So take control of your financial situation today and with our help, begin your journey towards a more stable and prosperous financial future with our “How to Increase Credit Score: How To Improve Your Canadian Credit Score”.

how to increase credit score

Importance of improving credit score: Know how to increase credit score

In today’s world, a good credit score functions as the cornerstone for getting financial freedom. For people that have grappled with debt, insolvency, bankruptcy or consumer proposals, improving their credit rating may look like an overwhelming obstacle. Yet, with the specific devices and insights we are supplying to you, any person will be able to take control of their very own financial life heading in the direction of a brighter tomorrow.

This is exactly why we have created “How to Increase Credit Score: How To Improve Your Canadian Credit Score“. Our recommendations and our tried-and-tested techniques will move you toward a better credit score, eventually unlocking excellent loan and mortgage opportunities from Canadian lenders, and enabling you to accomplish your financial goals. Take control of your future and bid farewell to higher interest rates and declined credit applications by going through our “How to Increase Credit Score: How To Improve Your Canadian Credit Score” today.

Description of what a credit score is, how it is determined and then how to increase credit score

A person’s credit worthiness is represented by a numerical score known as the credit score. This score is derived from various financial information such as payment history, credit utilization rates, length of credit history, types of credit used, and new credit inquiries.

Credit scores range from 300 to 900, where a higher score is indicative of better credit history and financial stability. The credit report, maintained by Canada’s two credit reporting agencies, Equifax Canada and TransUnion Canada (Equifax/TransUnion), is the source of credit ratings and it is what the Canadian banks will look at.

how to increase credit score

Importance of knowing your credit score and how to increase credit score

Maintaining a good credit score is a key factor in today’s financial landscape, irrespective of whether you are a student, a young professional, a business owner or are retired. Knowing your credit score is important so that you can stay informed on what others think of your creditworthiness and financial standing. Sometimes adverse information may find its way into your credit report as an error. By knowing what your credit report says, you will be able to prove any errors that should be eliminated which produces a lower credit score than what you are entitled to. It is important to have any errors fixed to avoid any negative impact on any assessment of your creditworthiness.

A low credit score can lead to being denied for credit, higher interest rates, and unfavourable loan terms from Canadian lenders. It is essential to maintain a high credit score as it paves the way for obtaining the best possible deals on loans and credit card products from financial institutions at the most favourable rates. Therefore, it is crucial to keep a tab on the various financial factors that contribute to your credit score to ensure a sound financial standing.

That is why we developed our complimentary no-cost e-learning module, “How to Increase Credit Score: How To Improve Your Canadian Credit Score”. To teach you how to improve your credit score.

Knowing how to obtain your free credit report is the 1st step in how to increase credit score

Maintaining vigilance over your credit report is a prudent method for verifying the precision of your credit history and score, both of which serve as significant benchmarks of your monetary stability. Fortunately, procuring a complimentary credit report has become effortless. It is your lawful right to receive an annual free credit report from each of the two Canadian credit bureaus.

Submit a formal request for your credit report via their digital portal or through the Canadian postal service. When you get it, meticulously examine it to identify any inconsistencies or inaccuracies that may be impeding your creditworthiness.

If you find yourself struggling with debt, don’t despair. Our complimentary e-learning module, “How to Increase Credit Score: How To Improve Your Canadian Credit Score” can provide you with valuable insights and practical strategies to enhance your credit score and overcome financial setbacks. You can trust us to help you take control of your financial future today.

how to increase credit score

Common credit score issues that create lower credit scores: How to increase credit score

A low credit score can present significant obstacles, particularly when making significant purchases on credit or seeking loans. Although there are many parts contributing to an individual’s credit score, certain concerns are regularly associated with reduced scores.

A number of widespread credit score difficulties can bring about lower scores, such as:

Late payments: Not making your payments on time will have a major negative impact on your credit score, whether we are talking about credit cards, loans or lines of credit. Late payments reflect badly on your credit report and can significantly affect your overall score. Paying your debts on time, and not just your minimum payment, has a positive impact on your credit rating.
High credit utilization: A higher credit utilization rate will adversely impact your credit score. Financial institutions prioritize borrowers who exhibit responsible credit management practices; hence, maintaining a low credit utilization ratio (usually below 30%) is fundamental.
Errors on your credit bureau report: As already stated, inaccuracies on a credit report, ranging from erroneous personal details to accounts that are not legitimately attributable, can harm your credit rating. To safeguard against such potential pitfalls, it is imperative to maintain an annual review of your credit report and promptly challenge, with evidence, any inaccuracies that may be encountered.
Defaulting on a loan: Be it a mortgage or an automobile loan, defaulting will lead to a deterioration in your creditworthiness. Therefore, you have to make sure when you are approved for a loan that you can afford the monthly payments and meet all other repayment terms. This is of prime importance.
Applying for too much credit: Requesting too much credit can have negative effects on your credit rating. Potential lenders, and especially credit card companies, may interpret this as a sign of your nervousness over your financial hardship and a greater chance of you eventually defaulting on the loan. As such, you should exercise moderation when applying for credit. Moderation and realism is the key to maintaining a healthy credit profile.
Accounts in collection: Having accounts in collection leads to a decrease in your credit score. This is because you have now shown that you cannot handle credit responsibly. It is imperative that you promptly settle any outstanding amounts and work with the creditor or its appointed collection agency to eliminate that account from your credit report. If you don’t, there will be a negative impact on your creditworthiness.
“Hard credit check” versus “soft credit checks”: See the next section for this discussion.

By steering clear of these typical credit score complications, you can keep a good credit score and heighten the probability of obtaining credit approval in the foreseeable future.

“Hard hits” versus “soft hits”: Know how to increase credit score

The first issue is having too many hard inquiries on your credit report. These hard inquiries occur when lenders pull your credit report and do a credit score check as the first step in determining if you’re going to be approved for a loan or other credit product you applied for.

What are hard inquiries on your credit report?

When seeking new credit such as a loan, credit card or mortgage, hard inquiries are initiated on your credit report. A hard inquiry is a request for a copy of your credit report and it remains on your credit report for two years. However, it only affects your credit score for one year.

What are soft inquiries on your credit report?

A soft inquiry is an informational check of your credit that does not impact your credit score. Soft inquiries appear when you or an authorized user view your own credit report, or when a business checks your credit for pre-approved offers or account reviews.

Soft inquiries are also known as “soft pulls” because they do not impact your score, unlike hard inquiries which do.

how to increase credit score

13 tips on how to address these issues and how to increase credit score in Canada

We understand that managing finances can be challenging, especially when you are maxed out on your credit and can’t repay the debt. You may be feeling overwhelmed and unsure of what to do next, but don’t worry, we are here to help.

Developing sound credit practices is the cornerstone of financial literacy. Learning and regularly practicing such practices is crucial as it will improve your financial outlook. By timely payment of bills, responsible use of credit cards, and staying on top of what is in your credit report, you can improve your credit score and secure a path to financial triumph.

This, in turn, can enable you to establish a robust credit history, thereby qualifying you for lower interest rates on all credit products. Sticking with the sound tips indicated below, it will grant you access to more advantageous lending options that may not be easily available to the masses.

Developing sound credit practices means unfailing commitment, meticulous planning, and unwavering attention to detail. However, you will reap the benefits because these tips and activities will help you achieve your long-term financial goals and establish a solid foundation for your and your family’s financial future.

Here are our 13 tips on how to address these issues and how to increase credit score in Canada:

Assessing your debt situation
You have to start by truthfully analyzing your whole financial status to successfully manage your financial debt. This involves meticulously gathering all the information from charge card statements, and loan agreements, and identifying all other outstanding debts to calculate the total amount owed, the individual interest rates you are being charged by product, and all your monthly payments. Only by doing so, can you after that begin to create a realistic plan to pay off your financial debts in a timely and efficient way.
Creating a budget plan
Now that you have collected all of your debt information, it’s time to develop a household budget that includes all incomes as well as expenses. Ensure you include all of your fixed expenditures like rent or mortgage payments, utilities and vehicle loan payments. Then you need to list all of your variable costs like food and entertainment.
Once you have a clear idea of your expenditures, compute your income on a monthly basis and subtract your expenses from it. This will show you where you need to cut down on expenses and/or take on a side gig to raise your income.
Keep in mind that you cannot be spending more than you earn in any month. Ideally, you want to spend less each month than your monthly income, so that you can then have money to dedicate to paying down your debts and building up an emergency savings fund.
Incidentally, do not neglect to include the income tax you need to pay on your income, broken down into a regular monthly cost. Include that amount as a monthly expense also.
Contacting your creditors
It’s crucial to reach out to your creditors promptly if you’re having trouble keeping up with your debt payments. You might find that they’re receptive to collaborating with you on a customized repayment scheme that meets your financial capabilities. By disregarding your debts, you’ll only exacerbate the problem, which could lead to late charges, sanctions, and a negative impact on your credit report.
Please keep in mind that unless you have first done the two steps listed above, you will not have a good understanding of what kind of accommodation you need to ask each creditor for. If you go in well-prepared knowing all of your numbers, you will significantly increase your chances of success in these negotiations.
Explore debt consolidation
If you’re dealing with numerous debts, you could want to take into consideration debt loan consolidation. It’s a viable option where you can secure a single loan at a lower rate of interest than the weighted average interest rate from every one of your debts that you’re currently paying.
You then use the funds from this new loan to fully pay off or otherwise settle all your other debts. As a result, you will then only have one debt to concentrate on, with a reduced month-to-month repayment. This will certainly assist you handle your debts successfully and reduce the amount of interest you’re paying. This also saves you cash that you can then put toward building up your emergency fund and savings.
Reduce credit utilization
Decreasing credit utilization is an essential part of increasing your credit score. Firstly, take stock of your existing credit usage, and attempt to pay off the balances on the highest-interest accounts first. Think about settling your debts with a debt consolidation loan or a zero-percent balance transfer credit card. You can enjoy a healthy financial future by reducing your credit card balances and limiting how many times you apply for credit within a year. Enhance your credit score by lowering your credit utilization ratio.
Pay your bills on time
Always paying your bills on time is key to maintaining your credit rating in good shape. A constant history of timely repayments will help you build a higher credit score and which improves the look of your credit report. It is critical to keep your bills paid on time to show a positive payment history and not have a damaging influence on your credit history.
Use Your Credit Responsibly
Avoid maxing out your charge cards and try to keep your credit utilization rate low as previously stated. It will help you keep a great credit rating or improve your existing one by showing lenders that you are a responsible borrower.
Monitor Your Credit Report
Maintaining an accurate credit report and safeguarding against identity theft are critical financial practices. You are legally entitled to get from the Canadian credit reporting bureaus a complimentary copy of your credit report annually.
Thoroughly review it so that you can detect any fraudulent activities or errors that could result in severe damage to your credit rating. Hopefully, there are not, but you must remain alert and well-informed about your credit standing to ensure your financial well-being.
Limit New Credit Applications
It is important for you to remember that each credit application you make reduces your credit score. Therefore, you must be cautious and limit the number of credit applications you make. You should only try to get new credit when it is absolutely needed. This advice also goes for applying for a credit limit increase of an existing credit product.
Developing a Strong Credit Profile
Having no or very little credit history can pose a huge problem when you make a credit application. Your credit file does not have enough information in it to show that you can handle credit responsibly. It is recommended to begin developing a positive credit history early on in your adult life. You should consider alternatives such as getting a secured credit card account or a 1-year term personal loan that requires you to make regular monthly payments. If you make your payments on time, you will begin establishing an excellent credit track record which brings about a good credit score.
A word of caution. As you are just starting out, make sure that you only set reasonable loan or credit card limits so that you can afford the monthly payments to repay what you owe on the credit accounts during the period of time allowed by the lender.
Explore professional credit counselling
Individuals grappling with financial challenges may find it advantageous to seek the expertise of a seasoned credit counsellor. This prudent move can afford them a series of invaluable benefits, all of which serve to bolster their financial literacy and improve their overall monetary management. Prominent advantages of credit counselling include, but are not limited to:
- Enhanced Debt Management: Credit counselling can help individuals struggling with debt to manage their finances better. The counsellors can offer valuable advice on debt repayment strategies, budgeting, and managing the debt load effectively.
- Financial literacy: The acquisition of financial knowledge is essential for individuals to navigate the complexities of financial management with success. To this end, credit counsellors offer an imperative service by imparting essential financial education that equips individuals with the necessary skills to cultivate sound financial habits, make informed financial decisions, and preemptively avoid potential financial obstacles.
- Improved credit score: Credit counselling services can provide individuals with the valuable expertise necessary to improve their credit scores. People who go through credit counselling obtain the tools necessary to practice the habit of responsible financial management which over time improves their credit scores.
- Emotional Support: The credit counsellor can help people through the rough patches of anxiety and worry about their financial situation until they start feeling better about themselves and their improving financial situation.
Speak to a licensed insolvency trustee
There are benefits to having a no-cost consultation with a Canadian licensed insolvency trustee if you are facing financial difficulty. Here are a few:
- - Expert advice
  - Protection from creditors
  - Debt relief
  - Guidance through the process
  - Financial education
Overall, speaking with a Canadian licensed insolvency trustee can help you take control of your finances and achieve a fresh start.
Watch the video at the top of this Brandon’s Blog

You will find out how to access our no-cost e-learning module, “How to Increase Credit Score: How To Improve Your Canadian Credit Score”.

Conclusion: How to increase credit score

Managing your debts can be challenging, but with the right plan in place, it’s possible to get back on track. Remember to assess your debt situation, create a budget plan, contact your creditors, explore debt consolidation, and consider bankruptcy only as a last resort option. With these steps, you can take control of your finances and work towards a debt-free future. Having a maxed-out credit can be stressful and overwhelming. However, it is also an opportunity to take control of your finances and work towards improving your credit score.

With our complimentary no-cost e-learning module, “How to Increase Credit Score: How To Improve Your Canadian Credit Score”, you can learn practical strategies and expert advice on how to boost your credit score and secure better financial opportunities. By following our simple steps, you can finally put an end to being denied credit or paying high-interest rates. With dedication and perseverance, you can unlock financial freedom and achieve your goals. So, don’t wait any longer; start your journey towards a healthier credit score today and join countless individuals who have already benefited from our guide.

I hope you enjoyed this how to increase credit score Brandon’s Blog.

Revenue and cash flow shortages are critical issues facing people, entrepreneurs and their companies and businesses. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind. Coming out of the pandemic, we are also now worried about the economic effects of inflation and a potential recession.

The Ira Smith Team understands these concerns. More significantly, we know the requirements of the business owner or the individual that has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

It is not your fault you can’t fix this problem on your own. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy proceedings. We can get you debt relief now.

We have helped many entrepreneurs and their insolvent companies who thought that consulting with a trustee and receiver meant their company would go bankrupt. On the contrary. We helped turn their companies around through financial restructuring.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

The Ira Smith Trustee & Receiver Inc. team understands that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.

CLICK THE PICTURE BELOW TO GET OUR COMPLIMENTARY NO-COST E-LEARNING MODULE, “HOW TO INCREASE CREDIT SCORE: HOW TO IMPROVE YOUR CANADIAN CREDIT SCORE”

Brandon Blog Post

BIA: 2 PEOPLE’S CHALLENGE SUING A CANADIAN LICENSED INSOLVENCY TRUSTEE

Post author By Brandon Smith
Post date April 24, 2023

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Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) (BIA): Introduction

On April 13, 2023, the Supreme Court of Canada (SCC) dismissed the application by the legal counsel of a former bankrupt and his wife for leave to appeal the costs awarded against them in a decision of the Court of Appeal for Ontario. As is the usual case, the SCC did not give any reasons for the dismissal. The Court of Appeal for Ontario’s decision dealt with what is required under section 215 of the Bankruptcy and Insolvency Act (Canada) (BIA) to sue a licensed insolvency trustee.

In this Brandon’s Blog, I provide a comprehensive guide to the Court of Appeal for Ontario decision and everything you need to know about section 215 of the BIA. Using this real court decision as an example, we’ll explore the ins and outs of Section 215 of the BIA to give you a clear understanding of its purpose, how it applies, and the potential consequences of non-compliance.

Overview of BIA Section 215

Section 215 of the BIA requires that permission of the court be obtained to bring an action against the Office of the Superintendent of Bankruptcy Canada, an official receiver, an interim receiver or a licensed insolvency trustee with respect to any report made under, or any action taken, under the BIA.

The purpose of this section is to ensure that the court must first decide if a proposed action has on its surface a legitimate purpose relating to the administration of insolvency matters in Canada and to avoid frivolous actions that have no chance of success.

Regular readers of Brandon’s Blog know that I have been following and writing about the case of the former bankrupt, Mr. Wayne Flight and his wife, Amber Nicole Flight. In my November 2021 blog titled: TRUSTEE IN BANKRUPTCY: CERTAIN ACTIONS AGAINST TRUSTEE CAN BE UNLEASHED WITHOUT FIRST REQUIRING COURT PERMISSION, I detailed a decision of the Ontario court where the motion judge decided that notwithstanding section 215 of the BIA, the Flights did not need to first obtain authorization from the Court in order to initiate their legal proceeding.

Then in July 2022, I wrote that the licensed insolvency trustee (formerly called a bankruptcy trustee) had appealed this lower court decision and gave an overview of the appeal and other related issues in my blog titled: INSOLVENCY TRUSTEE: TURNS OUT CERTAIN ACTIONS AGAINST THE TRUSTEE CANNOT BE UNLEASHED WITHOUT COURT PERMISSION.

As stated above, this Brandon’s Blog will provide a comprehensive guide to the Court of Appeal for Ontario decision and everything you need to know about section 215 of the BIA.

BIA: The Motion Judge’s Decision

The motion judge decided that the Flights did not require the permission of the court, under s. 215 of the BIA, to bring an action against the Trustee, relating to the administration of four bankruptcies of Brian Wayne Flight! The same corporate trustee was the Trustee in each of his bankruptcy proceedings. The lower court judge rendered a decision that negates the applicability of the clause in dispute, deeming the action to be levied against the individual Trustee in a personal capacity, and further alleging omissions as a mitigating factor. She did not assess whether section 215 of the BIA did apply and if it did, should permission to proceed with the action be granted.

Upon due consideration of the arguments presented, the Court of Appeal for Ontario has granted the Trustee in Bankruptcy leave to appeal and has subsequently set aside the order of the motion judge. In rendering its decision, the appellate court has determined that pursuant to section 215 of the BIA, permission to bring the civil action must be obtained and has thus directed the matter back to the bankruptcy court to assess whether such permission should be granted.

It is noteworthy that, despite the Flights’ appeal of this ruling to the SCC, said appeal has been dismissed. Consequently, the matter will now be remanded to the bankruptcy court for further deliberations.

The BIA case background

Mr. Flight filed for bankruptcy on four separate occasions – specifically in the years 2004, 2006, 2011, and 2016. The same corporate trustee was the Trustee in respect of each of these bankruptcies. The same individual licensed insolvency trustee was the individual at the corporate trustee with carriage of Mr. Flight’s bankruptcies.

The total of the proven claims in the first three bankruptcies was $324,800. The total amount distributed to creditors of those bankruptcies was about $3,200. Proven claims in the fourth bankruptcy were $127,870.

In the year 2018, amidst his fourth bankruptcy, Mr. Flight uncovered the fact that substantial amounts had been unlawfully appropriated from his business operations between 2003 and 2018. The perpetrator of this offence was none other than Julie LeBlanc, his former spouse, his bookkeeper, and authorized agent. Ultimately, Mr. Flight determined that the amount of the misappropriations was approximately $206,000.

Mr. Flight successfully retrieved a sum of approximately $30,300 from Ms. LeBlanc, however, it was not submitted to the Trustee. Subsequently, in April 2018, Mr. Flight lodged a complaint with the Office of the Superintendent of Bankruptcy regarding the Trustee’s inability to identify Ms. LeBlanc’s actions. Following the formal complaint, the Trustee was made aware of Ms. LeBlanc’s illicit activities and the funds secured by Mr. Flight.

Disputes then arose between the Trustee and Mr.Flight concerning whether and on what terms he would be discharged from bankruptcy and how the payments from Ms. LeBlanc should be treated. In August 2019, Mr. Flight was granted a conditional discharge on terms that, if complied with, allowed him to receive an absolute discharge after twelve months. The Trustee and Mr. Flight did not agree as to whether those conditions were met.

In September 2019, Mr. Flight and his current spouse, Amber Nicole Flight, commenced an action against the individual licensed trustee, seeking relief (the “Action”). The Action does not name, or refer to, the corporate trustee, but it treats the individual trustee as though he were the Trustee. The central allegation in the Action is that the individual trustee, as the“Licensed Insolvency Trustee” for each of the bankruptcies, ought to have detected Ms. LeBlanc’s misappropriations and, once told about them, ought to have taken steps including suing Ms. LeBlanc.

As Mr. Flight states in his affidavit:

“At the heart of this action is the Trustee’s failure to detect, prevent, and once he became aware of it, to litigate, the theft and fraud committed by my former Accountant, Bookkeeper, and Power of Attorney, JulieLeBlanc”.

Did the undischarged bankrupt have the right to launch the Action under the BIA?

Both the individual trustee and the corporate trustee objected to the Action on the basis that at the time of its commencement, (i) Mr. Flight was an undischarged bankrupt person, and (ii) no permission was obtained under s. 215 of the BIA to bring the Action.

Mr. Flight brought a motion, in his bankruptcy proceeding, seeking directions with respect to whether he had the right to commence the Action as an undischarged bankrupt and, if required, seeking leave to do so under section 215 of the BIA.

In September 2020, and before the motion for directions was heard, Mr. Flight launched but did not proceed with, a motion for an absolute discharge. In October 2020, working with a different insolvency professional, he filed a consumer proposal under the BIA. It was accepted by Mr. Flight’s sole significant creditor in February 2021. The acceptance of the consumer proposal resulted in his bankruptcy being deemed annulled.

Following acceptance of the consumer proposal the motion judge heard the motion for directions with respect to the Action.

The Court of Appeal for Ontario’s analysis

The motion judge, sitting in the bankruptcy court, determined that permission was not required under section 215 of the BIA to commence the Action. She expressly did not determine whether, if permission were required, should it be granted. She did not address whether Mr. Flight’s status as an undischarged bankrupt at the time the Action was started prevented him from bringing it.

The motion judge described the Action as one seeking “a declaration that the defendant engaged in misfeasance, negligence, fraud and breach of fiduciary duty in his personal capacity and that the defendant was unjustly enriched.” She described the claims in the Action as alleging a theft (by Ms. LeBlanc) that caused Mr. Flight’s repeated bankruptcies, and as alleging that the individual trustee was liable since the“defendant trustee ought to have detected this fraud in the administration of the four bankruptcies”.

The motion judge described the Action as claiming damages flowing from the individual trustee’s alleged failure to: “take any meaningful action to address the alleged fraud and its impact on the fourth bankruptcy after its discovery”; “diligently commence an action against the former bookkeeper”; “investigate the fraud”; “adjust the plaintiff’s surplus income”; “recommend a consumer proposal in alternative to bankruptcy”; and “have the plaintiff promptly discharged from his fourth bankruptcy”.

The motion judge gave two reasons for finding that the Action did not require permission under section 215 of the BIA. According to her perspective, seeking recourse against trustees in their individual capacity does not necessitate prior authorization. Furthermore, it is noteworthy that the pursuit of legal recourse pertaining to omissions does not necessitate getting prior authorization.

The Court of Appeal for Ontario’s decision

The Court of Appeal for Ontario found that the motion judge erred in concluding that the capacity in which the Trustee was sued made section 215 of the BIA inapplicable. An action does not fall outside of section 215 of the BIA because it names an individual rather than the corporate trustee as the defendant, where the action alleges that the individual owed the duties of a Trustee and is liable as if he were the Trustee. Nor does an action fall outside of section 215 of the BIA because the claim asserts that it is brought against the Trustee in a personal capacity, where the gist of the claim is wrongdoing in the performance of the Trustee’s role.

The appellate court stated that the motion judge also erred in holding that an action that makes any allegation of an omission falls outside of section 215 of the BIA. Although section 215 does not apply to an action premised on the failure of a Trustee to do an act specifically and expressly mandated by the BIA, that is not the core allegation in the Flight’s claim. Section 215 applies to the Action, which alleges common law wrongdoing in the performance of the Trustee’s role, even if an aspect of that wrongdoing is described as an omission to act.

The Court of Appeal for Ontario granted the Trustee’s leave to appeal, allowed the appeal, and returned the matter to the bankruptcy court to determine whether the Flights should be granted permission to sue the individual trustee. The individual and corporate trustees were entitled to the costs of the appeal, fixed in the amount of $13,000, inclusive of disbursements and applicable taxes. Now that the SCC appeal is dismissed, the lower court will have to decide the real issues as determined by the Court of Appeal for Ontario

BIA: Conclusion

I hope you enjoyed this section 215 BIA Brandon’s Blog.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

Tags bankrupt person, Bankruptcy and Insolvency Act, bankruptcy proceedings, BIA, bia section 215, civil action, Consumer Proposal, corporate trustee, current spouse, interim receiver, Ira Smith Trustee, legal counsel, licensed trustee, official receiver, trustee in bankruptcy, trustee in respect, trustee with respect, undischarged bankrupt

Brandon Blog Post

FEDERAL BUDGET 2023 AND PREDATORY INTEREST RATES: WHAT EVERY ENLIGHTENED CONSUMER MUST KNOW

Post author By Brandon Smith
Post date April 17, 2023

Interest rates: Introduction

From the 2023 Federal Budget, the Canadian federal government has garnered significant attention for its proposed measures regarding interest rates on predatory loans. This initiative has been lauded by activists as a commendable effort towards safeguarding consumer interests, promoting financial inclusivity, and antipoverty measures.

The budget aims to oversee the financial sector and extend protection to vulnerable Canadian consumers who may face challenges in accessing conventional bank loans. The budget is focused on facilitating economic policies that foster financial empowerment, encourage community development, and support grassroots initiatives.

In the wake of the ongoing COVID-19 pandemic, the Liberal government has made a noteworthy declaration regarding lowering criminal interest rates. Presently, the rates stand at an exorbitant maximum interest rate of 60%, leading to severe hardships for many individuals in repaying their loans. Therefore, the government has proposed a reduction of the maximum interest rate to an approximate annual interest rate, or as is formally described as the annual percentage rate (APR) of 35%, down from its existing equivalent of 47% APR. This move is anticipated to provide crucial respite to Canadians grappling with the financial repercussions of the pandemic and is reflective of the government’s proactive stance toward ensuring the welfare of its citizens.

In this Brandon’s Blog, I discuss this pivotal development in the Canadian financial landscape. As the government continues to prioritize the welfare of its citizens, this budget holds the potential to usher in positive changes in our society concerning predatory loans. I examine key terminologies such as federal budget, interest rates, and consumer protection alongside other pertinent phrases like anti-poverty measures, advocacy, and grassroots movements.

Hopefully, this Brandon’s Blog will also provide you with some insight into financial regulation, economic policy, and social justice and lead to a discussion of the impact of this budget on Canadians and their overall financial well-being.

Interest rates: Background information on predatory loans

Predatory lending is a financial practice that exploits vulnerable individuals, often resulting in excessive interest rates, undisclosed charges, and onerous repayment terms. These loans can be particularly damaging to borrowers as predatory loans make it next to impossible for vulnerable consumers to meet their obligations, leading to a cycle of debt.

Exorbitant interest rates that surpass the threshold of 60% annually have been classified as criminal interest rates under the Canadian Criminal Code. The culprits of this offence often include payday lenders, loan sharks, and other predatory lenders who exploit financially vulnerable Canadians. Typically, these lenders prey on those who belong to low-income households, those with a very poor credit score, new immigrants, and seniors who possess insufficient knowledge of the country’s financial system.

However, the Canadian Federal Government is proactively addressing this issue in its 2023 budget. The budget includes provisions to cap the interest rates charged by predatory lenders and support programs offering debt relief and financial empowerment.

This initiative demonstrates a commitment to promoting social justice and anti-poverty measures through economic policy. The efforts of activists and advocacy groups have been instrumental in advancing these measures.

Explanation of the Federal Government’s decision to cut interest rates on predatory loans

The Federal Government has decided to reduce interest rates on predatory loans, which typically offer short-term lending options at exorbitant rates of interest. These loans are often marketed to individuals who are facing financial instability, leading to a cycle of debt that can be challenging to break.

The Criminal Code limits the legal interest rate to a 60% annual rate. Any annual percentage rate above that is a criminal rate of interest. That criminal rate level has been in place since 1980 when the Bank of Canada’s overnight rate was 21%! Currently, some provinces permit the exemption for payday lenders resulting in exorbitant interest rates for payday loan options of up to $1,500 for a period of 62 days or less.

For the purpose of context, it deserves noting that the ceiling for the criminal interest rate has actually regularly exceeded the rates of interest levied by banks on their typical financing and mortgage products. Additionally, the maximum rate has gone beyond even the highest interest-bearing financing product supplied by financial institutions, credit cards, which commonly bring reasonably steep interest rates of approximately 19 to 20 percent.

The Government is proposing to lower the criminal interest rate to 35%, which is the rate established in Quebec. Provincial consumer protection laws mandate that any interest rate above this level would be deemed unlawful.

Interest rates: Common characteristics of predatory loans

Predatory financial products have long been identified by their high-interest rates, obscured junk fees, and unconscionable repayment terms, leading to a cycle of debt from which borrowers struggle to extricate themselves. As such, the budget’s emphasis on consumer protection, financial regulation, and social justice reflects a governmental commitment to the advancement of financial inclusion, debt relief, and anti-poverty measures.

These lending instruments often associated with payday lenders are designed to target low-income Canadians who are either vulnerable or have limited access to traditional financing channels. With exorbitant rates and fees, such loans often ensnare borrowers in a debt trap that is difficult to escape. The proliferation of predatory loans has inflicted serious damage on borrowers, and so it is imperative to thwart such practices through the implementation of effective regulatory measures.

The Federal Government’s decision to cut interest rates on predatory loans

The Canadian Federal Government’s implementation of reduced interest rates on predatory loans, as unveiled in the Federal Budget document, has garnered acclaim from social justice activists and financial empowerment proponents. This progressive step towards limiting interest rates on predatory loans has been a long-sought-after triumph for advocates who have tirelessly campaigned for this alteration over the years. The government’s decision to restrict interest rates on such loans to 35% will serve to shield borrowers from the detrimental cycle of debt arising from predatory lending practices, a particularly pressing concern given the surge in such practices during the COVID-19 pandemic, which has rendered countless individuals financially distressed.

Predatory lending practices have the potential to cause irrevocable harm to borrowers, with those already grappling to make ends meet being especially vulnerable. By imposing inflated interest rates and fees, predatory lenders are able to ensnare borrowers in an endless cycle of debt, thereby exacerbating the financial difficulties they face. Such actions not only impact the individuals involved but have wider-reaching implications.

Interest rates: Criticism of the government plan

Despite receiving praise from consumer and social justice advocates, the choice to reduce the interest rate on predatory loans in the 2023 Federal Budget has met some opposition. Critics have expressed the problem that this step can cause a greater rate of bankruptcies. They say that if this class of lenders is no longer willing to offer loans to these risky customers, they will leave the marketplace as a result of interest rates being capped. In that event, credit accessibility will no longer be available to those vulnerable people in Canada.

In addition, some critics state that the government should focus on establishing programs fostering financial inclusion, debt relief, and financial empowerment rather than enforcing rate of interest caps. They believe that caps on interest rates may not appropriately address the origin of poverty as well as exclusion.

Nonetheless, advocates of this regulatory measure see it as a necessary step towards shielding vulnerable Canadians, especially lower-income Canadians.

Benefits of cutting interest rates on predatory loans

The federal government’s budget proposal to lower the criminal rate of interest is expected to have a substantial influence on Canadians that are battling to repay their loans. Reduced interest rates will make it less complicated for Canadians to do so while hopefully being able to avoid falling further into debt. It is intended to decrease the financial strain on low-income households, seniors, and new immigrants that are especially vulnerable to aggressive financing methods.

Furthermore, the federal government’s budget proposal to introduce new steps to shield Canadians from predatory lending practices is a welcome development. Lenders will be subject to stricter oversight, which will hopefully help prevent them from capitalizing on susceptible Canadians. Stricter fines for lending institutions that breach the law will also act as a deterrent and help make certain that Canadians are dealt with in fairness and respect.

This particular federal budget 2023 proposal has garnered praise from consumer advocates due to its emphasis on consumer protection, financial inclusion, and social justice. Particularly noteworthy is the government’s decision to limit the interest rates that predatory lending institutions can charge. This will particularly impact payday loan products. This measure is deemed critical in protecting vulnerable Canadians.

Interest rates: Criticisms of the decision

Notwithstanding the praise this proposal has thus far received, the decision to lower the criminal rate of interest on predatory lending has actually not been without its detractors. Doubters have actually expressed that such a measure may result in some problems. Critics of this proposal say that there may be an increase in defaults on debt, as predatory loan providers may choose to decline certain loan applications from high-risk customers, thereby cutting off their access to credit. Without such access, they will be unable to repay other debt that is about to go into default.

Critics of this plan have suggested that the government should prioritize other legislative measures and initiatives that actually promote monetary inclusion, debt relief, and financial empowerment instead of focusing on caps on interest rates. They say that lowering the criminal interest rate does nothing to deal with the underlying sources of problems experienced by such bad credit and lower-incomed Canadians.

Benefits of cutting interest rates on predatory loans

Predator loans are normally considered underhanded and damaging to borrowers, as they generally involve high-interest rates, hidden costs, and other terms that make it difficult for borrowers to repay the loans.

Reducing interest rates on loans can also make it less complicated for people to re-finance their existing loans, which can lower their monthly payments and free up more cash for various other expenses. This can be specifically advantageous for people that are struggling to make ends meet, as it can supply some much-needed financial relief.

The major advantages seem to be:

reduced financial burden on borrowers
potential reduction in default rates
increased economic stability

In general, we will certainly have to wait and see if there is a benefit to Canadians that have no choice but to obtain predatory loans. Will they benefit from this proposal or simply be pressed to the darker corners to get their loans wheretheir financial and personal health will be in danger?

Interest rates: Conclusion

We will have to see if this reduction in the criminal rate of interest ever becomes law and if it fact will help those financially vulnerable Canadians who must seek out predatory loans, such as payday loans.

I hope you enjoyed the interest rates on Brandon’s Blog. Revenue and cash flow shortages are critical issues facing people, entrepreneurs and their companies and businesses. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind. Coming out of the pandemic, we are also now worried about the economic effects of inflation and a potential recession.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

Brandon Blog Post

IMPORTANT LEGAL DECISION: HOW PRIORITY IS ASSIGNED BETWEEN CONSTRUCTION ACT LIEN AND LICENSED INSOLVENCY TRUSTEE FEE

Post author By Brandon Smith
Post date April 10, 2023

construction act

Construction Act, R.S.O. 1990, c. C.30: Introduction

In May 2020, I wrote Brandon’s Blog CONSTRUCTION LIEN ACT: CAN YOU TRUST AN INSOLVENCY PROCEEDING?

In October 2021, I wrote CONSTRUCTION LIEN ACT OF ONTARIO: THE GRIPPING FIGHT BETWEEN LIEN FILING, A PRIOR MORTGAGE & RECEIVER FEES. In that blog, I wrote about what a construction lien is and a decision of the Court of Appeal for Ontario in a receivership context.

Now there is a decision released by the Alberta Court of King’s Bench of Alberta on February 15, 2023, regarding Golfside Ventures Ltd (Re), 2023 ABKB 86 (CanLII). This decision relies on the Court’s inherent jurisdiction rather than following a specific rule set out in the Bankruptcy and Insolvency Act (Canada) (BIA). Based on the specific facts of this case, this decision sets the priority between a construction lien and the fee and disbursements of a licensed insolvency trustee (formerly called a bankruptcy trustee).

I have compiled a comprehensive guide to help you understand the case’s implications. Our guide provides information on the Ontario Construction Act, R.S.O. 1990, c. C.30 (Construction Act) the background of the case, the decision, and what it means for stakeholders in the construction industry if this decision is not overturned on appeal (should an appeal be launched) and if this line of thinking was adopted in Ontario.

Our understanding hopefully provides clarity for contractors, builders, lawyers, lenders and other construction industry players. Following the Alberta Court’s decision, it is necessary to understand how a Construction Act lien will rank against other claims and especially the licensed insolvency trustee fees. Our guide will help readers learn:

the importance of a construction lien
the background of the case;
what the Court’s decision was;
the implications of the case; and
how to protect their interests under similar circumstances.

We caution that we are not lawyers and especially not construction lawyers. Anyone involved in the construction industry needs to seek the advice of their legal counsel.

Our specialty is that of a licensed insolvency trustee. We will be jumping between the requirements of the Construction Act in Ontario and the Alberta Court decision. Since bankruptcy matters are federal law, while the Construction Act is provincial law, I feel that the comparison is apt.

What is the Ontario Construction Act?

The Construction Act is a piece of legislation in the province of Ontario. The act regulates the construction industry in Ontario and outlines the rules and requirements for construction contracts, requests for payment, the prompt payment regime and payment dispute resolution.

The Construction Act is divided into various parts, each dealing with different aspects of construction. Part II outlines the trust provisions and the interim dispute resolution provisions. Part III deals with the construction lien, which allows contractors and subcontractors to secure payment for work they have done. Part IV outlines the holdback provisions Part V of the act deals with the expiry, preservation and perfection of construction liens.

The current Construction Act came into being in September 2021. Before then Ontario had the Construction Lien Act. Overall, the Construction Act is an important piece of legislation for the construction industry in Ontario, providing a framework for fair and equitable treatment of all construction contracts, payment, and dispute resolution. As a business owner or contractor in the construction industry, it is essential to understand your rights and obligations under the Construction Act.

One very complicated area of this provincial law is the ranking of a Construction Act Lien against licensed insolvency trustee fees in the event of a company’s insolvency and bankruptcy. The recent decision from the Alberta Court sheds light on this topic and provides valuable insights for contractors, business owners and insolvency professionals.

construction act

What is a construction lien under the Construction Act?

A construction lien is a legal claim against a property that is created by a contractor, subcontractor, or supplier who has provided labour or materials for the improvement of that property. The purpose of a construction lien is to secure payment for the work or materials provided by the claimant.

In Ontario, construction liens are governed by the Construction Act, which outlines the process for creating, perfecting, and enforcing liens. A construction lien arises when a contractor, subcontractor, or supplier provides work or materials to improve a property but is not paid for that work or materials. The lien gives the claimant the right to take legal action to enforce the claim for payment.

Please note: While I cannot claim expertise in this particular field, I have served as a Court-appointed receiver for incomplete construction projects as a licensed insolvency trustee. As such, I have gained valuable experience dealing with a variety of construction lien issues within the context of receiverships.

Improvements to the Construction Lien Act of Ontario in making the Construction Act has focused primarily on implementing prompt payment provisions and establishing mechanisms for resolving disputes, such as the adjudication regime. Under provincial construction law, the prompt payment rules refer to the timely payment of an invoice following the issuance of a “proper invoice.”

Specifically, contractors must receive payment for their work within 28 days of their invoice being received by the owner. The owner has 14 days to object to the amount, quality, or invoice of the work outlined in the invoice. Additionally, the time limit for filing/preserving liens has been extended from 45 days to 60 days.

The primary objective of this revised policy is to enhance cash flow management within the construction hierarchy by expediting conflict resolution and avoiding either late payment or non-payment. The newly implemented adjudication provisions are designed to resolve construction disputes proficiently with qualified adjudicators and a code of conduct for their ethical conduct.

In the event of a failure to extend the timeline, the adjudication regime mandates that the decision must be rendered within 46 days of initiation. If a party fails to comply with the adjudicator’s decision, the aggrieved party is entitled to halt or terminate work under the contract.

Under industry standards, holdbacks necessitate that the landowner, the contractor, or the subcontractor withhold a sum of 10% from the overall expense of materials or services rendered. It is permissible to furnish a bond or security deposit in place of the holdback contingent upon the provisions outlined in the contractual agreement.

To perfect a construction lien under the Construction Act, the claimant must follow a specific process. First, the claimant must provide written notice of their intention to lien to the owner of the property, the general contractor, and any other parties with an interest in the property.

After providing notice, the claimant must register the lien with the Ontario Land Registry Office after the last day the claimant provided work or materials. The registration of the lien must include specific information, such as the amount claimed, a description of the property, and the names of the parties involved.

Once the lien is registered, the claimant must take legal action to enforce the lien within a specific timeframe, or the lien will expire. This legal action results in the filing of a lawsuit to enforce the lien or participating in mediation or arbitration to resolve the dispute. There are specific time frames to all these steps under the Construction Act which must be followed.

Overall, construction liens provide important protections for contractors, subcontractors, and suppliers by allowing them to secure payment for their work or materials. However, the process of creating and enforcing a lien is complex. It is important to seek legal advice to ensure that the lien is properly perfected and enforced.

Definition and criteria for awarding licensed insolency trustee fees in a Canadian bankruptcy

In accordance with the BIA, a licensed insolvency trustee (LIT) in Canada is authorized by the federal government to oversee bankruptcies and proposals. It is mandatory for individuals or companies that file for bankruptcy to designate a LIT to manage the process.

The fees of a LIT in small consumer personal bankruptcy files are determined by a tariff established by the Office of the Superintendent of Bankruptcy. This tariff is meant to fairly compensate LITs in these small files.

In all corporate bankruptcy and larger personal bankruptcy administrations, the LIT’s fee depends on the complexity of the case, as well as the value of assets and liabilities involved. The LIT must have its fee and disbursements approved by the Court in these larger files.

It is imperative to acknowledge that a particular hierarchy is established in the BIA that determines the order of priority in which a LIT’s fees are paid from the assets of the bankrupt estate. Prior to any ordinary unsecured creditors, LITs are compensated after trust claimants, secured creditors, and preferred unsecured creditors. Consequently, any remaining funds earmarked for LITs’ remuneration will curtail the amount accessible to cover the claims of ordinary unsecured creditors.

This is where the issues in the Alberta case arise. Before agreeing to accept an insolvency assignment, the LIT needs to understand how they are going to get paid. In a bankruptcy where there are secured creditors, those creditors may suffer a shortfall and therefore there will be no money available for the LIT fees and disbursements, even if they are fully approved.

In such cases, the LIT must first get a sizable cash retainer or the indemnity of a third party who can afford to pay the fees and costs upfront. This must be done by the LIT BEFORE accepting the file. It is most important for the LIT to pay attention to how it is going to get paid for administering bankruptcy. There are certain red flags that must be identified when assessing a potential bankruptcy administration, especially for an unfinished construction project.

construction act

Different types of licensed insolvency trustee fees in a Canadian bankruptcy

LIT fees pertain to the charges levied by a Trustee for the range of services provided in the administration of a bankruptcy estate. These fees are extracted from the estate’s assets and are contingent on the intricacy of the case, the amount of time and effort invested by the Trustee, and the overall value of the assets in question.

According to the BIA, LIT fees are determined based on specific criteria that govern the administration of bankruptcy proceedings. Both the fees and expenses incurred by the Trustee and their legal representative must be approved by the Court. As a result, the LIT must acquire the Court’s authorization for their expenses and charges.

The Court holds the power to decide the amount and fairness of the Trustee’s fees. The Court considers several factors such as the complexity of the case, the amount of time invested by the Trustee, the value of the assets involved, and the quality and level of services rendered by the Trustee. The Court also takes into account the evidence of any party opposing the approval of the LIT’s fees as submitted for approval.

The services rendered by a LIT are subject to regulatory oversight under the BIA, which has established a framework for fees that can be charged by LITs. These fees are bifurcated into two categories:

Administrative Fees: These fees are levied by LITs for the administrative work they perform during the bankruptcy process. They encompass a range of activities such as document preparation and filing, communication with creditors, and asset collection, realization and distribution.
Disbursement Fees: LITs charge disbursement fees for expenses incurred while managing the bankruptcy. These expenses can range from fees for appraisers, Court filing fees, and legal fees, and are typically reimbursed from the debtor’s estate.

Importance of paying attention to bankruptcy trustee fees

Bankruptcy cases entail a diverse range of fees that creditors and relevant parties must meticulously monitor. Trustee fees are a significant aspect of these fees, as they could significantly impact the funds available for creditor payments. Thus, understanding the mechanics of these fees and their implications on your bankruptcy interests is crucial.

This is especially pertinent for those affiliated with the construction industry or those who supply products and services to construction projects. In recent years, there has been some confusion and uncertainty surrounding how Construction Act liens rank against Trustee fees in bankruptcy cases.

Regrettably, in my view, the recent judgment from the Alberta Court of the Golfside Ventures Ltd (Re), 2023 ABKB 86 (CanLII) decision has only served to exacerbate this ambiguity, rendering the matter even more perplexing.

The following is my take on the Golfside Ventures Ltd (Re), 2023 ABKB 86 (CanLII) decision.

construction act

Golfside Ventures Ltd (Re), 2023 ABKB 86 (CanLII): Recent legal decision How priority was assigned between Construction Act lien and Bankruptcy Trustee Fees

Background of the case

In February 2019, Golfside Ventures Ltd. and Hustle Holdings Ltd. joined forces through a Joint Venture Agreement to develop forty-four parcels of barren land in Redwater, Alberta, commonly known as the Lands. However, shortly after the agreement was made, Golfside was declared bankrupt, with the Lands remaining as its sole asset.

Prior to the bankruptcy, the Trustee conducted due diligence and determined, notwithstanding the registrations against the title, that there was sufficient equity in Golfside’s assets to cover the associated fees and expenses. The Trustee also obtained an agreement with a third-party company to postpone and subordinate any of its claims against Golfside.

Despite these measures, one of the mortgagees filed a Builders’ Lien against the Lands after the bankruptcy commenced, claiming approximately $5,500,000 in relation to the joint venture. The Trustee disallowed the lien claim, prompting the creditor to appeal.

The Trustee, in seeking guidance and direction from the Court, filed a motion for the granting of an Order creating a first charge on the assets of Golfside in favour of the Trustee’s fee and disbursements, including legal fees. This request was made to ensure that the Trustee’s reasonable professional fees and disbursements are secured in their payment. The Trustee is relying on the principles of fairness and the inherent jurisdiction of the Court in making this request.

The Respondents asserted that the Trustee should have been aware of the existence of a lien prior to their appointment. They argue that the rights of secured creditors, as outlined in the BIA, should govern this situation, with secured lien claims taking priority over the payment of fees and disbursements to a bankruptcy trustee.

So the issue before the Court was can, and if so, should, the Court exercise its inherent jurisdiction to grant a charge in favour of the Trustee against the Lands and the proceeds from the sale of the Lands to secure the Trustee’s costs?

Court’s ruling and reasoning

Section 39 of the BIA sets out Trustee remuneration. Secured claims rank in priority over a trustee’s fees and expenses. A trustee should arrange to protect itself before incurring fees, expenses, and legal costs to administer the estate.

The lien claimant as a secured creditor would have priority over the Trustee‘s fees and expenses in the case of bankruptcy. The BIA provides the priority scheme for distributing proceeds of a bankrupt’s estate. It is not clear if the Court’s inherent jurisdiction can be applied in this situation. If so, the claim for lien would have precedence over the Trustee’s fees and expenses.

The Trustee would be entitled to a portion of the amount remaining out of the realization of the property of the debtor after the claims of the secured creditors have been paid or satisfied (s 39(2) in this case). The claim for lien would have priority over the Trustees’ fees and expenses.

The Trustee submitted that the Court may exercise its inherent jurisdiction to grant the requested charge. The Respondents take the position that the BIA is very clear and that the Trustee who incurred fees and expenses did so at its own peril. The Trustee’s responsibility is to ensure that only valid claims to the assets under administration are recognized. Determining the validity and priority of claims has a real cost.

In a prior decision, the Court ultimately granted a Trustee a charge over funds in its possession to the extent necessary to permit recovery of 50% of its reasonable fees and disbursements.

The Trustee in this case applied to have priority over the creditor in its capacities as both a mortgagee and as a lien claimant. Because each amount of these two claims exceeded the value of the assets, the Trustee applied for priority over the creditor as mortgagee also.

The Respondent mortgagee and lien claimant stated that the Trustee’s request is plainly contrary to the priority rights afforded secured creditors under the BIA. The court ultimately granted the Trustee the charge over the funds in Its possession, relying upon the inherent jurisdiction of the Court.

Construction Act: Impact of the decision on businesses, contractors and owners

We must remember that this is an Alberta court case, so, unless this decision is overturned on appeal, it only affects insolvency proceedings in Alberta. However, it will be interesting to see if this same approach is ultimately followed in other provinces. There are two parts to the secured claims of the Respondent: (i) a mortgage registered against title prior to the bankruptcy; and (ii) an unregistered security interest at the date of bankruptcy.

The Respondent’s submissions were correct. The BIA is clear. The claims of trust claimants, secured creditors and a very small type of special claims come ahead of the right of the licensed insolvency trustee to obtain its taxed fee and costs from the realization of the assets in a bankruptcy administration.

As stated above, the Court chose to use its inherent jurisdiction to override the relevant provisions of the BIA to grant the charge ahead of all secured claims, registered and unregistered. Albeit the Trustee had disallowed the construction lien claim which was unregistered at the date of bankruptcy and that disallowance was under appeal.

Whether other provincial courts will follow this decision only time will tell. If they do, will it then be common for courts to rule that the fee and expenses of a licensed insolvency trustee in administering a bankruptcy can prime a registered mortgage against lands? What about personal property security?

The recent decision from the Alberta Court concerning the lien claimant vs the Trustee fees is significant for anyone involved in any industry including the construction industry. Businesses, contractors and owners deserve certainty when dealing with insolvent companies. Unfortunately, this decision does not provide any certainty as the Court allowed the Trustee to prime both an unregistered charge, albeit of unknown value and a registered mortgage charge.

It seems to me that this decision should be appealed. I currently do not know if it is being appealed. In my opinion, the Court did more than just use its inherent jurisdiction. It used that authority to essentially rewrite the portion of the BIA that says creditors with valid security are outside the bankruptcy process, should be allowed to enforce their security and the Trustee’s fee and costs comes after the claims of secured creditors. Parliament did not intend this.

Also, by making this decision, the Court made moot the right of the construction lien claimant to appeal the Trustee’s disallowance of its claim to the Court. If there will not be any funds available after the Trustee’s fee and costs and the claimant’s mortgage, then the resulting effect is that the construction lien claim, assuming there is a valid monetary claim, is rendered to the class of ordinary unsecured even without the Trustee’s disallowance.

construction act

Construction Act: Conclusion

I hope you enjoyed this Construction Act Brandon’s Blog. Revenue and cash flow shortages are critical issues facing people, entrepreneurs and their companies and businesses. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind. Coming out of the pandemic, we are also now worried about the economic effects of inflation and a potential recession.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

Brandon Blog Post

5 SURPRISING THINGS YOU CAN DO WITH YOUR CANADIAN TAX REFUND (THAT AREN’T SHOPPING)

Post author By Brandon Smith
Post date April 3, 2023

What is a Canadian tax refund?

In April, Canadians must pay their income tax liability for the prior year and when most Canadians file their income tax returns. Getting a Canadian tax refund can be an amazing experience for numerous Canadians. It’s like obtaining an unexpected reward from the federal government. The idea of having extra money to spend can be thrilling as well as inspiring, and it can offer a sense of relief and security for those that might be battling financially.

Even just the knowledge that you will be getting a tax refund is exciting, as taxpayers excitedly wait for the confirmation of how much money they will be getting back. Everyone uses this time to think about how they are going to spend their refund. Overall, the enjoyment of receiving a tax refund is a favourable experience.

But what is a Canadian tax refund? Following the filing of their annual income tax return to the Canadian government, a taxpayer may receive a sum of money known as a tax refund. This refund represents the variance between the total amount of taxes paid by the taxpayer throughout the year and those they actually owe, based on their income and tax deductions/tax credits. In the event that a taxpayer has paid more taxes than they are required to, they will be issued a refund for the surplus amount.

While many people find it appealing to go on a shopping spree or book a holiday with that extra cash, there are really a lot more surprising and also functional things to use for your Canadian tax refund. In this Brandon’s Blog, I will explore 5 things you may not have thought about that you can do with your reimbursement that will certainly not only profit you financially but also assist you to accomplish your long-term objectives.

From investing in your retirement to repaying some financial debt, these alternatives might not be as interesting or exciting as a brand-new wardrobe or a journey to an exotic location, but they can have a substantial effect on your financial well-being. So, before you hit the shopping centre or book your next trip, take a minute to take into consideration these alternate suprising ways to use your tax refund. You may be amazed at just how much more satisfying it is to put that money towards something that will benefit you financially in the future. Let’s jump in!

5 surprising things you can do with your Canadian tax refund

It’s that time of year yet again – tax time. While it can be a difficult time for many, there’s always the possibility of a silver lining: the opportunity for a tax refund. According to the Canadian federal government, the average Canadian tax refund was $2,086 in 2022. There are at least 5 surprising things you can do with your Canadian tax refund that isn’t shopping.

So if you’re questioning what to do with your Canadian tax refund this year, keep reading – you could be surprised by the choices available to you. Here are the 5 ways that will help with your financial planning and money management:

1. Utilizing your Canadian tax refund to plan for your retirement is a wise decision.

Here are some practical ways to achieve this:

Establish an RRSP: It is recommended to open an RRSP account with a reputable financial institution or insurance company as a means of building your retirement savings. You can contribute up to 18% of your previous year’s earned income, up to the 2023 limit of $30,780. This approach enables you to save more for your future while minimizing your tax liability today. As a result, every dollar of your Canadian tax refund will have a meaningful impact on your retirement fund.
Make a contribution to your existing RRSP: Use your Canadian tax refund to make a contribution to your existing RRSP account. The payment is tax-deductible, which will lower your taxable income and therefore your 2023 tax obligation.
Select your financial investments: Choose exactly how you wish to invest the money within your RRSP. You can select from a potpourri of financial investment options, all depending on your risk tolerance and how far away from retirement you are. This is an important element of financial planning.
Monitor and also readjust your portfolio: Frequently review your investment portfolio to make sure that it is aligned with your long-term goals. Make changes if essential to make certain that you’re on track to accomplish your retirement goals.

Investing in your retirement is a wonderful way to guarantee that you have adequate cash to support your lifestyle after you quit working. By using your Canadian tax refund to make payments to your RRSP, it is both good financial and tax planning because you’re capitalizing on a tax-efficient method to save for your future.

2. Donate to a charity or a cause you care about

Contributing all or a part of your Canadian tax refund to a charity that you believe in is a fantastic way to produce a positive impact on the world. Follow these sensible actions to make a distinction:

Select a charity: Donate to a charity that resonates with your values and beliefs. You can choose one or more charities that contribute either to your local area or anywhere around the world.
Make a contribution: Use your Canadian tax refund to make a donation to your chosen charity. The majority of charities accept contributions via online platforms, and many permit automatic month-to-month contributions.
Think about a matching gift: Examine if your company provides a donation program to specific charities that match the amount of money you donate to. See if any of those charities appeal to you.

3. Pay off high-interest debt

Using your Canadian tax refund to pay off high-interest debt is a clever way to improve your financial situation. Below are some actions you can take:

Determine what your high-interest debt is: Take a look at your debts and find those with the greatest rate of interest. These are commonly credit cards, personal loans, or payday advances.
Establish the total up to pay off: Calculate just how much of your Canadian tax refund you can afford to use to repay the high-interest financial debt. It’s of course best to be able to pay off the entire debt, but if you can’t, pay down as much as you can of the high-interest rate debt.
Make the repayment: Use your tax refund to repay in full or pay down the highest-interest rate debt first. Make certain to comply with any payment conditions set by your lender or financial institution.
Prevent accumulating brand-new financial debt: Once you’ve settled the high-interest financial obligation, stay clear of building up new high-interest rate financial debt by budgeting your expenses and restricting your use of credit cards. You don’t want to start increasing high-interest-rate debt again after you have paid it off.

Settling high-interest debt is a clever financial action since it can conserve your money in the future by reducing the amount of interest you’ll pay. It can also help improve your credit rating, which can help you in the future when you need to apply for a home or car loan. By using your Canadian tax refund to settle high-interest debt, you can take a step in the direction of financial stability and ultimately freedom from debt.

4. Take a course or learn a new skill

Utilizing your Canadian tax refund to take a program or discover a brand-new skill can be a fantastic financial investment in yourself as well as your future. Here are some steps you can take:

Select a training course or skill: Determine a course or skill you wish to learn that can benefit you in your work or personal development. This can be an accreditation program, a language course, or a skills workshop.
Study choices: Look for reliable establishments that supply the program or skill you intend to learn. You can additionally look for online options or free courses offered on the internet.
Determine the cost: Establish the overall price of the program or skill, including any kind of materials or books you might need to acquire.
Pay for it with your tax refund: Use your Canadian tax refund to pay for the course or skills training. This way you don’t have to pay any money to invest in your personal growth.
Devote yourself to learning: Once you have actually enlisted in the training course or skills workshop, dedicate yourself to completing it. Set aside time each week to attend class, do homework and study. Stay encouraged by setting objectives and tracking your progression.

Using your Canadian tax refund to further your education and learning can help your personal development and your career, or just find a brand-new interest. By using your Canadian tax refund to take a course or discover a brand-new skill, you’re making a wise financial investment in your future.

5. Start or add to your emergency fund

Using your Canadian tax refund to begin or contribute to your emergency fund can be a clever way to plan for unforeseen expenses. Here are some steps you can take:

Establish just how much to save: In previous Brandon’s Blogs, I have recommended that everyone have an emergency fund of 3 to six months’ worth of household expenses in their reserve. Calculate how much you must save based on your monthly household expenses.
Open a separate account: Open up a separate savings account for your emergency reserve. Treat this account as untouchable, except in the case of a real emergency. This will make it less complicated to track any emergency expenses you must pay from this account. You must honestly treat this account as being “in case of emergency break glass” and not use it as a nice place to get some money from whenever you feel like it.
Set up automated transfers: Set up automated transfers from your everyday bank account to your emergency fund interest-bearing account. This will allow you to maintain the discipline of saving monthly from your income and avoid forgetting to contribute to your fund.
Use your Canadian tax refund: Use your tax refund to make a round-figure payment to your emergency reserve. This can assist you in reaching your savings objective faster.
Stay clear of utilizing the cash for non-emergencies: Resist the lure to utilize your reserve for non-emergency expenses. Keep the cash in the account until you need it for unexpected emergency expenses like additional medical costs, a major auto repair bill, or in case of job loss.

Beginning or contributing to your emergency fund can provide additional financial security when faced with unforeseen expenses. Use your Canadian tax refund to jumpstart your financial savings. You are taking positive action to reach financial stability and freedom.

Canadian tax refund conclusion

In conclusion, your Canadian tax refund presents an opportunity to do more than just indulge in shopping sprees. By exploring alternative uses for your refund, you can not only make the most out of your money but also achieve various personal and financial goals. Whether it’s investing in your future, contributing to a cause you care about, or simply treating yourself to an experience, the possibilities are endless. So, before you hit the stores or add to your cart, take a moment to consider these surprising options and think outside the box. Your tax refund could be the key to unlocking new opportunities and experiences that will enrich your life for years to come.

I hope you enjoyed this Canadian tax refund Brandon’s Blog. Revenue and cash flow shortages are critical issues facing people, entrepreneurs and their companies and businesses. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind. Coming out of the pandemic, we are also now worried about the economic effects of inflation and a potential recession.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

Brandon Blog Post

CANADIAN CREDIT CARD DEBT: A COMPREHENSIVE GUIDE TO UNDERSTANDING AND TO GET OUT OF THE MENACING PROBLEM

Post author By Brandon Smith
Post date March 27, 2023

canadian credit card debt

Canadian credit card debt: Introduction

Due to the holiday buying season, December has traditionally been connected with a surge in Canadian credit card debt. Nonetheless, with the start of the COVID-19 pandemic in 2020 and the surge in case numbers, celebrations, travelling, and in-store holiday shopping pretty well stopped, resulting in an extraordinary reduction in Canadian credit card debt.

Fast forward 2 years to December 2022, and Canadian consumers have returned to their traditional pre-pandemic period of extravagance in holiday purchasing. With the pandemic’s hold loosening, Canadians have eagerly ushered in the holiday spirit, leading to a rebirth of the fad of maxing out credit cards. As a result of that, and other factors I will discuss below, Canadian credit card debt is once again growing.

The escalating issue of credit card debt in Canada is gradually becoming a matter of concern for individuals and the nation’s economy in general. In this Brandon’s Blog, I will delve deeper into the Canadian credit card debt predicament, the reasons behind its growth, and plausible solutions to tackle it.

Canadian credit card debt: What is it and why could it be a problem?

The outstanding balance of credit cards of Canadians at any specific point in time is what is described as Canadian credit card debt. It is built up when people utilize their credit card to make purchases, and afterwards, carry a credit card balance from one month to the next, rather than paying off the balance in full when due.

As this financial debt begins to grow, it can trigger a lot of stress and anxiety and make it hard to stay up to date with monthly expenses. Credit cards are well-known for having high-interest rates, which means that the longer a balance is carried, the more interest the borrower will be paying, making it even more difficult to pay down the amount owed.

Furthermore, excessive credit card debt can significantly harm a person’s credit rating, which can make it harder for them to get new loans or credit in the future. This can bring about missed payments or even default, both of which will, even more, harm their credit score.

If you don’t handle your Canadian credit card debt properly, it can lead to some serious financial problems.Canaa

The current state of Canadian credit card debt

According to recent reports by Statistics Canada and Equifax Canada, people’s credit card balances are on the rise. And it’s not just a one-time thing either – Equifax Canada’s report and the government statistical agency report both states that it has been going on for the past year. Actually, by the end of 2022, Canadian credit card debt had risen by 13.8% contrasted to the previous year, leading to an overall outstanding debt of $93.4 billion.

What’s specifically concerning is that this rise in credit card debt is striking lower-income households the hardest. With high inflation, lots of people in this group are turning to high-interest credit cards to cover important rising costs like food prices, medication, as well as rent. It’s clear that we need to do even more to sustain these Canadians and also help them resolve this problem of inflation causing extra costs for Canadians.

Credit card debt can be worrisome in Canada for a few reasons. One of them is that credit card companies tend to charge pretty high-interest rates here – around 20% or more! That’s quite a bit more than other kinds of debt you might have, like a car loan or a mortgage.

Another thing to keep in mind is that Canadians’ savings are low, due to many of the same reasons that Canadian credit card debt is rising – the main one being inflation. So if something unexpected happens, like a drop in income or an unexpected expense, some folks might not have much in the way of savings to fall back on.

All in all, it’s important to keep an eye on your credit card debt in Canada – it can pile up pretty quickly!

Canadian credit card debt: Why do Canadians have so much credit card debt?

Numerous factors contribute to the excessive credit card balances among Canadians. Among the primary reasons is the effortless accessibility of credit cards. Credit card companies aggressively market their products to Canadians, luring them with attractive incentives like sign-up bonuses, cashback rewards, and low introductory interest rates.

Canada’s high cost of living is another significant reason for the country’s high credit card debt. Canadians encounter steep housing costs, surging food and gas prices, and escalating expenses of every type and description. With income failing to keep up with expenses, many resort to credit cards to bridge the gap, leading to elevated debt.

When faced with unexpected expenses like vehicle repairs or other emergencies, many Canadians lack the necessary savings and turn to credit cards to bear the costs, further increasing their reliance on credit.

Finally, a considerable number of Canadians lack the financial literacy to fully understand the trap they are falling into by continuing their credit card usage with no hope of ever repaying the balance owed.

Canadian credit card debt: Common mistakes people make when it comes to credit card debt in Canada

Signing up for too many credit cards: This can make it challenging to stay on top of monthly payments and may even lead to overspending.

Neglecting to regularly review credit card statements: This can result in harmful errors or unchecked fraudulent charges, which can add up and cause undue stress.

Making large purchases: Using credit cards for a major expensive purchase without having a clear plan to pay off the balance, can lead to hefty interest charges and long-term debt.

Applying for too many credit cards: Often enticed by sign-up bonuses or rewards, too many credit cards can lead to an inability to monitor payment schedules and overspending.

Failure to regularly review credit card statements: This can result in undetected errors or fraudulent charges. This may ultimately result in an increased balance owed or avoidable fees.

Financing large purchases: Buying major expensive items such as automobiles or vacations using a credit card without a clear plan for repayment can lead to high-interest charges and long-term debt.

It’s essential to be mindful of these pitfalls and take steps to avoid them to stay financially healthy.

Canadian credit card debt: How to tackle credit card debt in Canada

The following are 7 practical tips and strategies that Canadian individuals grappling with credit card debt can utilize:

Establish a budget: The primary step towards addressing Canadian credit card debt is establishing a budget. This will let you understand your revenue and expenses while identifying areas where you can decrease expenses to free up finances for debt repayment. It’s essential to factor in all bills, taxes, expenditures, and debt payments while drafting your budget.
Prioritize debt repayment: After developing a budget, prioritize debt repayment. Begin by repaying high-interest debt, such as credit card debt, and make minimum payments on other debts.
Consolidate debts: Consider consolidating credit card debt into a single loan that charges a lower interest rate. This simplifies debt management and lowers the interest paid over time.
Seek expert assistance: If faced with challenges managing your debt, consider seeking expert assistance. This could involve partnering with a community non-profit credit counselling agency or a licensed insolvency trustee.
Reducing expenses: Scrutinize your expenditure and identify areas where you can cut back, such as dining out, grocery shopping, and utility bills. Every penny saved can contribute towards debt repayment.
Increase your income: This could include freelancing, part-time work, or selling unused items. These avenues could provide the additional funds necessary to accelerate your debt repayment.
Avoiding unnecessary expenses: Using cash or debit cards as the form of payment instead of credit cards makes you think twice about every purchase before you make it.

Learning and using sound financial habits is fundamental for avoiding future credit card debt. Here are several compelling reasons why:

It creates superior financial management skills: The adoption of good financial habits, such as meticulous budgeting, diligent tracking of expenses, and prudent saving for unexpected contingencies, equips one with enhanced financial management skills. When one is always aware of their financial standing, they are less prone to impulsive expenditures, and the possibility of succumbing to credit card debt is thereby minimized.

It engenders a robust credit history: Good financial habits, such as paying your bills by their due date in full are what establish a good credit score. This augments the likelihood of future credit approvals and can result in more favourable interest rates and terms.

It eliminates tension and apprehension: Debt can be a source of profound stress, causing anxiety and other psychological distress. The development of good financial habits, together with the avoidance of credit card debt, can eliminate such concerns,

Canadian credit card debt: Conclusion

To conclude, by implementing these measures, you can take charge of your credit card debt and gradually work towards becoming debt-free.

I hope you enjoyed this Canadian credit card debt Brandon’s Blog. Revenue and cash flow shortages are critical issues facing people, entrepreneurs and their companies and businesses. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind. Coming out of the pandemic, we are also now worried about the economic effects of inflation and a potential recession.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

Brandon Blog Post

SILICON VALLEY BANK: COULD A CANADIAN BANK EXPERIENCE A GIGANTIC CATASTROPHIC FAILURE?

Post author By Brandon Smith
Post date March 20, 2023

silicon valley bank

Silicon Valley Bank failure: The SVB collapse

A subsidiary of the SVB Group called Silicon Valley Bank was heavily servicing the technology industry. The California-based Silicon Valley Bank is located in Santa Clara, in the Golden State and has been around since 1983. Ever since, they have actually opened up offices in a lot of various other places like the UK, Israel, as well as China.

Silicon Valley Bank’s pride and joy was all about supplying a variety of financial solutions, such as commercial business loans, private banking, asset administration, and also financial investment banking. They focused on dealing with start-ups, investors, and technology firms at differing phases of growth, providing them with access to resources, and know-how, as well as vital sources of capital.

With an eager focus on advancement, Silicon Valley Bank’s aim was to promote close relationships with the tech industry. They have actually contributed to funding lots of top-level technology firms, including Amazon, Tesla, and also Twitter, among others.

In this Brandon’s Blog, we dive deep right into the murky waters of SVB’s bankruptcy. We explore the various elements that contributed to this significant downfall and also look at what could happen if a Canadian financial institution failed.

Silicon Valley Bank failure: A brief history of Silicon Valley Bank

Silicon Valley Bank has been a game-changer in the tech market by satisfying the financial requirements of budding start-ups and their VC investors. With a first emphasis exclusively on tech start-ups, SVB soon branched out to cover a varied range of markets, including health care, energy, and even the wine industry.

At the heart of SVB’s organization lies a unique technique – developing resilient relationships with businesses just coming into existence and beginning to display signs of future potential, offering tailor-made financial and advisory solutions to allow for their development and growth. As well as it’s not a surprise that for many years, this Silicon Valley financial institution has actually contributed to the success of countless technology giants that we know today.

silicon valley bank

The Impact of Silicon Valley Bank’s failure on the Tech Industry: Here’s the latest on the banking crisis

With SVB being a principal in the industry, its death has created a void that will certainly be hard to fill. The financial institution’s lending tended to focus on early-stage start-ups making it a vital source of financing for lots of young businesses. Its bankruptcy has actually left most of these start-ups battling to secure funding, with fewer alternatives offered out there.

Along with its impact on startups, the Silicon Valley Bank failure has additionally influenced venture capitalists and also other investors. Numerous VC firms had partnerships with the bank, which gave them crucial financial and also consulting services. With SVB’s closure, these companies are now left without this key partnership, making it difficult for them in an unstable marketplace.

Silicon Valley Bank failure: What led to the Silicon Valley Bank failure?

Last week, SVB shocked the financial world by filing for bankruptcy protection. The reasons cited by the institution varied, including defaults on bad loans and losses in their investment holdings. Unfortunately, that’s not all. SVB was also hampered by regulatory restrictions and fierce competition, making it difficult to secure profits.

Many in the industry are bewildered by SVB’s sudden downfall, wondering how such a once-thriving bank could plummet so rapidly. Reports have uncovered that the root of SVB’s troubles can be traced back to their daring lending tactics.

SVB was renowned for its bold lending practices, including funding startups at an early stage with little to no revenue. Although this approach had delivered remarkable returns in the past, it left the bank now in this sad state.

silicon valley bank

Silicon Valley Bank failure: Can Canadian banks fail?

Naturally, bank failures can be a source of worry for Canadians since we put their money into financial institutions. The issue of whether or not a bank failure is a concern in Canada has been widely debated.

The stability and security of the Canadian banking system are widely acknowledged as among the best in the world. This is attributed partly to the rigid guidelines and also oversight enforced by both the federal government and the Bank of Canada. The financial industry in Canada is dominated by five main large institutions; The Royal Bank of Canada, TD Bank, Scotiabank, Bank of Montreal, as well as the Canadian Imperial Bank of Commerce, with smaller financial institutions and also credit unions also adding to the industry.

The diversity of the Canadian banking system spurs competition and aids to mitigate the risk of systemic failure in the event of a financial crisis. To make sure that the financial institutions have the required funding to withstand declines in the Canadian economy, Canadian banks need to hold sufficient capital and also undergo regular stress tests.

Although anything is possible, Canadian economic history and the regulation of Canadian banks suggests that a Canadian bank failure is a remote possibility.

Silicon Valley Bank failure: The Bank of Canada keeps Canada’s financial system healthy

The Bank of Canada, being the supreme financial authority in the Canadian economy, is mandated with the crucial responsibility of ensuring the overall economic and financial well-being of the country. Its multifaceted role encompasses a range of fundamental functions, some of which are outlined hereunder:

Monetary Policy: The Bank of Canada is entrusted with the pivotal responsibility of charting and operationalizing the monetary policy framework for the country. This involves meticulous regulation of the overnight rate, which serves as Canada’s key interest rate and consequentially influences the lending rates for commercial and consumer customers of Canadian financial institutions. The Bank of Canada’s primary objective is to maintain inflation at manageable, stable, and predictable levels.
Financial System Stability: The Bank of Canada is a vigilant guardian of Canada’s monetary system stability. It ensures sustained liquidity to the economy during times of financial distress and supervises and regulates financial institutions operating in Canada to mitigate against potential risks and losses.
The Bank of Canada is vested with the responsibility of currency issuance, encompassing the creation and dissemination of Canada’s legal tender. It is also accountable for the safeguarding of Canada’s monetary system, upholding its security and soundness.
In pursuit of its mandate to promote economic welfare, the Bank of Canada undertakes rigorous research endeavours aimed at exploring various economic issues. These include but are not limited to inflation, macroeconomic growth, and monetary stability. Furthermore, the Bank publishes economic data and conducts analytical assessments to equip policy-makers with the requisite information necessary for decision-making.

All in all, the Bank of Canada assumes a pivotal role in the maintenance of a stable and thriving Canadian economy.

silicon valley bank

Silicon Valley Bank failure: Precedents for bank failures in Canada

The rich history of Canadian banking started in 1817 when the first financial institution was created. The first Canadian bank collapse was the Home Bank in 1923. That was an outcome of enormous fraud.

In September 1985, two Western Canada-based banks, Northland Bank and Canadian Commercial Bank failed. This triggered a period of mergers in Canada’s banking sector, with many smaller financial institutions merging with the largest banks.

But the good news is that since the 1985 bank failures, the Canadian financial market has been unfailing. The federal government has put stringent regulations as well as oversight in place. There have been failures of some regional trust and loan companies, but no federally chartered bank has failed since the two in 1985.

Some lessons that have been learned from these bank failures are:

Diversification is crucial: Financial institutions that had a varied portfolio of loans and investments were much better able to weather financial recessions than those that were heavily overweighted in a specific industry or geographic location.
An effective guideline is vital: The Canadian federal government’s regulatory structure played a substantial role in preventing any chartered bank from failing during the global economic conditions and the economic crisis of 2008. Efficient laws can help recognize as well as minimize dangers before they come to be significant problems.
Company culture issues: In a few of the financial institution failings that took place in the past, there was a history of risk-taking as well as lax oversight. Financial institutions that prioritize strong controls for monitoring risk, as well as accountability, are much better positioned to prevent tragic failures.
Collaboration is vital: Throughout times of financial tension, cooperation between financial institutions, regulators, as well as the federal government can help prevent systemic failures and also mitigate the influence of any economic downturn.
Openness is important: Clear and precise reporting of financial details is necessary for investors and regulators, as well as the general public, to comprehend the threats and the health and wellness of financial institutions.
Prudent lending methods are important: Financing practices that prioritize creditworthiness and also risk management are important for maintaining the security of the economic system.

In general, the lessons gained from past financial institution failures in Canada underscore the value of diversity, efficient laws, a strong business culture of controls over risk-taking, transparency and sensible financing practices for the stability and health of Canada’s financial system.

Silicon Valley Bank failure: What happens to deposits if a Canadian bank failed?

The Canada Deposit Insurance Corporation (CDIC) is a Crown corporation that protects the balances held by Canadian depositors in the event of a bank’s failure, to a specified maximum amount.

If a participant bank fails, the CDIC repays eligible depositors for their insured deposits up to b$100,000 per depositor, per insured deposit classification. This protection maintains the stability of the Canadian financial system as well as ensures that Canadians can continue to access their funds as needed.

To promote sound monetary practices and also effective economic frameworks, the CDIC likewise keeps an eye on and analyzes the dangers of dealing with Canada’s monetary system while teaming up with other organizations.

silicon valley bank

Silicon Valley Bank failure: 5 ways Canadians can prepare for bank failure

Financial institution failures are a significant matter, and it is necessary to take proper measures to safeguard your funds. Although such occurrences are unusual in Canada, it is a good idea to be planned for unforeseen situations. To this end, Canadians can adopt the complying with actions:

Track your accounts: Regularly tracking your account balances and investments can assist you to identify any type of unauthorized activity or errors at an onset.
Distribute your funds: Instead of retaining all your funds in a single savings account, you might consider distributing your financial savings across separate categories of accounts or type per institution up to the CDIC-insured amount. By making sure that all of your bank deposits are eligible deposits, you will eliminate the danger of losing your money in the event of the failure of a bank.
Understand your coverage: The CDIC gives deposit insurance coverage of up to $100,000 per insured group per bank. Make certain you know the coverage limitations and which of your accounts are placed in insured categories.
Diversification: It is recommended that you expand your investment portfolio by taking into consideration all investment types like stocks, bonds, or real estate if you have significant savings. Staying informed as well on news and advancements in the financial sector is crucial. You need to know any signs of difficulty at your bank to make sure that you can take timely action.
Preparing a backup plan: In case of a bank fails, you must have sufficient cash money to cover your immediate needs as well as different resources of debt or funding. These steps can help you remain tranquil as well as focused in a dilemma.

Although the possibility of a financial institution failing in Canada is low, the government has steps in place to safeguard depositors. Taking these preventative measures can aid you to feel extra safe and prepared for any unforeseen event.

Silicon Valley Bank failure: Conclusion

To conclude, the Silicon Valley Bank failure has sent out shockwaves in the tech sector, the global banking system and the financial markets. There will no doubt be a detailed post-mortem analysis of what went wrong. No doubt the bank’s risk management practices which shaped its lending practices and exposure to the tech industry played a significant part in its downfall. With fewer alternatives offered for funding as well as advisory services, start-ups and investors will need to find new alternatives in the marketplace to be successful in the post-Silicon Valley Bank world.

The Canadian banking system and our domestic banks are considered to be one of the most stable, safe and secure on the planet. While there are possible dangers, such as high levels of household debt and a real estate market correction, the Canadian federal government and regulatory bodies have ongoing programs to prevent major bank failures and to safeguard depositors should a federally chartered bank fail. Furthermore, the CDIC supplies deposit insurance as described above, which shields depositors in the event of a financial institution failure. Generally, Canadians can feel confident in the strength and security of their financial system.

I hope you enjoyed this Silicon Valley Bank failure Brandon’s Blog. Revenue and cash flow shortages are critical issues facing people, entrepreneurs and their companies and businesses. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind. Coming out of the pandemic, we are also now worried about the economic effects of inflation and a potential recession.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

Brandon Blog Post

ACHIEVING A FRUGAL LIFESTYLE TO AVOID MONEY PROBLEMS: 22 TIPS FOR SAVING

Post author By Brandon Smith
Post date March 13, 2023

frugal lifestyle

frugal lifestyle

Frugal lifestyle: Introduction

Living in our modern world can be exciting and fast-paced, with new trends and technologies emerging constantly. It can be tempting to want to keep up with the latest experiences and indulge in a lavish lifestyle. However, it’s crucial to remember the importance of living within our means and not overspending.

Contrary to popular belief, a frugal lifestyle doesn’t mean sacrificing enjoyment or being stingy. Instead, it involves making smart financial decisions that ensure long-term sustainability and peace of mind. By embracing a financially savvy way of life, the shackles of money-related instability are lifted, and we can chase our wildest aspirations without a care in the world. Adopting frugality as a way of life can be the key to keeping your debts under wraps, and avoiding the need to enlist the assistance of finance gurus to conquer the many trials and tribulations of money management.

Frugal lifestyle: Definition of frugal living

Living a frugal lifestyle means choosing to live a life of purpose and intention. It’s about recognizing the value of every dollar and making conscious decisions that align with your goals and values. By living simply and mindfully, you can achieve financial freedom and create a life that brings you joy and fulfillment. Embrace the power of thriftiness, unlock your creativity, and discover the joy of living a life free from excess and waste. Let your frugal lifestyle be a source of inspiration to others, as you lead by example and show that happiness comes not from material possessions, but from the richness of human connection and the beauty of the natural world.

According to Merriam-Webster, being frugal implies an absence of luxury and a simple life. It involves using resources efficiently, being thrifty and avoiding waste, and making wise financial decisions in your daily life. It does not necessarily mean a cheap person!

Typically, living frugally involves being mindful of one’s spending habits and choosing to prioritize expenses that bring genuine value to one’s life. This kind of lifestyle is often associated with practicality, self-reliance and an eye toward financial security.

Embracing frugality might mean opting for used items over new, cultivating a garden to produce fresh produce, and avoiding frivolous expenses that don’t contribute to overall well-being. Ultimately, a frugal lifestyle is about making conscious choices that support long-term financial stability and personal satisfaction.

Frugality is a term that holds different meanings for different folks. As per Wealthsimple, adopting a frugal lifestyle requires a conscious effort to regulate one’s expenses and concentrate on a few financial objectives. Those interested in frugal living should assess their aspirations and explore ways to leverage their finances to achieve them.

frugal lifestyle

Frugal lifestyle: Importance of frugal living

To begin with, adopting a frugal lifestyle fosters introspection and reflection, enabling individuals to discern their priorities and values when establishing budgets. As a result, individuals can ensure that their expenditures are congruent with their financial objectives, thereby enhancing their financial stability and security.

In addition, frugal living serves as a powerful tool for averting needless debt and financial strain. By adhering to a lifestyle that is commensurate with their financial means and avoiding superfluous spending, individuals can steer clear of debt accumulation while maintaining their creditworthiness.

Lastly, embracing a frugal life can expedite the attainment of financial goals. By prioritizing savings and curbing extraneous expenses, individuals can optimize their monetary resources and achieve their financial aspirations with greater speed and efficiency.

We normally associate a frugal lifestyle with low-income families, but as you will see below, that is not always the case.

Frugal lifestyle: Meet Herbert Jones, the Sensible Spender

Herbert Jones is a promising 6’7″ 24-year-old small forward/shooting guard hailing from the University of Alabama who is making waves for the New Orleans Pelicans of the National Basketball Association (NBA). Jones’ admirable fiscal habits have caught the attention of many, as he displays a rare sense of financial consciousness living a frugal lifestyle that is never associated with professional athletes.

Jones is a frugal person and shows a profound appreciation for financial stability and practicality and is indeed a much-needed respite in a society that is fraught with materialism and the seduction of social media. Jones confronts enormous pressure to deliver exceptional performances while simultaneously meeting the standards imposed on him. Undeterred by these trials, Jones remains unruffled and continues to exhibit a laudable degree of fiscal prudence.

Jones has already made a name for himself as a prudent spender. During several interviews, he has emphasized his commitment to putting aside a significant portion of his earnings and investing them wisely for the future. Raised in a family that instilled in him the value of responsible financial management, Jones takes a methodical and cautious approach to his finances. Although he can spend hundreds of dollars or even thousands of dollars on any single item, he chooses not to. His financial acumen is not only impressive but also inspiring to young athletes who often fall prey to impulsive spending.

frugal lifestyle

What we can learn from Herbert Jones’ frugal lifestyle

Herbert Jones just wears team gear rather than buying expensive clothing. Some might see this as a sign of being cheap. The fact is that he is simply wise with his cash. By benefiting from the free clothing offered by the Pelicas, Jones is able to conserve money on apparel expenses and also place that cash towards more important things, such as savings and investments for his future.

As an NBA star, he is among the richest people but does not act like it. The average person can learn a lot from his philosophy about money and where to spend it in their everyday life. Jones’ prudent technique to fashion should make us all think about how we can all make clever economic decisions, regardless of what we each earn every year. By remaining concentrated on long-term monetary objectives, we can all be a bit like Jones so that can make sure that we are able to take pleasure in a comfy retirement and also take care of our households long after our employment days are over.

Herbert Jones has undoubtedly thought about the influence his way of living will have on his long-term monetary well-being. This includes every little thing from making smart purchasing decisions, preventing out-of-control financial debt, developing healthy and balanced routines as well as focusing on self-care. By taking a holistic method to his monetary planning and decision-making, he can make sure that he is able to attain his financial objectives while preserving a healthy and balanced way of life.

Frugal lifestyle: The Importance of Being Financially Savvy

Regardless of each of our annual income levels, we can all learn from Herbert Jones’ frugal lifestyle. Spending less than we earn (after tax) so that we can pay off debt, have an emergency savings fund and save more for the future works for everyone. Suffice it to say if you live this kind of lifestyle, you will be able to handle financial challenges as they come your way. You won’t need to ever consult with a licensed insolvency trustee!

Mr. Jones’ financial philosophy is not limited to frugality; rather, he also subscribes to the notion of astute investments. During his conversation with The Athletic, Mr. Jones divulged his interest in the real estate sector and expressed his intent to explore investment opportunities in this domain. This manifestation of his sagacity implies that Mr. Jones is not merely fixated on the present, but he is also judiciously contemplating his future prospects.

The prudent practices of Herbert Jones are not only commendable but also imperative, particularly for professional athletes whose relatively short careers can end at a moment’s notice. It is widely acknowledged that numerous professional athletes encounter financial ruin once their athletic pursuits come to an end, despite having amassed millions of dollars throughout their active years. This predicament can be attributed to various factors, such as ill-informed financial counsel, unwise investments, and lavish spending patterns. Herbert Jones is obviously striving for financial freedom after his playing days are over.

Notably, Jones appears to be an individual who is forward-thinking in his approach to financial planning. He is demonstrating a commitment to securing his financial future by adopting a prudent lifestyle, making astute investments, and seeking the guidance of financial experts. Consequently, Jones is positioning himself for sustained financial security over the long haul. This is not only advantageous for him personally, but also for the prosperity of the NBA as a whole.

The NBA is often perceived as a league that celebrates indulgence, with players ostentatiously displaying their affluence and living lavish lifestyles. However, while certain players may indeed embody such behaviour, it is not a viable or sustainable way of life in the long run. In order to prevent its players from falling into financial traps and to ensure their future stability, the NBA can play a crucial role in inculcating financial literacy and responsibility among its members.

frugal lifestyle

Frugal lifestyle: Benefits of a frugal living lifestyle

Having financial security opens up a range of possibilities for joyous living. It’s the art of balancing your finances like a professional and waving farewell to financial distress. A few of the benefits that come with being financially secure are:

Reduced financial stress

The application of cost-containment strategies in the pursuit of a frugal living journey can alleviate the financial strain experienced by individuals who habitually outspend their income. As a consequence, this methodology promotes an elevated degree of fiscal equilibrium and psychological well-being.

Helps you spend according to your priorities

By welcoming a frugal habits way of life, you will become the master of your cash, living life on your own terms. It’s everything about taking stock of what genuinely matters to you and aligning your spending routines with those priorities. With this method, you’ll never engage in meaningless splurges or frivolous expenses, since every penny you spend will be deliberate and intentional. It’s all about being wise and also accountable for your finances.

Increased productivity

Those who are financially secure can channel their energies toward their work without the baggage of nagging financial concerns. The absence of money problems allows them to be highly productive without the burden of carrying their financial worries to work.

On the other hand, individuals grappling with financial hardship might find it near impossible to focus on their work and be easily distracted by tension, as well as feelings of stress and anxiety that come with their financial predicaments.

Improved relationships

Unlock the key to harmonious relationships with a solid financial footing. Eliminating financial strains releases the shackles of anxiety, allowing people to nurture their interpersonal connections with renewed vigour and unbreakable bonds of love.

Better mental health

Achieving a sound state of mind is no small feat, but securing your finances can undoubtedly take you a long way. When your pockets are filled with abundance, the weight of financial woes no longer drags you down. Imagine the feeling of being in full command of your life, the power of financial stability can bring you that and more.

Anxiety and depression brought about by money troubles become a thing of the past, as tranquillity and contentment take over. With financial security, your mental well-being is given a boost that can only be described as liberating.

Ability to pursue passions

Financial stability can also allow individuals to pursue their passions and interests. When people are not weighed down by financial worries, they can take risks and pursue new opportunities without fear of financial ruin.

Unlock the secret to lavish living without breaking the bank: Master the art of frugal budgeting!

Crafting a budget that aligns with your financial goals can be daunting, yet it’s crucial for your economic well-being. You don’t have to navigate this process alone, as we’ve gathered some tips to assist you in fashioning a budget that suits your individual needs.

Budget based on your lowest income month: If you have an inconsistent or irregular income, it’s best to budget based on what a low-earning month would look like for you. This will be your budgeting income. List the things you’d put in your budget and prioritize them accordingly. This technique can help you avoid overspending during your high-earning months.
Get your finances in check with the 50/30/20 game plan! This clever rule of thumb which can lead to financial freedom encourages you to break down your hard-earned dough into three distinct realms: must-haves, indulgences, and nest eggs. Set aside a whopping 50% of your earnings for critical costs like rent, groceries, and getting around town. Then, treat yourself to 30% of your budget for fun and fabulous personal expenses. Finally, stash away a savvy 20% in savings for a rainy day (or an epic adventure). Whether you’re a budgeting newbie or a seasoned pro, the 50/30/20 rule is an awesome way to get a handle on your money matters and live life to the fullest!
Craft a budget plan with honesty and authenticity: When developing a family spending plan, it is very important to admit what you can afford and therefore what your lifestyle must be based on your family income. It’s time to deep study all your monthly expenses for a minimum of one month. This will certainly highlight the areas where you can make adjustments and build a budget that is not just genuine yet likewise one you’ll be able to stick to.
Establish certain financial goals: Determine what you want to accomplish with your money, such as repaying financial obligations, saving for a trip, or building a cash reserve. Establish certain financial objectives and include them in your budget to aid you to remain determined and also on course, including saving your extra money.
frugal lifestyle

Frugal lifestyle: 22 tips to live a financially sustainable life

If cash is in short supply and you need to make your family budget balance, here are 22 tips to help you.

Saving Money at Home

Reduce your energy consumption
Buy in bulk
Meal prep and cook at home
Use coupons and discount codes
Use cashback apps and websites

Saving Money on Transportation

Walk, bike or take public transportation
Carpool
Keep up with regular car maintenance

Saving Money on Shopping

Shop at thrift stores and garage sales
Use shopping apps and websites to compare prices
Wait for sales and clearance items
Avoid impulse purchases
Buy second-hand items

Saving Money on Food

Reduce your meat intake
Use meal planning to reduce food waste
Shop seasonally
Plant your own garden
Use cashback apps for grocery shopping

Saving Money on Entertainment

Find free events in your community
Use library resources
Take advantage of streaming services
Create a budget for entertainment

Frugal Lifestyle: Summary

I hope you enjoyed this frugal lifestyle Brandon’s Blog. It is my hope that those experiencing money problems can use these frugal life tips as inspiration to correct course now without needing the services of a licensed insolvency trustee.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

Tags average person, cheap person, daily life, everyday life, extra money, financial freedom, food waste, frugal habits, frugal life, frugal lifestyle, frugal living, frugal living journey, frugal living lifestyle, frugal person, Ira Smith Trustee, meal planning, monthly expenses, simple life

Brandon Blog Post

FROM GRIPPING TAKEOVER TO DISCHARGE: HOW LONG DO RECEIVERSHIPS LAST?

Post author By Brandon Smith
Post date March 6, 2023

how long do receiverships last

How long do receiverships last in Canada? Introduction

In my September 2021 Brandon’s Blog, THE CANADIAN RECEIVERSHIP EASY BEGINNERS GUIDE, I provided an easy-to-understand guide to understand the receivership process. To summarize, I described that in Canada, a receivership is a legal remedy available to secured creditors to recover outstanding amounts under a secured loan if a company defaults on its loan payments. It may also be used in shareholder disputes to complete a project, liquidate assets, or sell a business.

A court may appoint a receiver to take possession of assets, oversee liquidation proceedings, and distribute the proceeds according to the applicable legal priorities as outlined in Canada’s Bankruptcy and Insolvency Act (BIA). Or, a secured creditor may issue a letter of appointment to the same effect.

It is essential to recognize that receivership and bankruptcy are distinct legal proceedings. Bankruptcy is a formal proceeding, regulated by the BIA, to provide debtors with debt relief when they are financially incapable of paying their unsecured creditors. Conversely, a receivership is a process available to secured creditors to recuperate outstanding debt arising from a secured loan or to address shareholder disputes.

The purpose of this Brandon’s Blog is to answer the question I am often asked: “how long do receiverships last in Canada?”.

how long do receiverships last

How long do receiverships last in Canada? Understanding what receivership is

There are two types of receiverships in Canada: court-appointed receiverships and private receiverships. Court-appointed receivers are appointed by a court to oversee the management and disposition of a debtor’s assets. Private receivers are appointed by secured creditors as part of a loan agreement and the security agreement between the debtor company and the creditor.to manage and sell a business debtor’s assets outside of the court system.

The receiver, regardless if it is a court-appointed receiver or privately appointed receiver, takes control of a company’s assets and business operations to repay outstanding debts to creditors. The receiver’s primary duty is to maximize the value of the assets and distribute the proceeds to the creditors according to their priority ranking. The receiver has the power to sell, manage, or liquidate the assets and may also negotiate with creditors to restructure the company’s debt.

Some key players in a receivership process are:

Borrower: The owner of the property who defaults on their loan obligations or faces financial distress.
Lender: The secured lender, normally a financial institution, who initiates the receivership action to protect their interest in the property and recover their debt.
Receiver: The neutral third party who is a licensed insolvency trustee (formerly called bankruptcy trustees) and is appointed either privately or by the court to take charge of the property and manage it toward a sale or resolution.
Court: The judicial authority that grants or denies the receivership request, sets the terms and conditions for the receiver’s appointment and oversees the receivership process.
Law firm: The lawyers who are acting for the lender, the borrower and the court-appointed receiver.

The powers and duties of a receiver can vary depending on the nature of the assets or the court order appointing them. Generally, it includes taking control of the assets, managing them in a financially responsible manner, and reporting to the court and parties involved in the dispute.

The duration of receiverships in Canada can vary depending on the specific circumstances of the case, but it typically lasts for a few months to over a year.

how long do receiverships last

How long do receiverships last in Canada?

Several factors will affect the duration of receivership in Canada, including:

the complexity of the case;
the number and nature of the assets involved;
the cooperation of the parties involved; and
the efficiency of the court system.

Other factors may include the availability of qualified professionals to manage and sell the assets, the level of creditor involvement and negotiation, and the overall economic and market conditions at the time. Ultimately, the length of receivership will depend on the specific circumstances of each case.

Court supervision is the oversight provided by a court in a court-appointed receivership. The purpose of court supervision is to appoint the receiver, to allow for the receiver to obtain the approval of the court to decisions and actions the court-appointed receiver wishes to take, to ensure that the receiver acts in the best interest of all parties involved and follows the court’s orders and to allow a forum for any aggrieved party to bring their dispute to the court for adjudication.

Termination of a receivership occurs when the court is satisfied that the receiver has fulfilled their duties and objectives or when the receiver’s appointment is no longer necessary. The court terminates a receivership by court order after approving the receiver’s final report and accounts.

how long do receiverships last

How long do receiverships last in Canada? Frequently asked questions (FAQs)

Navigating receiverships can be a tricky and complex situation. Asking questions like “how long do receiverships last in Canada?” is essential to any company dealing with financial hardship. Here I will cover some of the common FAQs associated with receiverships in Canada, and provide an in-depth look at the timeline of these proceedings. It is essential to have a thorough comprehension of receiverships to successfully manage this situation.

What are the differences between bankruptcy vs. receivership?

Receivership is a process to secure the rights of secured creditors, allowing for the control and eventual sale of the assets of a distressed company. Bankruptcy, on the other hand, is a legal process which allows a company in financial difficulty to reorganize its affairs or liquidate its assets under the guidance of an insolvency trustee – providing a safety net to unsecured creditors.

What happens during a receivership process in Canada?

As part of the receivership process in Canada, a receiver is appointed to handle a company’s assets and activities, facilitating the sale of these to settle the company’s debt to creditors.

How does a receiver sell a business or assets?

To sell a business or assets, a receiver has many options available. A receiver can:

advertise the assets for sale by running a tender bid sales process;
a tender bid sales process could be stand-alone or could be combined with a stalking horse sales process;
the assets could be liquidated through a public auction using the services of an auctioneer;
the receiver could hand all the assets over to a liquidator in order to sell the assets in an online auction;
in certain circumstances, the receiver may wish to hire a professional business broker experienced in that particular industry or assets the receiver took possession of; or
for retail store assets, the receiver may sell the entire package of assets and will then run a retail sale to the public.

Regardless of the process chosen, the receiver’s aim is to market and sell the assets or business and obtain the best price for the assets or business under the circumstances.

How does a creditor apply for receivership in Canada?

Secured lenders can apply for receivership in Canada by filing an application to the court under a federal or provincial statute or enforcing their security rights by appointing a receiver privately through a security instrument by way of an appointment letter. A receivership is a remedy that allows a secured creditor to take control of and sell the debtor’s property and assets to collect their secured debt through a private or court appointment process.

Can a receivership be stopped or avoided?

Receivership can sometimes be stopped or avoided through negotiation with the secured creditor(s), restructuring or refinancing of debts, or by finding alternative sources of funding. However, whether or not it can be stopped or avoided depends on the specific circumstances of each case. The cessation of receivership will not be easy unless the secured creditor is being paid out.

how long do receiverships last

How does a creditor enforce a secured loan in Canada?

In Canada, a creditor can enforce a secured loan by appointing a receiver under a private contract or through the court process. Upon appointment, the receiver will seize and sell the secured assets or the assets set out in the court order to recover the amount owed.

However, before being able to appoint the Receiver, there have to be one or more events of default as described in the loan agreement. Then, the lender must be reasonable in allowing the company borrower to cure the default. If the company in default does not remedy the default(s) and the lender has lost confidence, the lender can then make a written demand on the company to repay the entire loan, plus interest and costs and also serve the necessary statutory form on the defaulting borrower.

The lender must give the borrower a reasonable period of time to repay the secured lender’s debt. Reasonable time will vary depending on the unique circumstances of the situation. In Canada, the minimum amount of time that has to be given is 10 days, unless the borrower acknowledges in writing that they can never repay the debt and is waiving the notice period.

What are the legal options available to recover outstanding loan payments?

Legal options available to recover outstanding loan payments may include sending demand letters, filing a lawsuit, obtaining a judgment and using collection methods such as wage garnishment or asset seizure.

How long does the bankruptcy process take in Canada?

The timeline of a corporate bankruptcy process depends on the uniqueness and complexity of each individual situation. There is no typical timeline, but, it could be a year or more from the start of the bankruptcy until the licensed insolvency trustee is discharged.

How do I liquidate assets in Canada?

When seeking to divest yourself of some assets you have a plethora of choices – in the case of an asset like real estate, you can list it on the public market. Alternatively, you can try to find the right buyer on your own. Or, if you’d like some professional assistance, enlist the help of a savvy broker or financial adviser.

What are the consequences of not paying off secured loans in Canada?

In Canada, if you don’t pay back a secured loan, the lender may reclaim the collateral you put up, personal property like a car or real property such as a house. Don’t let your possessions be taken away! Be sure to make all loan payments in a timely manner.

how long do receiverships last

How long do receiverships last in Canada? Conclusion

So I hope that you now have a good appreciation for receiverships in Canada including the answer to the question “how long do receiverships last in Canada?”. If your company or business is under financial pressure and your secured creditor is about to demand full repayment of all loans, you need immediate professional advice.

Revenue and cash flow shortages are critical issues facing entrepreneurs and their companies and businesses. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind. Coming out of the pandemic, we are also now worried about the economic effects of inflation and a potential recession.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

Brandon Blog Post

THE DEVASTATING EFFECTS OF ROMANCE SCAMS: UNREPORTED LOSSES AND EMOTIONAL TRAUMA

Post author By Brandon Smith
Post date February 27, 2023

Romance Scams: Introduction

Doubtless, you read many blogs in the last couple of weeks that incorporated Valentine’s Day into their theme. Now that Valentine’s Day 2023 has passed, I thought I would write about an increasing trend among online scams; romance scams.

Online romance scams are becoming increasingly prevalent and can have severe financial and psychological repercussions for victims. The COVID-19 pandemic has further exacerbated the growth of these types of scams, making it essential for people to be aware of how to recognize and avoid such schemes. Unfortunately, victims may be reluctant to report this type of crime out of shame and fear of being mocked, which suggests that the actual amount of cases is likely much greater than what has been reported.

In this Brandon’s Blog, we’ll explore the psychology and tactics of romance scammers, the staggering costs of romance scams, and the emotional trauma that victims face. I’ll also provide practical advice on how to avoid becoming a potential victim of online scams, from identifying warning signs to protecting your personal information online. Don’t let love or the chance for a fast money score blind you – stay informed and protect yourself against (romance) scams.

What are romance scams? Their prevalence in the digital age

Romance scams are a type of cybercrime in which a person is misled into believing they have formed a romantic connection with someone they met online. In reality, the other person is a cybercriminal utilizing a false identity to win the victim’s trust and eventually request or threaten them for money.

Scammers tend to create false identities in order to establish a sense of closeness and trust with their victims. After this connection has been built, they use their victim’s belief it is a real romantic relationship to try and extract money from their victims.

Romance scammers are skilled at creating fake online dating profiles with attractive photos stolen from the internet. They may even assume the identities of real people and study information people share online to pretend to have common interests.

Romance scams are prevalent in the digital age, with reports indicating that they have hit record highs in recent years. It is important for individuals to be aware of the signs of romance scams and to exercise caution when engaging with individuals they meet online.

Scammers have all sorts of tricks to try and fool people, and it’s important to know what they’re up to in order to stay safe. In addition to the fake identity, here are some of the methods they usually use for scamming people in all sorts of ways, not just romance scams:

Cybercriminals can be sneaky and pretty convincing with their tactics. They’ll try to trick people into clicking on shady links, opening sketchy attachments, and downloading bogus software. Some examples of their tactics are fake security alerts, fake virus warnings, and bogus tech support scams.
In spear phishing attacks, you have to watch out for scammers who know exactly who they are trying to get money or info out of. They often use cloud services like Dropbox and Google Drive to spread malicious documents, so don’t trust any links or downloads you get from someone you don’t really know.
Scammers take advantage of shared weaknesses among their victims to get them to trust them and do what they want. For instance, people who fall for a scam may be more gullible, lack self-control, or be looking for a get-rich-quick scheme.

It’s super important to keep an eye out for scammers and protect yourself. Don’t click any sketchy links, watch out for requests asking for money or personal info, and steer clear of promises that sound too good to be true.

How to Identify Romance Scams

There are several red flags to watch out for that may indicate that someone is trying out a romance scam on you because they:

Quickly profess their love or overly flatter you, despite not having met you in person
Ask for money, gifts, a wire transfer, any form of financial assistance or personal information early in the relationship.
Have a vague, inconsistent or obviously fake profile or refuse to share more details about themselves.
Use poor grammar or spelling or have a different writing style than their photos suggest.
Avoid video calls or in-person meetings or make excuses for not being able to meet.
Claim to be in a foreign country, working on a project, or experiencing a sudden crisis.
Pressure you to make decisions quickly or keep the relationship secret from your family or friends.

It is important to be cautious when interacting with people online and to pay attention to any red flags that may indicate a romance scam is taking place. Do not send money to anyone you haven’t met in person. Do a reverse image search on their profile picture to check if it is a stock photo.

Romance fraud or any other kind of online fraud can be difficult to detect because scammers are skilled at manipulating their victims’ feelings and expectations.

The lies romance scammers tell: Common lies and stories

It is important to be aware of potential signs of romance scams. Signs of a potential scammer include:

expressing strong feelings for someone they have never met;
asking for money or gifts by way of bank transfers, gift cards or cryptocurrency;
being vague or inconsistent with their profile;
having poor grammar or spelling in their messages; avoiding video calls or meetings;
claiming to be in a foreign country; and
pushing for decisions to be made quickly or secretly.

It is essential to be watchful when engaging with individuals on the internet and be aware of any signs that may suggest a romance or any other type of scam. Under no circumstances should you provide money to someone you have not encountered face-to-face. Utilize a reverse image search for the individual’s profile picture to ascertain if it is a stock image.

Always be on guard. Online fraud, particularly romance fraud, can be challenging to identify due to the expertise of scammers in exploiting victims’ emotions and expectations.

Real-life stories of people who have fallen victim to romance scams

Here are some real-life stories of people who have been victims of romance scams:

Mary (not her real name) is one of the many people in the UK who has fallen victim to a catfishing scam. She lives in the Midlands, earns £9.50 an hour, and rents a two-bedroom house. After meeting a man on a dating website, she believed that they were in a serious relationship, but it turned out that he was a scammer who stole her money and left her struggling to pay her rent.
A victim who shared their story on romancescamsurvivor.org reported being scammed out of $15,000. The scammer sent them a photo of a contract claiming they were going to be paid $15 million for building a bridge, but then claimed their wallet had been stolen and asked the victim for money to pay for their hotel and food.

Just the facts: What the Federal Bureau of Investigation says about romance scams

In 2022, an estimated 72,806 people in the United States became victims of romance scams, resulting in losses totalling over $1 billion for the first time. This data was collected from the Internet Crime Complaint Center, the Federal Trade Commission, the Better Business Bureau and the American Association of Retired Persons. Many of the scammers persuaded their unsuspecting victims to send them cryptocurrency.

Gift cards were the most commonly reported payment method used by romance scammers in 2022, accounting for 24% of reported losses. Although not the most expensive payment method, it is still important to be aware of their potential use by scammers.

Uncovering the reality of romance scams: What the RCMP has to say

According to the Canadian Anti-Fraud Centre, in 2022 losses to romance scams ranked as the second-highest source of financial fraud-related losses, totalling over $59 million. Of this amount, victims in Ontario accounted for more than $20 million. Investment scams were the only type of fraud that was more lucrative for perpetrators.

It is important to note that the actual number of romance scam victims is likely higher than reported, as many do not report the crime or share it with their loved ones due to feeling ashamed, fearful, and even in denial about what has happened.

How to protect yourself from romance fraud

Romance scams can be devastating for individuals and families, necessitating caution when engaging with people online. Signs of potential scams include requests for money, refusal to video chat, or insistence on meeting in person. Should you or those you know have been victims of such scams, it is important to report to the authorities and seek help from trustworthy sources such as family, friends, or professionals.

Protecting yourself from romance scams essentially means recognizing the scam signals discussed above and not falling for them, notwithstanding as persuasive and enticing as they may be. If it is too good to be true, then it is.

Romance fraud can happen to anyone, but there are some things you can do to reduce your risk:

Use reputable online dating sites or online dating apps only that have strong privacy and security policies.
Be cautious when sharing personal information, such as your full name, address, phone number, or financial details.
Never send money or gifts to someone you haven’t met in person, especially if they claim to be in a foreign country or in a crisis situation.
Do some background checks and verify the person’s identity and story before investing time, emotions, or money.
Be wary of sudden or excessive expressions of love, flattery, or promises, as these may be signs of a scammer.
Talk to your family or friends about your online relationships and ask for their opinions or advice.
Report any suspicious or fraudulent activities to the police, the Canadian Anti-Fraud Centre, or the website or app where you met the person.

Romance scams: Strategies for protecting your personal and financial information online

In this digital age, it is critical to take the necessary steps to secure your personal and financial information online. Unfortunately, cybercriminals are constantly looking for chances to access your confidential data for malicious purposes. Fortunately, there are multiple methods you can employ to safeguard your confidential data while using the internet.

Take extra care when it comes to the personal data you share on social media sites. Things like your date of birth and location can be used by cybercriminals for identity theft and fraud, so be aware of the potential risk. To stay safe from cyber threats, make sure your software and operating system are always up to date. This will ensure that the latest security patches are installed. Additionally, install anti-virus, anti-malware and anti-spyware programs on all your devices in order to stop cybercriminals from accessing the system remotely and putting in files that can steal your data.

It’s essential to protect your personal and financial information from malicious online activities. To do so, reduce the number of online accounts you hold and delete any unused mobile apps or browser extensions. Additionally, make sure all devices are secured with a strong, original password or PIN – one that you don’t use anywhere else. Following these steps can help to minimize the risk of a security breach.

Romance scams: Conclusion

I hope this romance scams Brandon’s Blog has been an eye-opener for you. This information is really about any online fraud, not just romance scams. Have you been scammed out of money and are now facing financial hardship?

Revenue and cash flow shortages are critical issues facing entrepreneurs and their companies and businesses. Are you now worried about just how you or your business are going to survive? Those concerns are obviously on your mind. Coming out of the pandemic, we are now worried about its economic effects of inflation and a potential recession.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

We understand that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Our mission includes helping you know how to increase credit score with our free online course

Explanation of maxed-out credit: Know how to increase credit score

Importance of improving credit score: Know how to increase credit score

Description of what a credit score is, how it is determined and then how to increase credit score

Importance of knowing your credit score and how to increase credit score

Knowing how to obtain your free credit report is the 1st step in how to increase credit score

Common credit score issues that create lower credit scores: How to increase credit score

“Hard hits” versus “soft hits”: Know how to increase credit score

What are hard inquiries on your credit report?

What are soft inquiries on your credit report?

13 tips on how to address these issues and how to increase credit score in Canada

Assessing your debt situation

Creating a budget plan

Contacting your creditors

Explore debt consolidation

Reduce credit utilization

Pay your bills on time

Use Your Credit Responsibly

Monitor Your Credit Report

Limit New Credit Applications

Developing a Strong Credit Profile

Explore professional credit counselling

Speak to a licensed insolvency trustee

Watch the video at the top of this Brandon’s Blog

Conclusion: How to increase credit score

Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) (BIA): Introduction

Overview of BIA Section 215

BIA: The Motion Judge’s Decision

The BIA case background

Did the undischarged bankrupt have the right to launch the Action under the BIA?

The Court of Appeal for Ontario’s analysis

The Court of Appeal for Ontario’s decision

BIA: Conclusion

Interest rates: Introduction

Interest rates: Background information on predatory loans

Explanation of the Federal Government’s decision to cut interest rates on predatory loans

Interest rates: Common characteristics of predatory loans

The Federal Government’s decision to cut interest rates on predatory loans

Interest rates: Criticism of the government plan

Benefits of cutting interest rates on predatory loans

Interest rates: Criticisms of the decision

Benefits of cutting interest rates on predatory loans

Interest rates: Conclusion

Construction Act, R.S.O. 1990, c. C.30: Introduction

What is the Ontario Construction Act?

What is a construction lien under the Construction Act?

Definition and criteria for awarding licensed insolency trustee fees in a Canadian bankruptcy

Different types of licensed insolvency trustee fees in a Canadian bankruptcy

Importance of paying attention to bankruptcy trustee fees

Golfside Ventures Ltd (Re), 2023 ABKB 86 (CanLII): Recent legal decision How priority was assigned between Construction Act lien and Bankruptcy Trustee Fees

Background of the case

Court’s ruling and reasoning

Construction Act: Impact of the decision on businesses, contractors and owners

Construction Act: Conclusion

What is a Canadian tax refund?

5 surprising things you can do with your Canadian tax refund

1. Utilizing your Canadian tax refund to plan for your retirement is a wise decision.

2. Donate to a charity or a cause you care about

3. Pay off high-interest debt

4. Take a course or learn a new skill

5. Start or add to your emergency fund

Canadian tax refund conclusion

Canadian credit card debt: Introduction

Canadian credit card debt: What is it and why could it be a problem?

The current state of Canadian credit card debt

Canadian credit card debt: Why do Canadians have so much credit card debt?

Canadian credit card debt: Common mistakes people make when it comes to credit card debt in Canada

Canadian credit card debt: How to tackle credit card debt in Canada

Canadian credit card debt: Conclusion

Silicon Valley Bank failure: The SVB collapse

Silicon Valley Bank failure: A brief history of Silicon Valley Bank

The Impact of Silicon Valley Bank’s failure on the Tech Industry: Here’s the latest on the banking crisis

Silicon Valley Bank failure: What led to the Silicon Valley Bank failure?

Silicon Valley Bank failure: Can Canadian banks fail?

Silicon Valley Bank failure: The Bank of Canada keeps Canada’s financial system healthy

Silicon Valley Bank failure: Precedents for bank failures in Canada

Silicon Valley Bank failure: What happens to deposits if a Canadian bank failed?

Silicon Valley Bank failure: 5 ways Canadians can prepare for bank failure

Silicon Valley Bank failure: Conclusion

Frugal lifestyle: Introduction