Tag: Bankruptcy and Insolvency Act

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NON-COMPETE CLAUSE; DON’T IGNORE IT

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Courtesy of RocketLawyer.com

Ignoring a non-compete clause can be very tempting, especially if you left your employer feeling that you weren’t given proper notice or that you were owed wages or commissions. Don’t let this type of situation cloud your better judgement because ignoring an enforceable non-compete clause can be very costly. Even bankruptcy won’t discharge you of this debt.

Recently there was an action that demonstrates clearly why not to ignore a non-compete clause. An employer terminated its agreement with one of its associates. Although a non-compete clause was in place, the associate chose to ignore it and continued doing business with several of his former boss’s customers or former customers. The employer brought action against his former associate to recover losses allegedly sustained as a result of the former associate ignoring the non-compete clause in his contract and therefore breaching his agreement with his former employer.

The claim under the judgement the employer obtained against the former associate for loss of profits was not discharged by the former associate’s bankruptcy, given that it was ruled to be a debt incurred for breach of fiduciary duty, which is a type of debt not discharged under section 178(1) of the Bankruptcy and Insolvency Act (Canada).

Don’t let your emotions cloud your better judgement. Even if you think your former employer owes you wages, ignoring an enforceable non-compete clause is not the answer. As you can see by this action, whether you leave an employer voluntarily or otherwise, if there is an enforceable non-compete clause in place, and you take customers away from your former employer during the non-compete period, not only can they obtain a judgement for the lost profits, bankruptcy also won’t discharge you of that debt.

For more information on this or any issue related to insolvency or bankruptcy contact Ira Smith Trustee & Receiver Inc. We’re an insolvency and financial restructuring practice for individuals and companies in the Greater Toronto Area (GTA) facing financial crisis. Our speciality is serving individuals and the private company entrepreneurial market, regardless of size. If you’re experiencing financial difficulties, we can help you recover financially Starting Over, Starting Now.

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BANKRUPTCY TRUSTEES ADVISE BANKRUPTCY IS A FINANCIAL TOOL

bankruptcy trustees, financial distress, financial tool, bankruptcy, too much debt, collection letters, collection calls, bankruptcy alternatives, personal bankruptcy, Bankruptcy and Insolvency Act, bankruptcy legislation, corporate bankruptcy, bankruptcy protection, Air Canada bankruptcy, American Airlines bankruptcy, consumer proposal, starting over starting now, bankruptcy trusteeBankruptcy trustees advise people in financial distress to think of bankruptcy as just another financial tool. Bankruptcy still carries a stigma with it for many people, but if you have too much debt, cannot repay your debts and are afraid to open the mail or answer the phone because of all the collection letters and collection calls you receive, you need to take some positive step to eliminate this stress in your life by finding a responsible and realistic solution.

Bankruptcy trustees will tell you that none of their clients wanted to call and for sure did not wish to see them. People come to bankruptcy trustees feeling ashamed, guilty and worthless. It is normal to feel that you have failed in such circumstances, but it is also important for your emotional and financial well-being to think of bankruptcy or one of the various bankruptcy alternatives as another financial tool and to use one of these tools to fix the situation for yourself.

Our media promotes the feeling that personal bankruptcy is somehow equated with failure, instead of it being described as merely a negative financial outcome for the honest, but unfortunate person. Everyone deserves a second chance, and using bankruptcy, or one of the bankruptcy alternatives is a way to get that second chance. Many people have done so in the past, and many will do so in the future; that is why Parliament created the laws forming our bankruptcy legislation, the Bankruptcy and Insolvency Act. Keep in mind, many famous people have previously filed for bankruptcy.

It is interesting that our media casts personal bankruptcy in a negative light, but shows corporate bankruptcy protection as something positive. When we heard years ago about Air Canada filing for bankruptcy protection, or more recently, American Airlines filing for bankruptcy, people did not stop flying the airlines because they were disgusted that a company would dare to make use of the bankruptcy financial tool, but rather, people were worried about whether or not they would lose any of their airline point privileges!

Why can’t we think of personal bankruptcy as the same positive step forward financial tool in dealing with an unfortunate situation?

Bankruptcy trustees are the people licensed by the Government of Canada to administer the provisions of the Bankruptcy and Insolvency Act. Bankruptcy trustees need to obtain a full understanding of your assets and liabilities and understand your personal situation in order to advise whether you should go bankrupt, or if you are a candidate for a consumer proposal instead. No doubt people seeking the assistance of bankruptcy trustees have many questions needing to be answered also.

Are you suffering financially for any reason? Don’t be ashamed; contact Ira Smith Trustee & Receiver Inc. Debt won’t go away on its own. You need professional help Starting Over, Starting Now so that you can regain your dignity and resume on a path to debt free living.

Watch this 5 minute video to listen to how another bankruptcy trustee explains it.

http://youtu.be/GCcCHJl1V44

 

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OWED WAGES BY EMPLOYER? FIND OUT IF YOU QUALIFY TO GET PAID

accrued vacation pay wage earner protection program, owed wages by employer, starting over starting now, avoid bankruptcy, licensed trustee, trustee, Service Canada, receivership, bankruptcy, notice of intention to make a proposal, Division I Proposal, Companies’ Creditors Arrangement Act, WEPPA, bankrupt, wages, Bankruptcy and Insolvency Act, BIADo you believe you wages are owing to by your employer? People ask us what if my employer owes me money & goes into either receivership or bankruptcy.

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

Are there any exceptions to this? What are the rules?

There are a few exceptions. You are generally not eligible if, during the period for which you wages are owed to you by your employer, you:

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

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

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

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

Claim limits

Regardless of the total amount owing to you, the maximum any employee can receive under WEPPA is the greater of $3,200 or four times the maximum weekly insurable earnings under the Employment Insurance Act (which is now greater than $3,200). Once employees file claims with both the Trustee and Service Canada, Service Canada pays their claims for owed wages by employer and Service Canada becomes the creditor. The amendment to the BIA has recognized WEPPA and created a priority charge that supersedes all secured charges except CRA’s deemed trust claim (and the reclaiming rights of farmers and suppliers) to a max of $2,000 per employee, secured against current assets.

Documentation

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

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

If you are experiencing financial problems, contact Ira Smith Trustee & Receiver Inc. We are a licensed trustee and will listen to your issues and offer compassionate, professional assistance to aid you to avoid bankruptcy, so that you can regain control of your life, Starting Over, Starting Now.

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RECEIVERSHIP IN BANKRUPTCY – WHAT DOES THAT MEAN?

receivership in bankruptcyFor those looking at insolvency, you may have heard the phrase –receivership in bankruptcy – and wondered what it meant. This phrase is both inaccurate, and in the area of the Canadian insolvency process, yet still possible. Are you confused yet? What is the source of the confusion? Most likely, people confuse the job of a licensed insolvency trustee with the job of a receiver. This is because one of the functions of a licensed trustee is to take possession of the assets of the bankrupt person or company, sell those assets, receive the money and then distribute the money to the creditors as prescribed in the Bankruptcy and Insolvency Act (Canada) (BIA).

In this situation, the trustee is receiving funds, but in no way is regarded as a receiver in any legal way. What does a licensed bankruptcy trustee do? In Toronto, and all of Canada, a bankruptcy trustee is licensed by the Federal government and works on behalf of all the unsecured creditors; this is the case even though the individual or company is the one who chose the licensed trustee prior to assigning itself into bankruptcy. Creditors have rights and are entitled to get their portion of the money owed to them when it is possible from the licensed trustee administering the bankruptcy. But in corporate insolvency, there is no term called receivership in bankruptcy.

For an individual, a licensed trustee can also help the person look at bankruptcy alternatives, such as debt consolidation, credit counselling and consumer proposals to deal with creditors and avoid bankruptcy. Consumer proposals reduce and reorganize an individual’s debt and if accepted, the successful consumer proposal helps the person recover from their debt and not do as much damage to their credit score. What is a receivership?

Receivership is a process that is available to lenders or other secured creditors only (as opposed to bankruptcy which is a remedy for unsecured creditors) to seize the assets of the company subject to the lender’s security through the appointment of a receiver. The receiver, who also must be a licensed trustee, will determine if the highest recovery can be gained from running the company or shutting it down, all while devising and implementing a plan to sell the assets. This is done in order to recover the greatest amount of money possible under the circumstances for the lender who appointed the receiver.

So how can there be a receivership in bankruptcy? As described in this blog, receivership is a remedy for secured creditors, while BIA proceedings, other than receivership, are a remedy to benefit the unsecured creditors. In some cases, it is necessary to have a bankruptcy administration, at the same time there is a receivership. The reasons why are much too complex for the purposes of this blog, but now you know, that although the phrase is inaccurate, it is still possible.

Receivership in bankruptcy summary

Before receivership or bankruptcy becomes your only option, there are alternatives including credit counselling, debt consolidation, and consumer proposals. Contact us today. The team at Ira Smith Trustee & Receiver Inc. will work with you to ensure that Starting Over, Starting Now you can regain financial health.

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NEGOTIATING DEBT VS BANKRUPTCY

negotiating debt vs bankruptcy, bankruptcy, bankruptcy faqs, debt, trustee, professional trustee, licensed trustee, debt settlement companies, financial plan, consumer proposals, consumer bankruptcies, bankruptcy alternatives, alternatives to bankruptcy, credit counselling, debt consolidation, Bankruptcy and Insolvency Act, BIA, Office of the Superintendent of Bankruptcy CanadaNegotiating debt vs bankruptcy. Of course you would not pick bankruptcy as your first choice. If you are considering the options of negotiating debt vs bankruptcy, you must be mired in serious financial difficulty and have few options available to you.

You need the help of a professional, licensed trustee now! Don’t be seduced by the bogus claims of debt settlement companies who promise to negotiate with your creditors for pennies on the dollar and get you out of debt in no time flat. Although you are being bombarded with messages like this on radio, television and online, don’t fall prey to these scam artists.

Debt settlement companies have already been banned in the United States and now several Canadian provinces have introduced strict regulations in the debt settlement industry. A professional trustee will evaluate your individual situation fairly and in an even-handed manner, and present you with a solid financial plan for moving forward and getting out of debt, including all of the advantages and disadvantages of negotiating debt vs bankruptcy.

According to the Office of the Superintendent of Bankruptcy Canada, consumers continue to opt in large numbers for negotiating debt vs bankruptcy.

What are the alternatives to bankruptcy? There are 3 Formal Bankruptcy Alternatives:

  1. Credit Counselling
    Credit counselling is in reality debt counselling. Professionals provide assistance with a host of issues related to debt including budgeting, finding debt solutions, working with your creditors and rebuilding credit.
  2. Debt Consolidation
    Debt consolidation is a single loan that allows you to repay your debts to several or all of your creditors at once, leaving you with only one outstanding loan.
  3. Consumer Proposals
    Consumer proposals are formal offers made to your creditors under the Bankruptcy and Insolvency Act (BIA) to modify your payments. e.g. paying a lesser amount each month for a longer period of time and paying a total lesser amount than you owe. In a consumer proposal you are choosing not to go bankrupt so this is actually negotiating debt vs bankruptcy.

Ira Smith Trustee & Receiver Inc. is a professional, licensed trustee who can help you get back on the road to financial health Starting Over, Starting Now. A licensed trustee can properly advise you on negotiating debt vs bankruptcy. If you wish to do some self-study, please review our bankruptcy FAQS. But don’t delay. Contact us today.

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BANKRUPTCY TRUSTEE TORONTO: HELPING YOU STARTING OVER, STARTING NOW

living paycheque to paycheque, alternatives to bankruptcy, bankruptcy, bankruptcy alternatives, Bankruptcy and Insolvency Act, bankruptcy faqs, bankruptcy process, bankruptcy trustee in toronto, bankruptcy trustee toronto, collection agencies, credit, credit counselling, credit score, consumer proposal, debt consolidation, rebuild your credit, starting over starting now, wages, bankruptcy trustee torontoA bankruptcy trustee Toronto understands that insolvency and filing for bankruptcy can be a very distressing time in someone’s life. Many people feel like failures at this time and need to have someone to whom they can turn to help them understand their options. People filing for bankruptcy can choose a federally regulated bankruptcy trustee Toronto they feel the most comfortable with to assist them in the process.

When Bankruptcy Becomes Necessary

When a person becomes insolvent, they cannot pay back what they owe to their creditors; in fact, what they owe may far outweigh the assets that they have. At this point, an individual may consider declaring bankruptcy. There are several clues, such as the following, that indicate that one is nearing this point of no return and should consult with a bankruptcy trustee Toronto:

▪ Garnished wages from each paycheque

▪ Contact from one or more collection agencies

▪ Utilities or household services that have been stopped from lack of payment

▪ You can no longer make ends meet living paycheque to paycheque

Bankruptcy and Its Benefits

Although it should be noted that bankruptcy is not the perfect solution for everyone because it will be quite costly and destructive to one’s credit score, it does have several advantages. Of course, there will be no more harassment from creditors or collection agencies during and following the bankruptcy process, and the person involved will be able to feel a greater peace of mind. In addition, many times people are allowed to keep their homes and property during bankruptcy. Finally, employers cannot discriminate against individuals who file for bankruptcy.

What a Bankruptcy Trustee Toronto Does

Anyone filing for bankruptcy in the GTA can choose the bankruptcy trustee Toronto they feel the most comfortable with to assist them. A bankruptcy trustee Toronto has numerous tasks. In general, the trustee is an impartial intermediary who will make sure that every part of the process is performed correctly, that there is no fraud and that assets are liquidated appropriately. Before the actual bankruptcy filing, he or she will meet with the person to review the individual’s situation, consider all alternatives to bankruptcy, including credit counselling, debt consolidation and consumer proposals.

After this initial assessment, if bankruptcy is the best option, the federally regulated bankruptcy trustee will explain the bankruptcy process to you, prepare and look over any paperwork before it is filed, if necessary will hold a meeting of creditors for the individual and will ensure that creditors are paid their pro rata share in accordance with the provisions of the Bankruptcy and Insolvency Act.

Some people fear that a bankruptcy trustee Toronto will make their lives miserable each step of the way. However, although the trustee may have some difficult and painful tasks to fulfill, they will ensure that each step of the process is performed thoroughly, accurately and with complete professionalism. Those people who are in a position to benefit from declaring bankruptcy will find the work of a trustee to be invaluable and allow you after your discharge from bankruptcy to rebuild your credit.

Bankruptcy Trustee Toronto

If you feel you are a candidate for bankruptcy, you can first do some self-study by reviewing our bankruptcy faqs. After reviewing the bankruptcy alternatives, if the best solution for you is bankruptcy, you should feel comfortable that your choice of trustee will treat you with the compassion and respect you deserve. Contact Ira Smith Trustee & Receiver Inc. and Starting Over Starting Now you’ll be on your way to living a debt free life.

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407 ETR FAIRNESS-ONTARIO COURT OF APPEAL ENSURES 407 ETR FRESH START

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407 ETR407 ETR found out that bankruptcy law is complicated. It not only deals with the facts, but with the spirit of the law. Canada (Superintendent of Bankruptcy) v. 407 ETR Concession Company Limited, 2013 ONCA 769 (Bankruptcy and Insolvency Act CanLII) is a very interesting case.

It involves Matthew David Moore, a truck driver who owned two vehicles and was a frequent user of this toll highway. Mr. Moore owed the money for usage of the toll Highway which he failed to pay. In March 2005 and December 2006, 407ETR sent notices of his non-payment relating to two separate vehicles to the Registrar of Motor Vehicles for the Province of Ontario (the “Registrar”). As a result, when the vehicle permit for one of the vehicles expired in August 2005, it could not be renewed. However, Mr. Moore continued to use Highway 407 for another 18 months and as of October 2007, he owed $34,977.06.

In November 2007 Mr. Moore made an assignment into bankruptcy. The 407ETR was listed as a creditor but it did not file a proof of claim which would have enabled the 407ETR to make submissions at any hearing into Moore’s discharge from bankruptcy and to share rateably with Moore’s other unsecured creditors in the bankruptcy. After declaring bankruptcy Mr. Moore had an accident and retrained to become a car salesman, which is what he now does for a living. He gave evidence that he needs a vehicle permit in order to do his job and earn a living. In February 2011 Mr. Moore obtained a conditional discharge from bankruptcy. He requested an Ontario Ministry of Transportation (“MTO”) vehicle permit but the MTO refused his request due to his outstanding indebtedness to this Highway concession company. On June 21, 2011, Mr. Moore obtained an absolute discharge from bankruptcy. Even though he was discharged from bankruptcy, the MTO refused to issue Mr. Moore a vehicle permit. The alleged conflict, in this case, is between s. 178(2) of the BIA, which releases the discharged bankrupt from most claims, and s. 22(4) of the 407 Act, which permits 407ETR to initiate a process by which the debtor will be denied a vehicle permit until he or she discharges the debt to 407ETR. A lot of legal wrangling ensued and eventually, this matter went to appeal. The issues on appeal were:

(i) Does s. 22(4) of the 407 Act conflict with the operation of s. 178 (2) of the BIA?

(ii) Does s. 22(4) of the 407 Act conflict with the purpose of the bankruptcy and insolvency system because it (a) thwarts the objective of providing the bankrupt with a fresh start or (b) creates a new class of debt that survives bankruptcy and frustrates Parliament’s intention to treat all unsecured creditors equally?

What was the 407 etr ruling?

“For these reasons, I would allow the appeal and, as requested by the appellant, set aside the order of the motions judge. In its place, I would substitute an order that:

(1) the discharge of Moore dated June 21, 2011, released him from all claims provable in bankruptcy, including the toll highway debt as at November 10, 2007, and

(2) the Ministry of Transportation is hereby directed to issue license plates to Moore upon payment of the usual licensing fees.

Further, I would declare that s. 22(4) of the 407 Act is inoperative to the extent that it thwarts the purpose of providing a discharged bankrupt with a fresh start.”

This decision ensured that bankruptcy did provide Mr. Moore with a fresh start. If you are experiencing serious financial problems and are looking for a fresh start, contact Ira Smith Trustee & Receiver Inc. today. You can even do some self-study with our bankruptcy faqs. Upon review of your situation, we will provide you with a solid plan for moving forward. Starting Over, Starting Now you can get your life back on track and live a happy and productive life.

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PARK LANE CIRCLE-PEOPLE WHO LIVE IN GLASS HOUSES CAN’T CHANGE THE RULES

40 Park Lane Circle, a mansion located in Toronto, was for sale in a proposed auction and has become quite the source of notoriety these days, although nothing and no one can rival Mayor Rob Ford in the headline grabbing department. Pictured below, it’s being referred to as the Bridle Path’s own Palace of Versailles. Located at 40 Park Lane Circle, it was most recently listed for$13.98 million.

PEOPLE WHO LIVE IN GLASS HOUSES CAN’T CHANGE THE RULES TO SUIT THEM-40 PARK LANE CIRCLE

40 Park Lane Circle, Toronto

COURTESY: CONCIERGE AUCTIONS

In the 40 Park Lane Circle case at hand (which our Firm was not involved in), the Receiver two months earlier made application to Court and obtained Court approval to conduct an auction of the main asset, a luxury home worth millions of dollars at 40 Park Lane Circle which is in a very fancy neighbourhood of Toronto. After the fact the Receiver was presented with an offer for the Property from a set of purchasers. Unfortunately the Receiver’s report did not explain how the offer came about, specifically whether the offerors were aware of the Court-approved auction process at the time they made the offer. The Receiver made a motion to discontinue an auction sale process and approve an offer to purchase the 40 Park Lane Circle real property. After the recent decision of the Honourable Mr. Justice Brown of the Ontario Superior Court of Justice (Commercial List) in HSBC Bank Canada v. Mahvash Lechcier-Kimel, 2013 ONSC 7241, the Receiver’s motion was denied and the auction was allowed to proceed. According to the latest reports the bidding is now closed and the sale is pending.

As Court Officers, we live in glass houses. Every action we take is on display for all to see. All stakeholders to the process are watching how we conduct the administration, and invariably, a party who thought they should be obtaining a better result for themselves will not be satisfied. Accordingly, the sales process has to be seen to be fair, even handed and transparent. The case of 40 Park Lane Circle is very interesting as it highlights that a fair, open and transparent marketing process in accordance with the seminal “Soundair” case is more important in the eyes of the Court, than what might be thought of as the highest potential offer.

What is the “Soundair” case and why is it so important? The criteria to be applied when considering the approval of a sale recommended by a receiver were first set out by the Ontario Court of Appeal in Royal Bank vs Soundair Corp. and hence referred to as the “Soundair principles” which are used when deciding whether a receiver who wishes Court approval to sell a property has acted properly, a Court is to consider and determine:

a) whether the receiver has made a sufficient effort to get the best price and has not acted improvidently;

b) the interests of all parties;

c) the efficacy and integrity of the process by which offers were obtained; and

d) whether there has been unfairness in the working out of the process.

As Trustees & Receivers, we are often asked when selling an individual’s or a corporation’s assets in a Court supervised administration, why can’t the Receiver or Trustee deviate from the Court approved process, or why can’t the Receiver or Trustee share with the party paying the costs of the administration the appraisal information. The answer, which we have always known to be the case, is that the Court and its Officer, be it a Receiver or Trustee, must ensure the integrity of the sales process. By the decision of the Court, the 40 Park Lane Circle property sale is no different.

Our firm has been involved in numerous cases where assets were sold in a Court supervised process. Ira Smith Trustee & Receiver Inc. is a full service insolvency and financial restructuring practice serving companies and individuals throughout the Greater Toronto Area (GTA) facing financial crisis or bankruptcy that need a plan for Starting Over, Starting Now. We pride ourselves on our openness, transparency and maintaining the integrity of the process. Contact us today.

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FINANCIAL ADVICE THAT YOU SHOULD NEVER FOLLOW

bankruptcy, bankruptcy and insolvency act, credit history, credit rating, credit report, financial advice, insolvency, rebuilding credit, restructuring, student debt, toronto bankruptcy, trustee, vaughan bankruptcy, what is a consumer proposal, what is bankruptcy,woodbridge bankruptcyPeople mean well and many can’t resist giving advice, but when it comes to financial matters ONLY take financial advice from a qualified professional. Here are some classic examples of financial advice that you should never follow.

  • Don’t declare bankruptcy because it will ruin your credit rating. While it’s true that bankruptcy remains on your credit report for quite a while, if you aren’t paying your credit cards and other loans on time, your credit rating is probably already shot. With an insolvency process, we can provide you with easy ways to start rebuilding your credit fast. Without such a process, you will never get out from under your debt and won’t be able to rebuild your credit rating.
  • Credit cards will get you into trouble. Credit cards won’t get you into trouble if you charge only what you can afford to pay off. In fact, credit cards can help you to establish a credit history which future lenders will use when you want to take out a loan or a mortgage. Without a credit history you may find it very difficult to borrow money.
  • A house is always a great investment. Houses are not immune from market fluctuations. The prices of real estate are tied to changing demographics, interest rate spikes and the economy. There is no guarantee that your house will have increased in value at the point in time when you need to sell. Depending on the state of the real estate market when you purchase a home, there is always a possibility that your home may not increase in value and may even decrease in value from time to time, so don’t purchase the house because you need the increased value to be liquid on a specific date.
  • You can live for free if you buy an investment property and rent it out. Television shows on the Home & Garden channel have gone to perpetuate this bad advice. It’s not as easy as it seems on a one hour TV show and it’s a difficult and potentially financially hazardous route to take. Renovations almost always go over budget, so count on spending more than you planned on. Not every tenant is a jewel. Some are extremely difficult and can cost you a lot of time and money. Once you become a landlord you will have to manage your property. You just don’t find a tenant and expect that the property will manage itself. Expect to be called whenever something is not perfect and your tenant will expect immediate action. Be prepared for unexpected expenses.
  • Asking all your friends where can I get a loan with bad credit in Toronto. The lenders that would lend money to someone with debt problems and bad credit already charge extremely high upfront fees, very high interest rates and usually, you will never be able to pay off the loan and perhaps you will even fall behind on interest payments. The collection efforts of these types of lenders are not subtle or pleasant.
  • Student debt is good debt. Debt is debt, and borrowing more than you can repay is never a good idea. The Canadian Federation of Students estimates that average student debt is almost $28,000. According to the Canada Student Loan Program, most students take 10 years to pay off their loans. Does this sound like a good idea? We are certainly not advocating that students don’t pursue post secondary education, but keep the debt to a minimum by going to a more affordable college or university. Work part time during the school terms and full time during vacations.

When you need financial advice seek out a professional. Taking bad advice can be costly. If you are experiencing serious debt issues contact a trustee for advice. Ira Smith Trustee & Receiver Inc. is a full service insolvency and financial restructuring practice serving companies and individuals throughout the Greater Toronto Area (GTA) facing financial crisis or bankruptcy that need a plan for Starting Over, Starting Now. We will give you sound financial advice that you can count on.

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THE 10 MOST COMMON CREDIT SCORE MISTAKES

canadian credit score calculator, credit score, credit scores, credit score mistakes, credit report, credit problems, credit history, bad credit, bankruptcy and insolvency act, bankruptcy alternatives, bankruptcy, consumer proposals, credit counselling, toronto bankruptcy, vaughan bankruptcy, trustee, woodbridge bankruptcy, what is bankruptcy, what is a consumer proposal, dave johnsonLast week we discussed how Your Credit Score Can Be Ruined Even If You Don’t Do Anything Wrong. This week we’ll be addressing The 10 Most Common Credit Score Mistakes.

What is a Credit Score? According to the Office of Consumer Affairs (OCA) “Your credit score is a judgment about your financial health, at a specific time. It indicates the risk you represent for lenders, compared with other consumers. Unfortunately, there is not an online Canadian credit score calculator tool.

There are many ways to work out credit scores. The credit reporting agencies Equifax and TransUnion use a scale from 300 to 900. High scores on this scale are good. The higher your score, the lower the risk for the lender. Lenders may also have their own ways of arriving at credit scores. In addition, lenders must decide on the lowest score you can have and still borrow money from them. They can also use your score to set the interest rate you will pay”.

What are the 10 Most Common Credit Score Mistakes?

1. Failing to check your credit report for errors: As we discussed in last week’s blog Your Credit Score Can Be Ruined Even If You Don’t Do Anything Wrong. Check your credit report at least annually. Mistakes on credit reports are more common than you may have imagined and you need to stay on top of the situation. If you do discover any errors, contact the credit bureau as soon as possible to correct the situation.

2. Not using your full legal name in financial documents: It’s possible that people with common names or similar sounding names could have their name attributed to a credit report that is not theirs, as was the case for Mr. Dave Johnson of Pembroke, Ontario. Use your full legal name on bank accounts, credit applications and other documents that become part of your credit history.

3. Paying your bills late and failing to make at least the minimum monthly payment: If you don’t pay at least the minimum amount due on time your creditors will eventually report your account as past due, which can damage your credit score. If there is a reason why you won’t be able to pay your bill on time, contact your creditor before your bill is due to work out an arrangement if possible.

4. Maxing out on your credit cards: If your credit cards are maxed out, potential creditors may question your ability to repay. If you are approved for a loan you may be charged a higher interest rate to compensate for what is viewed as a higher risk.

5. Not alerting creditors if you’ve moved: Your bill may arrive late and as a result your payments could be late, potentially damaging your credit score.

6. Registering for too many new credit cards: Consumers who often open new credit cards are viewed as a greater risk than those who don’t.

7. Closing older credit card accounts: Closing older credit card accounts shortens the length of your credit history and this can adversely affect your credit score.

8. Don’t co-sign for someone else’s loan: You could be liable for that person’s debt and damage your credit rating.

9. Don’t share your credit card or social insurance number with anyone: There are a lot of scams abound where people try by phone, email or mail to get your credit card or social insurance number. This can be a fast track to identity theft and financial disaster.

10. Ignoring the warning signs of credit problems: If you have trouble making the minimum payments on time and have maxed out all of your credit, you have serious debt problems.

Serious debt problems need professional help. Contact Ira Smith Trustee & Receiver Inc. and take the first step towards a healthy financial future. Starting Over, Starting Now a debt free life can be yours.

Call a Trustee Now!