Many Canadians are in a hole financially because of their spending habits and don’t realize it. When it hits them in the face, they need the best debt solutions. Many people can’t even afford to seek the help they need. But there is good news. The best fixes are the ones you can do yourself. The purpose of my blog is to describe to you steps you can take by yourself to solve your financial problems, as long as you catch it early enough. My blog will also help you turn any wasteful spending habits into wise spending habits.
Debt solutions: Disposable income
There’s a tendency to look at income as disposable – what we earn, we spend. If that’s your attitude, then you already have the shovel in your hands and you’ve started digging. Before you get in so deep that you can’t get out of the hole, let’s look at what you’re doing wrong and what you can do to get back on track financially.
Debt solutions: My 5 step self-help free plan
Stop spending everything you earn. Living paycheque to paycheque is no way to live. Your income should cover all of your expenses, fund an emergency account and allow you to save for retirement. Look at your budget and see what expenses you can end or reduce. Don’t have a budget?
Make a budget and stick to it. Do you know where your money’s going? Or do you think you have a hole in your wallet? A budget is the most effective money management tool. List all the things that you spend money on each month; and that includes designer coffees. In order to pay down debt and/or save money you’ll have to do some penny-pinching. Eliminate wasteful spending. Spend mindfully instead. Think twice before making a purchase you don’t really need. Make sure you’re getting the best prices on your cellphone plan, car insurance, house insurance, cable and internet. Use coupons at the grocery store. Make a budget and stick to it to meet your financial goals.
Get rid of credit card debt as quickly as possible. High interest debt is the worst kind of debt. Pay off your credit card balances as quickly as possible. Use cash instead. Plastic is too easy.
Check your credit score annually. Do you know what your credit score is? You should. Your credit score will decide whether you can buy a house, buy/lease a car and it can even affect your ability to get a job. Check it annually and go over it thoroughly. It may contain errors that can adversely affect your ability to borrow money.
Save for retirement. Retirement will come quicker than you think. Have you started saving? Government sponsored pension plans will not keep you in the lifestyle you imagined for your retirement. It’s never too early or too late to start saving for retirement.
Debt solutions: The most serious financial problems need professional help
If you try my free 5 step debt solutions plan but find you are in too deep and can’t dig out fast enough, then you do need professional help. Many people facing serious financial issues don’t know where to go for professional help or are too embarrassed. There’s no shame in seeking professional, financial help. A trustee in bankruptcy (now called a licensed insolvency trustee) will evaluate your situation and help you to arrive at the best possible solution for your problems.
Ira Smith Trustee & Receiver Inc. is here to help. We’re federally regulated and subject to a strict code of ethics. We offer a depth of expertise and provide a high quality and cost-effective service. I understand your pain and we can end it. You will find that we use a friendly, non-judgmental method.
A ruling in a proposed class action against a defunct Orlando Florida attorney firm, claimed a lawyer goes against government law “if he instructs a client to pay his bankruptcy related legal costs making use of a credit card.” That would also include using a credit card, either directly or through a third-party site, to pay bankruptcy fees online with a credit card.
Note to professionals encouraging clients considering bankruptcy: tell them to keep that plastic in their pocketbooks.
United States Court of Appeals for the Eleventh Circuit ruling
In a judgment likely to resonate with bankruptcy and debt settlement legal representatives, the United States Court of Appeals for the Eleventh Circuit ruled a lawyer violates government regulation “if he advises a customer to pay his bankruptcy-related legal charges using a credit card.” This of course would include an instruction to pay bankruptcy fees online.
Theopinion released March 30, 2018 reversed a lower courtdecision and renewed a Florida class action against shut downKaufman, Englett & Lynd filed by a previous client. TheOrlando Sentinel reported the firm dissolved in April 2016 after the suit was filed.
The panel found a lawyer who advised his client to “sustain more debt” by billing his lawful fees on a credit card contravenes of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
Yes, it is fraud
That individual would certainly be committing fraud, and so would the attorney. This is because they’re making a charge knowing they never ever plan to pay that credit card.
The problem was that Kaufman Englett violated the Bankruptcy Code that does not permit a debt relief firm– consisting of a law practice– to “advise an assisted person or prospective assisted person to incur more debt in contemplation of such person filing a case under this title or to pay an attorney or bankruptcy petition preparer a fee or charge for services performed as part of preparing for or representing a debtor in a case under this title.”
My Canadian view
I would suggest that the outcome in Canada would be as disastrous for both the bankrupt and the licensed insolvency trustee (bankruptcy trustee or trustee). However, that does not mean that a bankruptcy trustee cannot encourage online payments; just not those using a credit card. Before getting into my reasons why, let’s first explore the issue of online payments.
Online payment choices
I think it is important to first understand what the various online payment choices are. The report “Canadian Payment Methods and Trends: 2017” by Michael Tompkins, Research Lead, Research Unit, and Viktoria Galociova, Research Associate, Research Unit, Payments Canada. In their report, they review the various online payments:
online transfers include online e-wallet and electronic P2P transactions initiated through online services and providers, which are either prefunded or linked to deposit accounts at financial institutions (e.g., Interac e-Transfers, PayPal and Tilt); and
prepaid app store cards (or virtual cards)
Credit cards are the most used for online payments. But as you can see, there are ways of making online payments using cash.
You can but not by credit card
I submit that you can use an online payment method to pay for Canadian bankruptcy costs, just not by credit card. What this means is that you can transfer cash to your bankruptcy trustee (or consumer proposal administrator) using an online system.
Why not by credit card?
My view is that it would be unlawful to use a credit card for paying a bankruptcy fee in installments or in one payment. The more likely scenario would be paying it all at once just before filing.
My reasons are as follows:
Using a credit card to charge expenses or take cash advances against knowing that you are about to file for bankruptcy and will not repay it is fraud. Fraud of course is illegal. So the insolvent debtor, about to become a bankrupt, will be in trouble. Just like in the USA as cited by the Court that I mentioned at the start of this blog.
Likewise, any bankruptcy trustee who accepts payment by a credit card in the name of and from the insolvent debtor would be in trouble. The same trouble would befall the professional if he or she encouraged the insolvent debtor to take a cash advance against the credit card to pay bankruptcy fee online.
pay bankruptcy fees online
Here’s why:
It is against the rules of professional conduct of the Canadian Association of Insolvency and Restructuring Professionals (CAIRP). The rules need a member to maintain the good reputation of the profession and perform professional services with integrity.
The General Rules of the Bankruptcy and Insolvency Act (Canada) (BIA) requires that a bankruptcy trustee maintain the high standards of ethics that are central to the maintenance of public trust. It also requires that trustees shall not assist, advise or encourage any person to engage in any conduct that the trustees know, or ought to know, is illegal or dishonest, in respect of the bankruptcy and insolvency process.
What are the risks?
The risk for the trustee, of course, is serious – the loss of his or her license to practice. But what are the risks for the insolvent debtor?
For the undischarged bankrupt, in my view, the risks are twofold: (i) criminal; and (ii) civil. The criminal repercussions are obvious. The laying of one or more fraud charges would happen and the result would be a criminal conviction, jail time and a restitution order.
The credit card issuer would certainly oppose the bankrupt’s discharge. In the meantime, the credit card company would get a lifting of the stay of proceedings which protects an undischarged bankrupt from lawsuits, to start litigation to find that at least the debt incurred by the debtor to pay for the Canadian bankruptcy costs was a claim against the debtor for a debt not released by order of discharge. Sections178(1) (a) and (e) are the most likely section of the BIA that would be relied upon.
So the credit card issuer and the trustee (probably by now the substituted trustee!) must oppose the bankrupt’s discharge. I am certain that the oppositions would be successful. The most likely result would be that the Court would flat-out refuse to hear the bankrupt’s application. The result of this is complex and should be discussed in a separate blog. Suffice to say that the bankrupt will have a very hard time ever getting out of bankruptcy without making full restitution. Even then, I would expect the Court to only grant a discharge upon certain conditions being met.
In other words, it would be a disaster and a mess for both the trustee and the bankrupt. These are my reasons why I feel that to pay bankruptcy fee online using cash is fine, but not by a credit card.
Pay bankruptcy fees online: What about you?
Are you facing financial problems? TheIra Smith Team can develop a restructuring plan for you. Debt problems are stressful and confusing. But with our help, you can be just like Nikki Haley and say “I don’t get confused”!
The Ira Smith Trustee & Receiver Inc. Team understands the pain you are going through trying to stay alive and trying to support yourself and your family. We understand the pain and stress you are feeling thinking that you may just soon hit the wall.
Our debt settlement plan process can ease this stress. The Ira Smith Team has a great deal of experience in helping people avoid bankruptcy while resolving their debt problems. We understand your pain points.Call the Ira Smith Team today for your free consultation. We can end your pain and put you back on a healthy profitable path, Starting Over, Starting Now.
A bankruptcy discharge is when the bankrupt is released under Canadian bankruptcy law from his or her debts as part of the bankruptcy process. Some people think that it is the act of filing bankruptcy that releases the bankrupt from liability. This is not the case. It is the discharge from bankruptcy process that “discharges” the bankrupt’s debts.
We explain in this vlog the procedure when a bankrupt’s outright discharge is opposed. We discuss the top 8 things that the Bankruptcy Court will consider in determining just what outcome the bankrupt could expect.
The primary benefit of the bankruptcy process for the insolvent person
The bankruptcy discharge is among the primary benefits of relief under the Bankruptcy and Insolvency Act (Canada) (BIA). The discharge is vital to the bankruptcy process. Debtors, after bankruptcy, can wipe the slate clean and start over, which is a central principle under the BIA statute.
Not all debts may be released
A bankruptcy discharge offers the discharge of many unsecured debts. Credit card debts, personal income tax debt, unsecured personal loansand under certain conditions, some student loan debt are all dischargeable debts. Financial debts, which will not be discharged include:
support payments to a previous spouse or to children;
fines or financial charges imposed by the Court;
debts emerging from fraudulent behaviour;
student loans if fewer than seven years have passed considering that the bankrupt quit being a full or part-time student.
bankruptcy discharge
It can be opposed
An insolvent’s bankruptcy discharge application may be opposed by one or more unsecured creditors or the Licensed Insolvency Trustee (formerly called a bankruptcy trustee) (LIT). A creditor opposition is created when the creditor files the required notice of opposition, setting out the reasons for opposing.
This happens if the insolvent has not met all of his/her responsibilities under the BIA. Making full disclosure, attending the required two financial counselling sessions and making all necessary surplus income payments are all duties of the bankrupt that must be fulfilled if a discharge is to be considered.
It can also happen if the individual bankrupt has actually committed a bankruptcy offence. Those are acts listed in section 173 (1) of the BIA. In this case, there needs to be a bankruptcy discharge hearing in Court and the Court will after that evaluate the LIT or creditor opposition as well as give its decision on the discharge from personal bankruptcy.
Absolute discharge— The bankrupt is launched from the legal obligation to pay off financial obligations that existed on the day of bankruptcy, except for certain types of debt identified above.
Conditional discharge— The bankrupt must fulfill certain conditions, additional payments into the bankruptcy estate, to get an absolute discharge. Once all conditions have been fulfilled, an absolute discharge will certainly be granted.
Suspended discharge— An absolute discharge that will be granted at later on a specific date determined by the Court.
If there is no opposition to the discharge from bankruptcy of the bankrupt by a creditor or the LIT, then the LIT is able to provide an automatic discharge by issuing the appropriate certificate. There is no need for attendance in Court.
bankruptcy discharge
The opposition process
When a debtor’s bankruptcy discharge application is opposed by either an unsecured creditor or the LIT, the Trustee needs to secure a Court day. This will be for a Court hearing on the insolvent’s application for discharge. The LIT must then tell all creditors who have filed a proof of claim of the opposition. Details are also provided about the date, time as well as place of the Court hearing.
The Trustee needs to also file a report with the Court on the conduct of the bankrupt both prior to as well as after applying for bankruptcy. The report will as well give a summary of the financial results of the bankruptcy administration. If a creditor has opposed the bankrupt’s discharge, then that creditor likewise needed to send a notice of opposition.
Does the bankrupt need a lawyer on an opposed discharge?
When going to Court for his/her discharge application hearing, a bankrupt would be well advised to come with a skilled bankruptcy lawyer to represent his or her interests. Sometimes the discharge hearing is less formal than various other types of Court hearings.
However, the Court follows all the proper regulations of civil procedure. It is sometimes tough for nonprofessionals to put their best foot forward without an attorney’s aid.
The top 8 things the Bankruptcy Court will consider
The concerns the Court thought about, in determining what type of bankruptcy discharge certificate to issue, which is the same in all bankruptcy discharge hearings, were:
Do the conditions of the bankruptcy filing and the bankrupt’s conduct sustain an order discharging the Bankrupt’s unsecured debts?
The Court’s problem is to make sure that within a choice the policy purposes of the BIA are fulfilled. The bankruptcy, including the insolvent’s discharge, should act as a deterrence for the person not to duplicate the very same behaviour.
If the circumstances of the bankruptcy support an order discharging the bankrupt, what terms of discharge are proper under the distinct circumstances of the bankruptcy?
What were the conditions of the insolvent when the debts were sustained?
What efforts did the insolvent make to pay the creditors?
Did the bankrupt pay in respect of certain other debts but not all of them and particularly not the debt of the opposing creditor?
Exactly what are the insolvent’s monetary opportunities for the future?
Is there any other conduct or reality that needs to be factored into with the regard to discharge?
The Court will take lots of variables into account. The conduct, previous income, education and age of the bankrupt are all important factors. The Court will certainly likewise trust the Trustee’s report to Court on the bankrupt’s application for discharge. The Trustee’s report assists in determining facts about the conduct of the insolvent and his or her future prospects.
Prevention is always a consideration. It is however very important to remember that Courts tend to be extra conventional when dealing with older bankrupts. A more youthful bankrupt with years of income-making opportunities could be needed to make an extra significant repayment. Less respect is given to the instant ability to pay.
An older bankrupt with some surplus income but fewer working years might be needed to pay less surplus income obligations into the bankruptcy estate.
Bankruptcy discharge: Is my bankruptcy case over when I get a discharge?
You should by this point in my Brandon Blog realize that when you receive an absolute discharge from your bankruptcy, at that point, you are discharged from your unsecured debts.
A discharge shows that you have finished with your bankruptcy legal process and your personal liability for unsecured debts has ceased. It’s not a separate thing from bankruptcy; it happens either automatically or by an Order of the Court, as I have described above.
At that point, the LIT still has some duties to fulfill. They include:
if there is going to be a dividend paid to the creditors, making sure that all proofs of claim have been reviewed and allowed for dividend purposes;
resolve any uncertainties the LIT may have concerning certain filed bankruptcy claims, including the issuance of Notices of Disallowance if any;
preparing the bankruptcy administration Final Statement of Receipts and Disbursements;
getting approval from the Office of the Superintendent of Bankruptcy to the Final Statement
getting the Final Statement, including the LIT’s fee and disbursements, approved by the Court;
issuing the dividend bankruptcy payments, if any
getting the discharge of the LIT
It is then that your bankruptcy case is closed.
Bankruptcy discharge: Do you have too much debt and want to avoid bankruptcy?
Do you have too many debt obligations and debt paymentsand have no idea how to deal with them? Act before you find yourself in the throes of an emergency financial situation. Ira Smith Trustee & Receiver Inc. has assisted many Canadian businesses and people throughout the Greater Toronto Area (GTA) in dealing with debts that need a plan for Starting Over, Starting Now. Don’t postpone. Give us a call today. Financial problems can be solved while avoiding bankruptcy with timely activity as well as our excellent strategy tailored just for you.
The bankruptcy trustee in Vaughan: Why did we transform into a licensed insolvency trustee?
Similar to caterpillars turning into butterflies, this bankruptcy trustee in Vaughan went through a metamorphosis. The Office of the Superintendent of Bankruptcy officially changed the name “bankruptcy trustee” to “licensed insolvency trustee” (LIT). As of April 1, 2017, all licensed trustees must have fully transitioned to the use of the LIT designation.
The purpose of this blog is to offer an overview of the Canadian insolvency process. Think of it as a bankruptcy and insolvency lesson 101.
What is the purpose of the Bankruptcy and Insolvency Act
Among the primary functions of this insolvency process, it is to release the individual from specific financial debts. It is to give a straightforward honest but unfortunate debtor a “new beginning.”. The debtor has no responsibility for discharged financial obligations.
A discharge is available to personal bankrupts, not to corporations. Although a personal case typically causes a discharge of financial debts, the right to a discharge is not absolute. Some sorts of debts may not be released. Section 178(1) of the Bankruptcy and Insolvency Act (Canada) (“BIA”) sets out the types of debts that are not released by the discharge of the bankrupt. The kinds of debts that are not released are:
1. child support and alimony;
2. fraud or near fraud;
3. debts arising from Court orders.
Where can I do some of my research?
You must initially do some of your own research to get an idea of exactly what your choices are. One place to start is our website to learn about:
through bankruptcy by turning over their property to a licensed insolvency trustee to realize upon it for the general benefit of creditors.
Either way, the funds available for distribution to the creditors are paid out by the licensed insolvency trustee. It is according to the scheme of priority laid out in the BIA.
The Court will consider approving a repayment plan that will repay the approved part of the financial obligations in no more than 5 years. When you use the restructuring provisions of the BIA (Consumer Proposal or Division I Proposal), you need to have a payback strategy to show your creditors just how you are going to pay back your debts. A successful restructuring plan is an alternative to bankruptcy and will allow a person or company to avoid bankruptcy.
There are various rules and ways that must be followed. Your licensed insolvency trustee can go over all the issues with you and is there to aid you through the process.
How does it all work?
Canada’s insolvency legislation is designed for debtors experiencing financial problems who cannot pay their present financial obligations and don’t have enough cash flow to offer a restructuring plan to avoid bankruptcy. The aim is to get a release from their existing debts.
The premise of the BIA is that the individual must deliver all of his or her non-exempt assets to the licensed insolvency trustee. The trustee will sell them for distribution to the creditors. In return, other than for either secured debts or the class of debts not released by a discharge from bankruptcy discussed above, the person’s debts will be erased. The person will be able to maintain any type of property that is categorized as exempt under provincial regulations. In this way, a discharge allows the individual to return to society as discharged bankrupt. This allows the person to start all over again.
Your credit score
Filing in an insolvency process could impact your financial resources and credit score for years. You should very carefully weigh all your options before choosing the bankruptcy option. That is a discussion a licensed insolvency trustee will be happy to have with you and will help you in first trying to find one of the possible bankruptcy alternatives. Hopefully, together you can see which one is best for you. Only if there is not an available alternative, will the trustee recommend bankruptcy?
A current bankruptcy filing may prevent you from acquiring a mortgage or other financing for years. Credit card businesses will instantly end your charge cards when you file for bankruptcy. Likewise, if you are trying to find a job or rent a place to live, some employers or property owners might look unfavourably on a current bankruptcy filing. If other applicants are as qualified as you and don’t have a bankruptcy on their record, you probably won’t be chosen.
Fresh start
Bankruptcy permits people or companies that are unable to pay their debts to settle their monetary difficulties and start restoring their credit. Declaring bankruptcy will trigger the “stay of proceedings”, preventing creditors from starting or continuing any legal action to collect their debts.
A bankruptcy filing will stay on your credit report for about 7 years. Since many financial debts can be discharged in bankruptcy with certain exceptions, people can take certain steps to begin boosting their credit rating after filing for bankruptcy and for sure after obtaining their discharge.
What to do if you are experiencing financial hardship
I hope this bankruptcy trustee in Vaughan Brandon’s Blog was helpful to you. People experience financial hardship for many reasons. If you’re experiencing financial hardship and are looking for a way out, contact Ira Smith Trustee & Receiver Inc. With immediate action and the right plan for moving forward, we can set you on a path to debt-free living Starting Over, Starting Now. All it takes is one phone call.
The purpose of this blog is to discuss the corporate receivership bankruptcy difference Canada. Every general security agreement defines exactly how the secured lender will certainly deal with obtaining his/her cash when it comes to default. One means to do this is by selecting a receiver.
A receiver or receiver/manager is an individual/company licensed by the Federal Government to act as a licensed insolvency trustee. The receiver can be appointed either by an instrument in writing or by a court order. A receivership administration falls under the Bankruptcy and Insolvency Act (Canada) (BIA), where the receiver takes possession and control over the assets to of the insolvent business.
The receiver or receiver/manager will certainly seize the properties covered under the lender’s security or covered by the court order. The receiver will also develop a plan to market the assets for sale. After paying any type of priority claims as well as the receivership administration costs, the net funds are paid to the first secured creditor.
a restructuring proposal could be annulled by the trustee or creditor for non-compliance.
There are many reasons that a corporation could go into bankruptcy. These consist of the following:
The firm has defaulted under its premises lease, the landlord distrains against the firm’s possessions. A bankruptcy or a notice to make a proposal filed before the property owner finishes the sale of assets defeats the lease distraint.
The firm has unsecured assets (i.e., possessions without a lender’s security registered against it) that are available to be realized upon. Also, the firm cannot carry on business any longer.
If a restructuring proposal is submitted, but the company could not get adequate funding to continue its business and complete the proposal.
To reorganize the statutory priorities.
To officially bring the business to an end as well as give a complete report to the creditors so they will not believe the principals engaged in any kind of misbehaviour.
In a company bankruptcy, the licensed insolvency trustee seizes all the business’s properties plus deals with all the creditors. The directors and management of the company accept the authority of the trustee; if requested by the trustee, they can as well as aid the trustee in his/her tasks. This eliminates them from all the stress of dealing with the creditors as well as running the cash-starved business.
Receivership bankruptcy difference Canada: Making the Application to Put a Debtor Into Bankruptcy
If a creditor is incapable of recovering the amount owed to it with any one of the readily available techniques which can be done, they may look to a bankruptcy application. This is especially so having actually acquired a judgment for the quantum owing which has not been satisfied. The BIA allows for the licensed insolvency trustee, once appointed, to take possession in an organized way, the assets of an insolvent debtor, to realize upon those assets and to then distribute the funds according to the scheme of priority in the BIA.
The BIA allows for the benefit of both bankrupts and their creditors. While the Act is not planned for usage as a device for the collection of private financial obligations, this may be the case in specific situations.
Receivership bankruptcy difference Canada: When is a Creditor Allowed making a Bankruptcy Application?
An unsecured creditor could apply for a bankruptcy order where:
the lender is owed $1,000 or even more on an unsecured basis, and
there has actually been an act of bankruptcy by the borrower within the 6 months that come before the filing of the application. Keep in mind that a secured lender can value its security at less than the overall amount owing to develop a partly unsecured debt.
The BIA states that acts of bankruptcy consist of the following:
if in Canada or elsewhere he makes an assignment of his property to a trustee for the benefit of his creditors generally, whether it is an assignment authorized by this Act or not;
if in Canada or elsewhere the debtor makes a fraudulent gift, delivery or transfer of the debtor’s property or of any part of it;
if in Canada or elsewhere the debtor makes any transfer of the debtor’s property or any part of it, or creates any charge on it, that would under this Act be void or, in the Province of Quebec, null as a fraudulent preference;
if, with intent to defeat or delay his creditors, he departs out of Canada, or, being out of Canada, remains out of Canada, or departs from his dwelling house or otherwise absents himself;
if the debtor permits any execution or other process issued against the debtor under which any of the debtor’s property is seized, levied on or taken in execution to remain unsatisfied until within five days after the time fixed by the executing officer for the sale of the property or for fifteen days after the seizure, levy or taking in execution, or if any of the debtor’s property has been sold by the executing officer, or if the execution or other process has been held by the executing officer for a period of fifteen days after written demand for payment without seizure, levy or taking in execution or satisfaction by payment, or if it is returned endorsed to the effect that the executing officer can find no property on which to levy or to seize or take, but if interpleader or opposition proceedings have been instituted with respect to the property seized, the time elapsing between the date at which the proceedings were instituted and the date at which the proceedings are finally disposed of, settled or abandoned shall not be taken into account in calculating the period of fifteen days;
if he exhibits to any meeting of his creditors any statement of his assets and liabilities that shows that he is insolvent, or presents or causes to be presented to any such meeting a written admission of his inability to pay his debts;
if he assigns, removes, secretes or disposes of or attempts or is about to assign, remove, secrete or dispose of any of his property with the intent to defraud, defeat or delay his creditors or any of them;
if he gives notice to any of his creditors that he has suspended or that he is about to suspend the payment of his debts;
if he defaults in any proposal made under this Act; and if he ceases to meet his liabilities generally as they become due.
if he ceases to meet his liabilities generally as they become due.
Keep in mind that in most of the situations above, the creditor does not need to show that the borrower cannot pay various other creditors. In the last situation, the creditor should show that more than just its own debt is not being paid. Unique situations would differentiate matters though.
Unique scenarios can consist of allegations of fraud, near-fraud or those other transactions which fall under the types that would seem to be attackable by a trustee. At least on a prima facie basis.
It should, nonetheless, be remembered that stringent evidence of both your unsecured debt and an act of bankruptcy is required to have an individual or business judged bankrupt.
Receivership bankruptcy difference Canada: Under What Circumstances Should a Creditor Make An Application For A Bankruptcy Order?
Making an application for a bankruptcy order to put a debtor into bankruptcy is no little job. Prior to choosing this option, consider the following:
the presence and amounts of claims that could take priority over your unsecured creditor status;
the dollar measure of unsecured debt ranking on the same level with your financial debt (i.e., each unsecured creditor is paid according to the calculated share based on the measure of his/her debt);
the existence of questionable transactions or transfers undervalue within the three-month to five-year evaluation period before the declaration of bankruptcy;
your very own history of repayments from the debtor/borrower in addition to the normal payment patterns in the 3 months before the date of bankruptcy; as well as
the legitimacy of any kind of security you might hold.
Receivership bankruptcy difference Canada: The Bankruptcy Application Can Be Very Useful
Think about:
has the debtor actually moved the residential property to a related party for inadequate or no consideration;
where the debtor does not want to lose a specific part of its property (e.g. a private yacht, unique cars and truck or shares in a firm) or does not want its transactions and events to be inspected by a trustee and/or creditors;
the debtor (being an individual) expects an inheritance;
where the debtor (being an individual) needs to be an officer, director and/or shareholder of several businesses;
the debtor (being an individual) might have his/her expert certification or licence from which he/she derives income compromised or lost as an outcome of being ruled a bankrupt;
when the bankruptcy of the debtor would cause him/her to lose the ability to generally conduct business, such as required to use a trust account or employment requires the need to be bonded; or
being a bankrupt would cause the company or individual to lose the advantage of a specific useful agreement, lease, or company.
Receivership bankruptcy difference Canada: How Does a Creditor Make The Application For A Bankruptcy Order?
The creditor desiring to file the application will certainly need a lawyer to prepare the needed documents to make the bankruptcy application. The lawyer will serve the motion material and attend for the bankruptcy order. For an uncontested motion, the lawyer appears before the Bankruptcy Registrar who is a Master of the Court. If opposed, the matter can only be heard by a Judge.
The creditor has to additionally make arrangements with a licensed insolvency trustee to act will need to guarantee the trustee’s fee and costs incurred by the trustee where there are not enough proceeds from the sale of assets. A lot of times it is likewise needed to give the trustee a cash retainer.
When the Bankruptcy Order is made, the licensed insolvency trustee starts the bankruptcy administration. All actions against the insolvent are stayed.
Receivership bankruptcy difference Canada: What If You’re Company Has Too Much Debt?
Is your company insolvent? Are you looking for solutions? The Ira Smith Team is here to offer alternatives to restructuring and turnaround services however, if required, we also act as a licensed insolvency trustee in bankruptcy matters. We offer help in Vaughan as well as throughout the GTA.
Are you an individual or company who feels your situation is hopeless? Ira Smith Trustee & Receiver Inc. can prepare and put in place the plan MADE JUST FOR YOU. The plan will free you from the burden of your financial challenges. With our help, you will go on to live a productive, stress-free, financially sound life.
Many people are under the mistaken impression that the LIT works only for you, but that’s not right. Although you can choose your LIT and you’ll be making payments to them, the LIT doesn’t technically work for you.
Who does the LIT act for?
The LIT is an independent third party officially appointed by the local Office of the Superintendent of Bankruptcy to manage the bankruptcy process. Their main job is to make sure that the bankruptcy administration to make sure that the assets are properly liquidated and that both you and your creditors follow all the bankruptcy rules.
The Office of the Superintendent of Bankruptcy Canada publishes professional misconduct decisions on its website. Check to see that your trustee has a clean record.
Set up a free, no-obligation consultation with a bankruptcy trustee. Ask questions and make sure that you’re comfortable with the trustee and satisfied with the answers to your questions. If not, you can move to another LIT. A consultation doesn’t obligate you to stay with the trustee unless you’ve signed the paperwork.
Ira Smith Trustee & Receiver Inc. has a great reputation and a cumulative 50+ years of experience dealing with diverse issues and complex files. We deliver the highest quality of professional service. Give us a call today and Starting Over, Starting Now you will be well on your way to solving your debt problems.
Misconception # 1 is that trustees only deal with bankruptcy. Although you may know that a trustee is a Canadian bankruptcy expert, they’re also highly trained and educated debt consultants who, depending upon your particular circumstances, can offer you several alternatives which include credit counselling, debt consolidation and consumer proposals.
Misconception # 2 is that because it is a legal process, you need a lawyer. Although you may have heard many radio commercials telling you that you need a lawyer if you’re going to declare bankruptcy, and if you are dealing with income tax debt to keep using a certain lawyer and not a licensed insolvency trustee, this is simply not the case. Even though it is is a legal process, to file bankruptcy in Canada you need the services of a licensed insolvency trustee. In fact, bankruptcies and consumer proposals can only be administered in Canada through a licensed insolvency trustee.
What is the role of a trustee?
The Office of the Superintendent of Bankruptcy (OSB) licenses trustees to administer bankruptcy proceedings. When you file for bankruptcy, the trustee becomes the administrator of your property and assets.
Why use a trustee instead of a debt settlement company?
has undergone a background check by the RCMP before being granted a licence
is subject to a stringent code of ethics
maintains his/her competency by completing ongoing mandatory professional development each year
The Federal Government and the Court regulate trustees’ fees and for consumer matters, they are usually less than the fees of the debt settlement companies who make unsubstantiated claims
What should you do if you or your company have too much debt?
If you’re dealing with serious financial issues, contact a trustee, who is the Canadian bankruptcy expert. For the reasons already given, you should do this whether or not you’re contemplating filing. The reason is very simple: the licensed insolvency trustee will assess your situation, offer you all of your available options and will do this for you for free! You can’t find a better deal anywhere.
We’re experts in dealing with debt. ContactIra Smith Trustee & Receiver Inc. today for a free consultation and you will be well on your way to regaining your former quality of life Starting Over, Starting Now. Read our blog next week when we’ll be discussing how to choose a licensed insolvency trustee.
The television air waves are clogged with real estate reality shows – buying properties, selling properties, real estate flipping properties, renovating properties, income properties… There’s a real estate show that demonstrates every facet of the business and it all looks very simple. But I’m pretty sure that not one real estate reality show told you that real estate flipping when purchasing from a Receiver in Ontario can land you in a heap of legal trouble. Here is the story surrounding the Court of Appeal for Ontario case of Meridian Credit Union Limited v. Baig, 2016 ONCA 150.
Real Estate Flipping
Mr. Ahmed Baig’s corporation bought a downtown Toronto property located 984 Bay Street in a receivership sale. The property was purchased from the court-appointed Receiver with court approval, for $6.2 million in August 2006. Before the deal went through Mr. Baig secretly flipped the property for $9 million, netting a tidy profit of $2.8 million. The Receiver had no clue that when Mr. Baig bought the property he’d already agreed to resell it to Yellowstone Property Consultants (Yellowstone). In fact the Receiver assumed Yellowstone was Baig’s company and neither Mr. Baig nor his lawyer corrected that misunderstanding. On the advice of counsel the deal was structured so that the property would go directly to Yellowstone to avoid duplicate land transfer taxes. What a score for a little paperwork and some creative bookkeeping!
The Flopping
It’s hard to keep a $2.8 million real estate flipping secret and in 2009 Meridian Credit Union Limited (Meridian), the first ranking secured creditor at the time of the sale, and the Applicant in the receivership case, discovered the resale to Yellowstone. Meridian sued Mr. Baig. The Receiver, obliged to maximize the return on assets of any sale, argued it would never have recommended court approval had it known about the real estate flipping.
The Court noted that one of the terms of the Agreement of Purchase and Sale entered into between the Receiver and Mr. Baig’s company stated:
“Article 39 of the agreement of purchase and sale provided that Mr. Baig could assign the agreement to a corporation to be incorporated for the purposes of the sale with the receiver’s consent which could not be unreasonably withheld. However, in respect of any other assignment, the receiver had a consent right and its consent “may be arbitrarily withheld”.”
“Apart from the normal circumstances where any buyer would be reluctant to tell its vendor that there was another buyer available who would pay substantially more for the property, the fact that the sale occurred in a receivership is important. A receiver requires approval of the court to make a material sale of the debtor’s property. To obtain court approval, a receiver must establish that it engaged in a fair and commercially reasonable process to try to obtain fair market value for the property to maximize realization for the creditors. See: Royal Bank of Canada v. Soundair Corp., 1991 CanLII 2727 (ON CA), 1991 CanLII 2727 (ONCA). If a Receiver learns that it has undersold property it can be in a very difficult position in which it is contractually bound to seek court approval for its sale but it must, at the same time, disclose to the creditors and to the court that it has not maximized realization.”
The Honourable Mr. Justice Myers made the finding that Mr. Baig is liable to Meridian for fraudulent misrepresentation in an amount to be determined by the court.
The Appeal Court Ruled On The Real Estate Flipping
Upholding the lower court decision, the Court of Appeal found Ahmed Baig had deliberately misled the Receiver handling the receivership by failing to alert them to the resale through the real estate flipping. “In certain circumstances, silence and half-truths can amount to a misrepresentation,” the Appeal Court ruled. “Both the appellant and his counsel wanted to prevent the Receiver from discovering the sale to Yellowstone, because the $2.8 million differential in the price would jeopardize court approval,” the Appeal Court said. “Both the appellant and his counsel actively hid the agreement,” the Appeal Court found. Instead of making a fast $2.8 million Mr. Baig was held responsible for the misrepresentations made by his lawyer, who knew documents given to the receiver were false. While Baig had no obligation to disclose the resale agreement, the court decided that his failure to correct the misunderstanding that Yellowstone was his company amounted to fraudulent misrepresentation.
Would this real estate flipping decision be the same in a bankruptcy?
In my view, this ruling would also extend to bankruptcy administrations, as the bankruptcy trustee would be required to obtain either inspector or court approval, and be held to the same high standards as in this case. As professional trustees we are extremely ethical and would never support a fraud or blatant misrepresentation. We help individuals and companies throughout the Greater Toronto Area (GTA) facing financial crisis in need of restructuring and turnaround, receivership or bankruptcy that need a plan for Starting Over, Starting Now. The Ira Smith Team brings a cumulative 50+ years of experience dealing with diverse issues and complex files, and we deliver the highest quality of professional service. Don’t worry about debt; instead take immediate action.
Call us today. If you or your company is trapped in high debt, you need a professional trustee to help you manage the situation before it reaches a critical stage where bankruptcy or receivership is your only option. We have been able to help many individuals and companies carry out a successful debt settlement programs or corporate restructuring and turnarounds. It all began with an initial consultation. The first step is a realistic cash-flow budget. Successful completion of such a program, will free you from the burden of your financial challenges to go on to live a productive, stress-free, financially sound life.
This short video explains the difference between a consumer proposal and bankruptcy. Aconsumer proposal is a deal to end your debts. A consumer proposal is a legally binding process that is administered by a licensed trustee.
5 things that make the difference between consumer proposal and bankruptcy
In a bankruptcy, if your income goes up, the amount you have to pay to your Trustee may very well go up. In a consumer proposal, your payment is fixed.
In a bankruptcy, you will lose your income tax refund, contributions to your RRSP in the last 12 months, RESP for your children and other assets. In a consumer proposal that is accepted by your creditors, you get to keep your assets.
There is less reporting in a consumer proposal. You do not have to show proof of your income every month as long as you are keeping your consumer proposal payments current.
In a bankruptcy, if there is opposition to your discharge from bankruptcy, then you must attend for a Court hearing.There is no Court process at the end of the administration or a discharge hearing in a consumer proposal.
You stay in control of your assets and affairs in a consumer proposal that is accepted by your creditors and that you are performing.
These are the main things that create a difference between consumer proposal and bankruptcy.
If you have too much debt, call us now!
We offerpersonal bankruptcy and consumer proposal services, as well as corporate restructuring andcorporate receivership and bankruptcy services to residents of the Greater Toronto Area. We explain the differences between a consumer proposal vs. personal bankruptcy. In most cases we can get a consumer proposal done and it usually results in a substantial reduction in the amount you have to repay. The amount you are required to pay when you file a consumer proposal depends on a number of factors as explained in this short video.
So now that you know the 5 major items that makes up the difference between consumer proposal and bankruptcy and if you are experiencing financial problems, or you know that you are insolvent and are considering a consumer proposal vs. personal bankruptcy, or looking at all of your realistic options, including all alternatives to bankruptcy, contactIra Smith Trustee & Receiver Inc. Ira Smith Trustee & Receiver Inc. is a Vaughan (Toronto) bankruptcy trustee and consumer proposal administrator. We offer sound advice, a free consultation and a solid plan forStarting Over, Starting Now so that you’ll be well on your way to a debt free life in no time.
This short video (found at the bottom of this page) explains the differences between a consumer proposal vs. personal bankruptcy. A consumer proposal is a deal to end your debts. A consumer proposal is a legally binding process that is administered by a licensed trustee. Ira Smith Trustee & Receiver Inc. is a Toronto bankruptcy trustee and consumer proposal administrator.
We offer personal bankruptcy and consumer proposal services, as well as corporate restructuring and corporate receivership and bankruptcy services to residents of the Greater Toronto Area. We explain the differences between a consumer proposal vs. personal bankruptcy. In most cases we can get a consumer proposal done and it usually results in a substantial reduction in the amount you have to repay. The amount you are required to pay when you file a consumer proposal depends on a number of factors as explained in this short video. We hope that you find the short video informative and interesting. If you have any topics about debt, insolvency or finances that you would like us to cover in future videos, please let us know by leaving a comment.
Debt solutions: Introduction
The television air waves are clogged with 
