Tag: Bankruptcy

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THE NEW ECONOMIC ATTACK IS ON CANADA MIDDLE CLASS

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Canada middle class – what is your definition?

My definition of Canada middle class is the group under a new economic attack because of housing costs. Affordable rental housing for Canadians has become an oxymoron in term. In fact, rental housing has enslaved young Canada’s middle class, forcing them to spend so much of their incomes on a place to live, that many are in danger of becoming homeless.

What Statistics Canada says

According to the experts, spending more than 30% on housing is unaffordable. This doesn’t take into account food, clothing, transportation or any of the other necessities of life. According to data from Statistics Canada:

  • There are more than 4 million renters in Canada
  • Over 40% of all renter households are spending in excess of 30% of their gross income on rent
  • 20% of all renter households are spending in excess of 50% of their gross income on rent which housing advocates say puts them at high risk of becoming homeless
  • In Vancouver and Toronto, 45% of renter households are spending more than 30% of their income on rent

Not just a big city problem for Canada middle class

The lack of affordable rental housing is not a problem exclusive to the big cities. Renters in small cities across Canada are also struggling financially. In the Toronto area, average rents are higher in the suburban communities of Milton and Vaughan than in the City of Toronto. And, Mississauga ranked among the worst cities in the country when it comes to a shortage of affordable rental housing.

Traditionally people rented apartments to save money and eventually buy a house. With young Canada middle class enslaved by rental prices, buying a house isn’t even on their radar; keeping a rental roof over their heads is a primary concern.

What to do if you have debt problems

Are you living paycheque to paycheque because you’re enslaved by rental prices? We can’t help you find a cheaper place to live, but we can help you deal with what may seem to be insurmountable debt. Call Ira Smith Trustee & Receiver Inc. today. We’ll review your file and come up with a plan so that you can be Starting Over, Starting Now.

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▓ VIDEO: CONSUMER PROPOSAL VS. PERSONAL BANKRUPTCY ▓

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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 have written previous blogs about consumer proposals, including:

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.

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, contact Ira Smith Trustee & Receiver Inc. We offer sound advice, a free consultation and a solid plan for Starting Over, Starting Now so that you’ll be well on your way to a debt free life in no time.

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THREE KINDS OF CREDIT CARD CHARGES NEEDING DEBT RELIEF

bankruptcy, Canadian debt, credit card, credit card debt, debt, debt relief, grey charges, free-to-paid, free trials, how to reduce debt, phantoms, subscriptions, starting over starting nowThe need for credit card debt relief

Debt relief from credit card debt is something we see in our personal insolvency cases all the time. We read in the newspaper and hear in the media about the high level of Canadian debt. Credit cards, after mortgages, are one of the main types of debt being carried.

People always ask us how to reduce debt and the first way is to have realistic expectations about what you can afford. The next way, is not to fall for advertisements that seem too good to be true and require you to input your credit card information for a “free trial”.

I’m sure you’ve heard the expression, “There’s no such thing as a free lunch”; that may be true for free trials as well. These so called free trials most commonly incur what we call “grey charges”. Grey charges are big business and responsible for big debt. According to Aite Group, there are 233 million grey charges a year, amounting to $14.3-billion (U.S.).

What are grey charges?

  • Free-to-paid are the most common grey charges. You sign up for a free trial period (typically a magazine or online service subscription) after which it becomes a paid subscription if you forget to cancel by a certain deadline. How many people forget to cancel by the deadline? There are over 115 million free-to-paid transactions a year, adding up to over $6 billion, according to Aite Group.
  • Phantoms are extra products and services added onto another transaction.
  • Zombies are subscription fees continually billed to you even after cancellation.

We are seeing more grey charges creeping into credit card debt requiring overall debt relief.

Why are they called grey charges?

They’re called grey charges because although they’re legal, they are morally in a grey area.

These grey charges can go on year after year and all the while you’re accumulating debt. “Nine out of 10 people don’t check their credit card charges carefully,” says Mick Weinstein, vice-president of software company BillGuard. “And even if they do, it’s too time-consuming to dispute those charges. So most people simply let them go.”

So the first avenue to obtain debt relief, is to look at all your credit card charges closely and take the time to dispute the ones that do not look authorized.

Four ways to catch grey charges

Don’t be on auto-pilot when it comes to your finances. Take action against grey charges with these 4 tips.

  1. Check your credit card statements carefully each and every month. These may seem like small charges, but they can add up and hurt you.
  2. Don’t sign up for free trials. Remember, there’s always a hook. So if you wouldn’t pay monthly for it, don’t sign up. There is no such thing as a free lunch.
  3. If you do sign up for a subscription, make sure you read the fine print. You need to understand exactly what your financial obligation is.
  4. Check for phantoms. You may be paying for features you don’t want or need.

Serious debt requires serious professional help

Debt is serious business that requires the help of serious professionals. If you’re struggling with debt and are in need of debt relief, contact the Ira Smith Team as soon as possible. We’re 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 have helped many individuals obtain the debt relief they so desparately require. Take the first step towards financial freedom today.

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BANKRUPTCY AND DIVORCE: NOT ALL REASONS TO GO BANKRUPT ARE GOOD

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Whenever we speak to groups about bankruptcy and divorce, and especially to grey divorce support groups, the same questions always arise regarding the interplay between the Federal Bankruptcy and Insolvency Act (BIA) and the Ontario family law provisions. I thought it would be best to address one such interesting issue in this week’s blog.

You may hate your soon-to-be ex, but the courts won’t allow you to use bankruptcy as a weapon against that spouse. Bankruptcy is legal proceeding involving an insolvent person or business that is unable to repay outstanding debts. It is not a way to avoid paying alimony or child support. There was a recent case that clearly demonstrates the court’s view on this very issue.

Blatherwick v Blatherwick

The case is Blatherwick v Blatherwick, 2015 ONSC 2606 (CanLII). The parties separated after 39 years of marriage. The wife was seeking spousal support and equalization, among other things. The husband disputed the amounts that the wife was seeking. The wife obtained a Mareva injunction which is a court order preventing a defendant from transferring assets until the outcome of the associated law suit is decided. However, the husband breached the Mareva injunction by declaring bankruptcy. And, to make matters worse he made false representations in bankruptcy, including the valuation of corporate assets and reporting of income. The husband thought that if he declared bankruptcy he would be putting his assets beyond the reach of his wife’s claim for equalization. (In a bona fide bankruptcy, it is true that an equalization claim is not a claim provable in the bankruptcy, unlike a claim for alimony and child support which cannot be extinguished as a result of a bankruptcy).

Unfortunately for Mr. Blatherwick, the intersection of bankruptcy and divorce does not work that way!

The Judge’s view on Mr. Blatherwick’s bankruptcy

The Judge stated:

“303 I find as a fact that Mr. Blatherwick made false statements which were significant in his Statement of Affairs.

304 I find as a fact that he made the assignment into bankruptcy to avoid making an equalization payment to Mrs. Blatherwick and to avoid his financial obligations arising from his voluntary disclosure to Revenue Canada.

305 I find as a fact that the purpose of Mr. Blatherwick going bankrupt was to obtain a collateral benefit in the matrimonial proceedings.

306 I conclude there was no bona fide financial reason for making a voluntary assignment into bankruptcy.”

Accordingly, the court annulled the bankruptcy. In the truest sense, it was as if the bankruptcy never happened at all. In this case, bankruptcy and divorce did could not be combined.

Summary

Trying to cheat the system by making false statements on your sworn statement of affairs to make yourself appear insolvent is never a good idea and can even lead to criminal charges. The bankruptcy can, as demonstrated in this case, be annulled.

If you are insolvent and are considering bankruptcy, contact Ira Smith Trustee & Receiver Inc. We offer sound advice and a solid plan for Starting Over, Starting Now so that you’ll be well on your way to a debt free life in no time.

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BANKRUPTCY QUESTIONS VIDEO: THE BEST ADVICE WE EVER HEARD

:bankruptcy alternatives, alternatives to bankruptcy, bankruptcy questions, debt, debt problems, debt settlement, debt settlement companies, licensed trustee, starting over starting now, trusteeYou probably have many bankruptcy questions if you’re experiencing serious debt problems and you are no doubt going through a very stressful time in your life and you may not know where to turn. Ira Smith Trustee & Receiver Inc. is here to tell you that there is help available, answers to your bankruptcy questions and there are solutions to your debt problems. The best thing that you can do is contact a Licensed Trustee as soon as possible. There is a popular misconception that Licensed Trustees only deal with bankruptcy, but that is only one of our many functions. We can and do help with debt problems considering various alternatives to bankruptcy also.

http://youtu.be/4tJwFT36FPI

Contact Ira Smith Trustee & Receiver Inc. for a free consultation today. We can help you with your debt problems and answer your bankruptcy questions. Starting Over, Starting now you can live a debt free life.

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HOW ARE IDENTITY THEFT AND CORPORATE BANKRUPTCY RELATED?

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Identity theft definition

Identity theft and fraud are terms used to refer to all types of crime in which someone wrongfully obtains and uses another person’s personal data in some way that involves fraud or deception, typically for economic gain[1]. When we think of identity theft we have images of shady characters lurking in the shadows who perpetrate fraud upon us for the purposes of stealing our personal information.

Identity theft awareness

As a result we’re often remiss in really understanding who has access to our personal information and what an assumed trusted source can legally do with it. Did you know that when a company goes bankrupt, your personal information can be sold to the highest bidder, leaving you potentially exposed to identity theft?

Identity theft company bankruptcy

According to David Fraser, a privacy law expert at McInnes Cooper, when a company goes bankrupt, it is legally obligated to sell off its assets in order to pay off its creditors. Although information is not property like a computer or a printer, records are considered an asset of the business and can be sold. However, the conditions of the privacy policy usually still hold, and the data can only be used for the purposes for which it was originally collected. Although this sounds like your personal information would remain secure, that is not always the case.

Nicholas Johnson, a professor at Sheridan College, reviewed the privacy policies of about 30 websites and uncovered some startling information. He looked closely at what kinds of information companies were asking for and what protections they offered, if any, in the event of a reorganization. He then detailed how personal information can easily fall into the wrong hands.

  • Most companies have privacy policies that allow for customer data to be transferred to a third party in the case of bankruptcy or a restructuring
  • Almost every company requested email address, first name and last name from its customers
  • In about 10 cases, companies asked customers to opt-in to email notifications or for credit card information
  • Few companies actually detailed what would happen to this information if the company was sold

Identity theft is a real problem and the number of victims is growing at an alarming rate. We need to be more diligent about safeguarding our personal information. What, if anything, are you doing to protect your personal information?

Problem from identity theft

If you’ve been a victim of identity theft and are now experiencing serious financial problems or have serious debt issues for any reason, contact the Ira Smith team as soon as possible. We work with individuals and companies throughout the Greater Toronto Area (GTA) facing financial crisis or bankruptcy that need a plan for Starting Over, Starting Now. Don’t let debt ruin your life. Contact us today.

[1] United States Department of Justice website.

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BACK TO SCHOOL: TEACH YOUR KIDS ABOUT MANAGING DEBT

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It’s commonly believed that all parents dread having the “sex” talk with their kids, but a recent study from BMO shows parents would rather talk to their kids about sex than their financial situation and managing debt. Imagine that! Canadians are stressed about money and probably feel ill-equipped to educate their kids about finances and managing debt.

Personal debt in Canada

According to a new national study conducted by Leger:

  • Canadians struggle with regret over financial decisions
  • Argue over spending
  • Feel pressure to keep up with friends or colleagues
  • Bend the truth to friends and family about their financial situation in order to save face

A Bank of Montreal study reports that:

  • More than 33% of all Canadians are ashamed of the debt that they have
  • Almost 40% say they stress over debt levels multiple times a day

There’s no doubt about it, money and managing debt is the top source of stress in our lives. Why are we so financially stressed? Why are Canadians stressed over debt and have so much trouble managing debt? Here are 10 of the most common reasons:

  1. Expenses are greater than your income
  2. You worry about job security
  3. You’re living paycheque to paycheque
  4. You’re fighting with your spouse/partner about money
  5. You’re paying bills late
  6. You use your home equity like an ATM machine
  7. You’re counting on an inheritance to solve your money problems
  8. You’re late on student loan payments
  9. You’re helping out your parents and your kids
  10. You don’t have a financial plan

Dealing with debt

It’s time to become financially literate and educate your kids, not just about the birds and the bees, but about finances and managing debt. Foresters recently offered 5 tips to get smarter about your finances:

  1. Learn everything you can about your finances, including your mortgage terms, bank interest rates and credit score
  2. Start with the simple things like contributing to RRSPs, setting up RESPs for your kids and protecting your family’s financial future with life insurance
  3. Keep track of every penny you spend for a couple of months and look for ways to cut back and start saving. Even a small commitment to saving will make you feel better about your finances
  4. Look ahead 10, 20 and 30 years. Imagine the life you want and what it will take to make that happen
  5. Talk to your kids regularly about money, involve them in household budgeting, open bank accounts for them and encourage them to save for things they want

How to get help with debt

All of this is great advice to avoid financial problems, but if you are already in serious financial difficulty and don’t know where you will begin on how to manage your debt, you need professional help now. Contact Ira Smith Trustee & Receiver Inc. Don’t ignore your debt issues. Face them head on and with the help of the Ira Smith team you’ll be on your way to conquering debt Starting Over, Starting Now.

 

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SHADOW LENDING MARKET: WHY JEWELLERS MAKING MORTGAGE AND CAR LOANS ARE AFRAID OF THE TRUTH

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Picture courtesy of Huffington Post

Jewellers making mortgage and car loans in the shadow lending market are afraid of the truth

If you really knew who you were dealing with for that loan and what the real costs were, and how they felt about you, you certainly would question the wisdom of doing it. Here is what one such jeweller famous for his television commercials said:

He believes some of his customers probably shouldn’t be seeking refinancing to hold on to their homes, but added that if Canadians are going to be so addicted to home ownership, he might as well cash in. “It doesn’t make sense to go to your jeweller for a mortgage or even for a car loan,” he said.”

The shadow lending market Canada and the shadow lending mortgage market Canada

How times have changed! Did you ever think you’d see the day when television commercials featured jewellers offering you mortgages? Yes, there are now a growing number of “alternative lenders” offering mortgages; of course at interest rates well above what traditional financial institutions are charging. One mortgage broker (who was not identified by name) said that although major Canadian lenders offer five-year fixed mortgage rates at about 2.5% to qualified borrowers, rates in the private market range from 7% – 15%. In addition to higher service fees, the market is also weakly regulated, allowing lenders to take advantage of the estimated 20% – 30% of Canadians with limited or no options at traditional financial institutions due to low income or a poor credit score.

The shadow lending market is growing fast

This shadow lending market is growing faster than it can be regulated and preying on the most indebted, vulnerable Canadians. A CIBC report from earlier this year noted that lending by non-commercial bank lenders has doubled since 2012. The Bank of Canada warned about the risks inherent in the shadow banking sector in its most recent Financial System Review last month. The shadow market is estimated at less than 10% of Canada’s mortgage market, much less than the 30% estimated for the pre-crash U.S. market. Low interest rates make it very attractive for people to continue borrowing and pile up debt, making it an ideal climate for the shadow lending market to continue to grow at an ever faster pace.

Why are Canadians falling prey to these shadow lenders?

  • They have multiple mortgages, taking equity out of their homes to cover other debts
  • When they get into financial difficulty, the homes have been used as ATM machines because of the increasing values

Then they fall behind on mortgage payments and are threatened with foreclosure. Mortgages in Canada are considered “full recourse” loans, which means the borrower is responsible for repaying a loan even in the case of the lender taking over and selling the home through power of sale proceedings because you could not keep up the mortgage payments. Canadians who don’t qualify for a bank loan have been forced to refinance in the shadow lending market to avoid losing their home.

I don’t buy jewellery from a trustee

Don’t take financial advice from a television commercial and don’t go to your jeweller for a mortgage or a car loan. Are you plagued by debt problems? Do you have bankruptcy questions? Professional trustees are experts you can count on for sound financial advice regarding insolvency, bankruptcy and bankruptcy alternatives. If you’re having financial difficulties contact Ira Smith Trustee & Receiver Inc. as soon as possible. We’re 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.

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ECONOMIC DOWNTURN CAUSES MORE PEOPLE TO CONSIDER BANKRUPTCY OR PERSONAL BANKRUPTCY ALTERNATIVES

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Personal bankruptcy alternatives are always sought after an economic downturn. The economic downturn is causing more people to rely on credit to supplement their income and/or their lifestyle. This mountain of debt will ultimately result in bankruptcy or hopefully, an alternative to bankruptcy.

What Bank of Montreal and Statistics Canada say about Canadian household debt

In BMO’s Annual Debt Report, the average household debt of those surveyed is $92,699, more than $4,000 higher than the four-year average dating back to 2012. And servicing that debt, which includes mortgages, lines of credit and credit card debt, is costing $1,165 a month.

According to Statistics Canada:

  • The debt-to-income ratio of Canadian households is 163.3% which means for every dollar Canadians earn, they owe $1.63 in debt
  • Canadian households now owe $1.841 trillion in various forms of debt
  • More than $1.1 trillion is from mortgages
  • $519 billion is consumer debt, like credit cards

Debt + More Debt = a Solution?

Adding debt to more debt is not a solution to the problem; it compounds the problem. If you are using credit cards to supplement your income or your lifestyle, you have a serious problem that needs professional help. Don’t wait until bankruptcy is your only option. You should be learning about personal bankruptcy alternatives before it is too late.

Is there such a thing as bankruptcy solutions?

We are asked this question all the time. Before even considering bankruptcy, I always want to discuss 3 formal alternatives to personal bankruptcy:

  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, all on an interest-free basis!

In addition there are informal personal bankruptcy alternatives including budget review, contacting your creditors (including your mortgage lender), selling an asset and contacting the Federal Government’s Repayment Assistance Plan (if you’re having difficulty repaying your student loan debt).

Just ask your Toronto bankruptcy trustee

A professional trustee can open up a world of possibilities for you. Contact Ira Smith Trustee & Receiver Inc. for help with your financial problems. With just one phone call you can be well on your way to a debt free life Starting Over, Starting Now.

 

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DAVID CASSIDY PARTRIDGE FAMILY TOUR BETTER START SOON

David Cassidy
David Cassidy

What happened to David Cassidy?


This YouTube David Cassidy video says it all. His bankruptcy, notwithstanding he refutes it, must be related in some small part to his alcoholism and the several David Cassidy DUI events. The US Bankruptcy Court has ordered that he now must have his Florida home sold by auction.

For those of you too young to remember him, here is the link to the David Cassidy bio. As you can see, he was a huge music and television star heartthrob. Whatever happened to him over the years, David Cassidy now must pull his life back together. Like all of us, he must learn to live within his means and budget properly. Mr. Cassidy certainly isn’t the first, and won’t be the last celebrity having financial problems.

Next Steps

So who knows? Maybe Mr. Cassidy will have to go back on tour with a Partridge Family revival tour, or at least a David Cassidy tour, to earn extra income! Like all of us, he will have to learn to live within his means. Dealing with his personal problems will also be a great new beginning for him.

And what if you were not famous but are struggling?

If you’re struggling to support a lifestyle you can no longer afford, take immediate action and contact a professional trustee and explore your alternatives to bankruptcy. There are alternatives to personal bankruptcy – credit counselling, debt consolidation and consumer proposals. However, regardless of the choice that’s right for you, a balanced budget is always part of the equation. As we’ve stressed before, a balanced budget is to financial health what a balanced diet is to physical health. You’ll have to take a realistic look at your lifestyle and a serious look at your big ticket items – luxury home(s), exotic vacations, luxury cars, designer clothes and expensive entertaining and start living within your budget in order to benefit from one of the alternatives to bankruptcy .

The Ira Smith team approaches every file with the attitude that corporate or personal financial problems can be solved given immediate action and the right plan. Contact us today and Starting Over, Starting Now you can be on the path to a debt free life.

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