Tag: Bankruptcy

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Brandon Blog Post

DO YOU INHERIT DEBT IN CANADA: CRA SAYS YES TO PROPERTY TRANSFERS

Introduction

When conversations of financial obligations happen, people usually joke around and state they’ll finally be without debt upon their death. Many people who come to me for their no-cost consultation also ask, do you inherit debt in Canada? A recent decision of the Tax Court of Canada inspired me to write this Brandon’s Blog to discuss the issue.

What happens to debt when you die in Canada?

In general, what happens to debt when you die in Canada is that your Executor or Executrix (in Ontario it is called an Estate Trustee) needs to understand all of the deceased’s assets and liabilities. The Estate Trustee needs to make sure that all debts are paid off before making any distribution to the beneficiaries. Unless you have co-signed for or guaranteed someone else’s loan, you are not responsible for your spouse’s or parent’s debts upon their death. There at generally two exceptions.

The first is credit card debt where usually a spouse has a supplementary credit card on the same account. In that case, you need to look at the credit card agreement because the supplementary cardholder might be responsible for the debt. So if there are insufficient assets in the estate to pay off the credit card debt, the supplementary cardholder may have to.

Section 160(1) of the Income Tax Act (Canada)

Section 160(1) of the Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.)) (Income Tax Act), and its equivalent, S. 325 of the Excise Tax Act (Canada), can be utilized by the Canada Revenue Agency (CRA) to assess tax obligation liability to those who received a transfer of property from persons with tax obligations at the time of the transfer. This indicates if a person offers you something of value (virtually anything), while they have a tax debt, the CRA can and will certainly pursue you. CRA’s view is that the original tax obligation debtor ought to have sold whatever was transferred, and the funds used to pay off the tax debt.

This section of the Income Tax Act (or Excise Tax Act) especially comes into play during irathe administration of a deceased Estate or in an insolvency filing.

The Court decision, released on February 10, 2020, highlights this issue that death is no excuse when it comes time to pay the taxman!

The Court case facts

The CRA assessed the two daughters of the deceased father $96,640.96 each under section 160(1) of the Income Tax Act in respect of a transfer of property from their father prior to his death. Each daughter has appealed the assessments to the Tax Court of Canada. The two appeals were heard together as the evidence and facts were identical.

The agreed statement of facts was:

  1. The father was the annuitant of a Franklin Templeton Investments life income fund (the Income Fund) and prior to his death, he designated each of his daughters as his irrevocable beneficiaries under the Income Fund.
  2. In his last will and testament, he named his daughters as Estate trustees and beneficiaries of his estate.
  3. The father died on June 8, 2011.
  4. On or about July 26, 2011, $96,640.96 was transferred to each of the daughters.
  5. Each of the daughters received the $96,640.96 distribution on July 26, 2011, in satisfaction of their beneficial interest following the father’s death.
  6. The daughters provided no consideration in regard to the transfer of the $96,640.96.
  7. On July 3, 2015, the Minister of Revenue assessed each of the daughters $96,640.96 on the basis of subsection 160( 1) of the Income Tax Act.
  8. The father had an outstanding tax liability of not less than $96,640.96 with respect to his 2011 taxation year.

Tax liability re property transferred not at arms’ length

Section 160(1) of the Income Tax Act reads as follows:

“Tax liability re property transferred not at arm’s length

160 (1) Where a person has, on or after May 1, 1951, transferred property, either directly or indirectly, by means of a trust or by any other means whatever, to

(a) the person’s spouse or common-law partner or a person who has since become the person’s spouse or common-law partner,

(b) a person who was under 18 years of age, or

(c) a person with whom the person was not dealing at arm’s length,

the following rules apply:

(d) the transferee and transferor are jointly and severally, or solidarily, liable to pay a part of the transferor’s tax under this Part for each taxation year equal to the amount by which the tax for the year is greater than it would have been if it were not for the operation of sections 74.1 to 75.1 of this Act and section 74 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in respect of any income from, or gain from the disposition of, the property so transferred or property substituted for it, and

(e) the transferee and transferor are jointly and severally, or solidarily, liable to pay under this Act an amount equal to the lesser of

(i) the amount, if any, by which the fair market value of the property at the time it was transferred exceeds the fair market value at that time of the consideration given for the property, and

(ii) the total of all amounts each of which is an amount that the transferor is liable to pay under this Act (including, for greater certainty, an amount that the transferor is liable to pay under this section, regardless of whether the Minister has made an assessment under subsection (2) for that amount) in or in respect of the taxation year in which the property was transferred or any preceding taxation year,

but nothing in this subsection limits the liability of the transferor under any other provision of this Act or of the transferee for the interest that the transferee is liable to pay under this Act on an assessment in respect of the amount that the transferee is liable to pay because of this subsection.”

When identifying the applicability of section 160, you need to also consider the interpretation of arm’s length in subsection 251(1) and the interpretation of related persons in subsection 251( 2 ). Subsection 251(1) defines related persons not dealing with each other at arm’s length.

It likewise considers a taxpayer and certain trusts not to deal at arm’s length. Finally, it offers that, in any other case, it is an inquiry of fact whether individuals not related to each other are, at a certain time, dealing with each other at arm’s length.

Paragraph 251(2)(a) of the Income Tax Act provides that, for the objectives of the Income Tax Act, related persons or persons related to each other are individuals linked by blood relation, marital relationship, common-law or adoption. Paragraph 251(6)(a) specifies that, for the purposes of the Income Tax Act, individuals are connected by blood relationship if one is the child or various other offspring of the other or one is the sibling of the other.

The Federal Court of Appeal

The Federal Court of Appeal had already determined that the following 4 standards must be used when taking into consideration subsection 160(1):

  1. The transferor needs to be liable to pay tax at the time of transfer;
  2. There need to be a transfer of property, either straight or indirectly, through a trust or any other method;
  3. The transferee must either be:
  • The transferor’s spouse or common-law relationship at the time of transfer or a person who has since come to be the person’s spouse or common-law partner;
  • A person who was under 18 years of age at the time of transfer; or
  • An individual with whom the transferor was not dealing at arm’s length.

4. The fair market value of the property transferred needs to be greater than the true value of the consideration given by the transferee.

The position of the parties

CRA’s position was that this was a transfer of property from the father to the daughters prior to his death at a time when he had an outstanding income tax liability.

The daughters stated that they accept that three of the four criteria set out by the Federal Court of Appeal have been satisfied. Particularly, the Appellants agree that their father indirectly transferred the property to each of them, that he owed income tax relating to the tax year in which the transfer took place or a previous tax year and that no consideration was paid by the daughters.

Accordingly, both CRA and the daughters agreed that the only issue before the Court to determine is whether the father and his daughters were dealing with each other at arms’ length.

The daughters’ position was that at the time of the actual cash transfer their father was dead. He did not exist, and for that reason, he was not a related individual within the meaning of Subsection 251(6), and therefore was not in blood relation with them.

CRA’s position was simple. First, the time of the transfer was not when the investment firm paid the cash to the daughters. Rather, it was when the father designated them as irrevocable beneficiaries. Second, the father and his daughters were related not by contract, but by blood. So, even death cannot take away that relationship.

The Court’s decision

The Court agreed totally with CRA’s position, upheld the assessments against each of the daughters and dismissed the appeals. They were found to have received the transfer of the property for no consideration at a time when the father owed income tax of a greater amount. The daughters were each liable to pay the amount of $96,640.96 to CRA. So in this case, if the daughters were asked do you inherit debt in Canada, they would have to answer a resounding YES.

Insolvent and alive

I also come across this issue when providing a no-cost consultation to an insolvent person wanting to know their options. Whenever they disclose that they have an income tax debt, I ask about transfers between the person and his or her spouse or children. I do this to see if there are may section 160(1) transfer of property issues.

If there are, an insolvency filing will merely highlight the transfer issue to CRA. When they get notice of the consumer proposal or the bankruptcy, they start their deep-dive investigation into the affairs of the bankrupt. As a licensed insolvency trustee (formerly called a bankruptcy trustee), I also have to advise the creditors of any issues like a transfer between related parties for no or little consideration. Once CRA determines a transfer took place between blood relations for little or no value being given or paid, they will assess the spouse or child under section 160(1) of the Income Tax Act. The outcome will be the same as in this Court case.

Do you inherit debt in Canada summary

So alive or dead, transfers of property between blood relatives for little or no value is always troublesome when it comes to income tax debt outstanding at the time, insolvency and death. I hope you enjoyed this do you inherit debt in Canada Brandon’s Blog and that you have a better understanding that it is possible.

I am finding that I am getting involved more often in deceased estate matters. My involvement is in advising people who are the Estate Trustee of an insolvent estate. I also have acted as the licensed insolvency trustee of a bankrupt deceased estate.

That work has now naturally led to obtaining assignments where my skill set as a licensed insolvency trustee comes in handy in a deceased estate. Two examples are having acted as the Estate Asset Manager in selling off assets in an estate and as acting as an Estate Trustee where there is no bankruptcy involved.

Because of that work, Ira Smith Trustee & Receiver Inc. has opened up a new business division called Smith Estate Trustee Ontario. In that business, as Estate Trustee, we offer options for the complicated estate concerns. We end the discomfort and irritations the stakeholders are experiencing. We use the experience and integrity that we have built up over the years, with compassion, to help the parties navigate the messy estate issues. We strive for a win for all beneficiaries, adding value by reaching the settlements and distributions they were unable to accomplish by themselves.

We provide a full range of services to provide solutions for the complex Estate issues to end the pain and frustration the stakeholders are experiencing. We apply our expertise and creative thinking to take care of all details to end your pain and achieve the goals of the beneficiaries and other stakeholders. Contact Smith Estate Trustee Ontario today for your free consultation.do you inherit debt in canada

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Brandon Blog Post

CREDITORS: ALARM BELLS RING WHEN FINANCIAL RESTRUCTURING HEADS SOUTH

Introduction

The purpose of this Brandon’s Blog is to describe the final type of bankruptcy in Canada. I will describe it from the viewpoint of creditors. Previously I’ve blogged about the three types of bankruptcies in Canada. I also wrote about the personal bankruptcy process and the corporate bankruptcy process in Canada.

Personal bankruptcy and corporate bankruptcy in Canada

From the first two, the personal bankruptcy process and the corporate bankruptcy process, that was from the perspective of a person or company filing an assignment in bankruptcy. I also wrote about a person or company being pushed into bankruptcy by one or more creditors through a bankruptcy application and a bankruptcy order.

Today’s blog is to talk about the third type of bankruptcy and that is a deemed assignment in bankruptcy. The deemed assignment is most commonly associated with when a financial restructuring under the Bankruptcy and Insolvency Act (Canada) (BIA) heads south.

Creditors and a deemed assignment in bankruptcy

In Canada, very large corporate restructurings are done under the Companies’ Creditors Arrangement Act. A person or a company of any size can also restructure under the BIA. This blog is about restructuring under the BIA to illustrate the third way a person or company can go bankrupt through a deemed assignment in bankruptcy.

The reason people or companies would file for a financial restructuring is to get a time out from its creditors taking action against them trying to collect on debts. People who owe more than $250,000 and companies who have too much debt qualify to restructure under the financial restructuring debt settlement provisions of the BIA. A restructuring filing gives them the needed time out to formulate a plan for settling the debt.

If a person owes $250,000 or less, then there is a different restructuring provision of the BIA available. That provision is the consumer proposal restructuring debt settlement section. If a consumer proposal restructuring attempt fails, that ultimately does not end up in being a deemed assignment in bankruptcy.

The deemed assignment in bankruptcy, the third type of bankruptcy in Canada, is really the topic of this blog.

Financial restructuring under the BIA

So the BIA has a financial restructuring section. The debtor needing a timeout can either file their restructuring proposal straight away or first buy some extra time by filing a notice of intention to make a proposal. If a debtor first files a notice of intention to make a proposal, within 10 days after that, they need to file a cash flow statement in the prescribed form plus related extra documents (unless the time period is extended by the court). The restructuring proposal must be filed within 30 days after the filing of the notice of intention to make a proposal.

When a debtor files the actual restructuring proposal a cash flow statement has to be filed with it as well. It will be an original one if the debtor goes straight away to the filing of the proposal or an updated one if they first filed the notice of intention to make a proposal.

Meeting of creditors to consider the proposal

Once filed the Licensed Insolvency Trustee (formerly called a bankruptcy trustee) (Trustee) must notify the creditors of the filing of a notice of intention to make a proposal and the restructuring proposal. The Trustee must call a meeting of creditors within 21 days of the filing of the restructuring proposal.

The creditors get to vote to approve or not approve the restructuring proposal creditor acceptances by voting and must be in the requisite majority calculated as a simple majority in number and at least 2/3 of the dollar value of all claims voting either in person at the meeting or by proxy and voting letter delivered to the trustee prior to the start of the meeting.

The need for Court approval

After creditors accept the Proposal, the Trustee must get the restructuring proposal approved by the court. For the court approval process, the court considers if:

  • the restructuring proposal, are the terms of the restructuring proposal fair and calculated to benefit the general body of creditors?
  • Did the Trustee properly follow all required procedural steps including properly holding and counting the voting by the creditors?

As long as the answers to these questions are yes and the restructuring proposal took the interests of all stakeholders into account, then the court will approve the restructuring proposal. Then the company or the person must successfully complete it including making all payments required under the restructuring proposal.

How can a restructuring proposal fail or head south?

A financial restructuring plan under the BIA can fail if:

  • the person or company fails to file the required cash flow statement and related documentation within the 10 day period after the filing of the notice of intention to make a proposal or the debtor;
  • fails to file a financial restructuring proposal within the 30-day time limit after the filing of the notice of intention to make a proposal or such greater time period authorized by the court;
  • the requisite majority of creditors voting do not accept the restructuring proposal;
  • the court does not approve the restructuring proposal; or
  • the restructuring proposal is accepted by the creditors and approved by the Court but the debtor fails to make the payments and do any other things contained in the restructuring proposal.

When the debtor is automatically bankrupt when there is an event of default in the Proposal

Under the following situations, the person or company will be deemed to have filed an assignment in bankruptcy if the person or company:

  • fails to file the required cash flow statement;
  • the debtor fails to file the financial restructuring proposal on time;
  • the requisite majority of creditors voting do not accept the restructuring proposal; or
  • the court does not approve the restructuring proposal

Under any of these conditions, the person or the company is automatically deemed to have filed an assignment in bankruptcy. You can go back and review my earlier blogs for the personal bankruptcy process and for what the corporate bankruptcy process is all about.

You can do the same thing when the restructuring proposals are accepted by the creditors and approved by the court but the debtor fails to make payments or do any of the other things contained in the restructuring proposal.

A Proposal default that does not automatically mean bankruptcy

Unlike the other events of default, when the debtor fails to make a payment under the Proposal, there is not an automatically deemed assignment in bankruptcy. Rather the Trustee has to give notice to the debtor and if there are any the inspectors in the restructuring to them also. The person or company attempting to restructure then has 30 days to remedy the default. If they do not remedy the default after the 30 day period then the Trustee has to issue a notice of default which is sent to the debtor, the creditors, and to the Superintendent of Bankruptcy.

After giving notice of default, the Trustee does not have to do anything else. Any one of the creditors can then bring a court motion to annul the restructuring proposal. If the Trustee has the funding to do so and is directed by the inspectors, the Trustee can also bring that motion.

If the motion is brought and is successful then and only then is the person or company deemed to have filed an assignment in bankruptcy.

But if nobody brings the motion the company or person actually just floats out there and the Trustee is entitled to go for taxation of its receipts and disbursements, make whatever distribution it can with the funds on hand and then go get its discharge.

Three types of bankruptcy in Canada

So to recap, the three types of bankruptcies in Canada are:

  • filing an assignment of bankruptcy;
  • a bankruptcy application and the issuance of a bankruptcy order; and
  • as explained in this blog, a deemed assignment in bankruptcy.

I hope you enjoyed this blog on creditors, a financial restructuring proposal and the process for a deemed assignment in bankruptcy. The IraSmith team is available to help you at any time. 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.

Do you have too much debt? Are you banking on some outside event that you have no control over, like an inheritance or gambling winnings to save you or your company?

If yes, then you need immediate help. The Ira Smith Team comprehends just how to do a debt restructuring. Much more notably, we know the demands of the business owner or the person who has too much debt. Due to the fact that you are managing these stressful financial problems, you are anxious.

It is not your fault you cannot fix this issue on your own. You have just been shown the old ways. The old ways do not work anymore. The Ira Smith Team makes use of new contemporary ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief now.

At Ira Smith Trustee & Receiver Inc., we take a look at your whole condition and layout a strategy that is as unique as you are. We take the load off of your shoulders as a part of the debt negotiation approach we will create just for you.

We understand that individuals facing financial troubles require a lifeline. That is why we can establish a restructuring procedure for you as well as end the pain you feel.

Call us now for a no-cost consultation. We will certainly get you or your business back on the road to a well balanced and healthy life and end the pain factors in your life, Starting Over, Starting Now.

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Brandon Blog Post

BOY SCOUTS OF AMERICA BANKRUPTCY: THE EXTREME SIDE RARELY SEEN

Boy Scouts of AmericaIf you would prefer to listen to an audio version of this Boy Scouts Of America Brandon’s Blog, please scroll to the bottom of this page and click on the podcast.

Introduction

The Boy Scouts of America has filed for Chapter 11 bankruptcy protection, according to court files in Delaware bankruptcy court. The filing was done early on Tuesday, February 18, 2020. All of it began with one man in 2010.

The purpose of this Brandon’s Blog is to define the issues that caused this insolvency filing and to answer whether there ever was a similar type of bankruptcy protection filing under the Canadian insolvency system.

It all started with Kerry Lewis

In 2010, Kerry Lewis, a Portland Oregon man, won a lawsuit against Boy Scouts of America. Lewis was a sexual abuse victim. A jury found the Boy Scouts of America must pay $18.5 million in punitive damages for the abuse he experienced in being continuously molested by a Scout leader in the 1980s. Because of the bankruptcy protection filing, rather than potentially having their day in court, plaintiffs with unpaid judgements, and also alleged victims who have pending legal actions, will now need to file claims bankruptcy court.

The Boy Scouts of America have applied for bankruptcy protection, after being barraged by hundreds of sex-abuse lawsuits. Over 12,000 children are believed to have been sexually abused by Boy Scouts volunteers.

The Boy Scouts of America is the largest scouting organization and one of the largest youth organizations in the United States, with about 2.3 million youth participants and about one million adult volunteers. They have actually been encountering decreasing membership as well as thousands of lawsuits, with many more prospective legal actions yet to be filed. They are now dealing with new claims of sexual abuse from about 800 men throughout the country, according to attorneys representing them.

Why the Boy Scouts of America filed for bankruptcy protection

The Boy Scouts of America invested massive amounts of time as well as cash on litigation rather than protecting the children– with virtually 3,000 hidden child molesters only the Scouts know about. In a statement to National Public Radio, the Boy Scouts of America said it is working with experts and explored all options available. They think this insolvency filing will certainly be the best way they can meet their social and moral obligations to equitably treat victims who experienced abuse throughout their time in Scouting.

They went on to say that their strategy will also make certain that it will allow them to continue to perform their goal to serve young people, families and regional communities through their programs.

The issue of troop leaders sexually assaulting Scouts has tormented the Boy Scouts of America for decades. It is just now that the weight of the newer accusations and lawsuits has ended up being too much to deal with without the Chapter 11 filing.

The national organization of the Boy Scouts of America is the only entity involved in the Chapter 11 filing. The national company has created a method that intends to safeguard its local scouting councils and also the billions of dollars in properties they hold. They believe that maintaining those assets out of the reach of sexual-abuse claims is the only method to make certain that Scouting will be able to proceed in America.

That is a crucial concern. Will the Boy Scouts of America be able to shield the assets of the regional councils, which possess camps and properties in prime real estate throughout the nation. Many are claiming the Boy Scouts of America cannot be changed. Under the Chapter 11 filing, they will be able to continue its operations, and all the current claims will be put on hold.

The bankruptcy protection plan

The Boy Scouts of America are urging victims to come forward after the 110-year-old organization filed for bankruptcy protection in the first step toward dealing with a barrage of sexual abuse lawsuits. They are creating a plan, so they can capture all lawsuits yet to be filed and be able to afford to pay off thousands of still-uncompensated sex abuse victims. The filing is also an effort to stop thousands of sexual abuse claims ending up being litigated in court.

I do not think that this legal maneuver will stop survivors from stepping forward and beaming light on the criminals as well as the terrible actions of the abusers concealed by the organization. Nonetheless, sufferers will now only have access to a pool of funds to be assigned for that objective. At the initial bankruptcy hearing, the Boy Scouts of America still have actually not shared the names of the perpetrators with the general public in spite of laying out a four-point strategy with transparency as the first point!

Jeff Anderson, whose law firm has represented Scout abuse survivors for decades believes the Boy Scouts of America is using the filing to keep the names of predators a secret. “I don’t believe that this legal maneuver by the Boy Scouts of America will stop survivors from coming forward and shining a light on the perpetrators and perilous practices hidden by the organization,…” said Anderson.

The Boy Scouts of America have filed for bankruptcy protection in hopes of working out a possibly massive victim payment plan for sex abuse victims. Across the country, they have already mortgaged major properties to get a line of credit. Specifically, the national organization of the Boy Scouts of America has initiated a voluntary financial restructuring to ensure they can equitably compensate all victims of past abuse in our programs, through a proposed Victims Compensation Trust.

Public tax records show the Boy Scouts of America has more than $1 billion in assets, not including the balance sheets of local chapters. They have yet to disclose what size the Victims Compensation Trust will be.

The effect of the filing

Speculation swirled over whether the Boy Scouts of America will continue to exist in its existing organization or whether smaller teams will be formed to carry on its mission. They are establishing an approach, so they can catch all claims yet to be submitted and likewise have the ability to settle thousands of still-uncompensated sex abuse sufferers. The bankruptcy protection filing is also an approach to stop countless sexual abuse claims winding up being prosecuted in court.

The Mormon church, a long supporter of the Boy Scouts of America, has already announced that they are ending their connection, after more than 100 years of a close relationship. If successful, the plan will ensure that they will be able to continue to carry out their mission to serve youth, families and local communities through their programs.

The intriguing question is, will attorneys for victims try to pierce through the national organization and claim that all the local councils are not really independent. Or, is the independence on paper only? Is it truly a vertically integrated company that exercises considerable impact over the local councils? Only time will tell if any of the abuse victim lawyers pursue this path to attempt to increase the size of the Victims Compensation Trust.

So, the Boy Scouts of America’s insolvency strategy is the same as USA Gymnastics and the Catholic diocese. Can victims of such sexual abuse ever really be compensated? The organization in some form will move on, but sufferers will live with their pain and their scars probably forever. They will certainly most likely lose their personal voice in their search for justice because of the bankruptcy filing. This will rob sufferers of an important part of the healing process.

Is there a Canadian statue to restructure like this?

The answer is yes. Although there are two federal insolvency regimes in Canada, the only one that should be used for a very large corporate restructuring like this one is the Companies’ Creditors Arrangement Act (CCAA). The CCAA is the Canadian equivalent to Chapter 11 of the US Bankruptcy Code. It is a Canadian federal law allowing insolvent corporations that owe their creditors in excess of $5 million to restructure their business and financial affairs.

The closest Canadian example where the CCAA was used to compensate victims that I can think of is the CCAA filing of the Canadian Red Cross Society. It needed to restructure as a result of some $8 billion of tort claims being asserted against it (and others, including governments and hospitals). The claims were by a large number of people who suffered tragic harm from diseases contracted as a result of a blood contamination problem that has haunted the Canadian blood system since at least the early 1980s.

Summary

I hope you have found this explanation of the Boy Scouts of America issues informative. The Ira Smith team is available to help you at any time. 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. For more information on a no-cost basis please visit our website or call us.

Does your company have many lawsuits filed against it? Will the cost of all that litigation, let alone the amount of any judgements issued against your company, too much for your company to survive? Those costs and the massive debt cries out for a debt restructuring? Would not it be great if you could do a turn-around?

The Ira Smith Team understands how to do a debt restructuring. More notably, we understand the requirements of the business owner or the person who has too much individual debt. Because you are dealing with these stressful financial issues, you are anxious.

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

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

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

Call us now for a no-cost consultation. We will get you or your business back on the roadway to healthy and balanced worry-free operations and end the pain points in your life, Starting Over, Starting Now.

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Brandon Blog Post

3 TYPES OF BANKRUPTCIES: DO WE REALLY NEED IT?

3 Types of bankruptcies introduction

Two weeks ago I described the personal bankruptcy process Canada. Last week I described the Canadian corporate bankruptcy process. This week I want to start talking about the 3 types of bankruptcies in Canada.

3 types of bankruptcies: Voluntary and involuntary bankruptcy

In the last two weeks, I talked about both the personal and corporate bankruptcy processes. The way I described the bankruptcies it was all about the voluntary process of entering bankruptcy by filing an assignment in bankruptcy. That’s the 1st type of bankruptcy out of the 3 types of bankruptcies.

The second type which I will be speaking about today is the involuntary process of being pushed into bankruptcy. So how does one get placed into bankruptcy on an involuntary basis? It’s by a bankruptcy application.

3 types of bankruptcies: The bankruptcy application – the involuntary method

In order to file a bankruptcy application, one or more creditors must file the application to place the debtor, corporate or personal into bankruptcy. The creditor or group of creditors

must have unsecured debt of at least $1000 and the debtor must have committed at least 1 act of bankruptcy in the six months preceding the date of the bankruptcy application the acts of bankruptcy are laid out in the Bankruptcy and Insolvency Act (Canada).

3 types of bankruptcies: Acts of bankruptcy

So what are they? A debtor commits an act of bankruptcy in each of the following cases:

  • If in Canada or elsewhere the debtor makes an assignment of its property to a trustee for the benefit of its creditors.
  • A debtor makes a fraudulent gift delivery or transfer of all or part of its property.
  • The debtor makes any transfer of its property or any part of it that creates a charge on it that would be void as against a trustee and bankruptcy.
  • If with the intent to defeat or delay creditors the debtor departs out of Canada and absence itself.
  • If the debtor permits any execution or another process to be levied against it where it’s property is seized in order to be sold and the debtor does not redeem its property.
  • If the debtor exhibits to any meeting of creditors a statement of assets and liabilities that shows the debtor is insolvent if the debtor removes disposes of property or attempts to do so intending to defraud defeat or delay creditors.
  • If the debtor gives notice to any creditor that payments are being suspended or if the debtor ceases to meet its liabilities generally as they become do a bankruptcy application must be accompanied by an affidavit attesting to the debt and the alleged acts of bankruptcy3 types of bankruptcies

3 types of bankruptcies: What a bankruptcy application must look like

The affidavit must be deposed by a creditor or a representative of a creditor especially a corporate creditor and that representative must have personal knowledge of the facts. The bankruptcy application must be filed with the court having jurisdiction based on the location of the debtor. A bankruptcy application cannot be withdrawn without the permission of the court.

If there is a concern that the debtor’s assets might dissipate between the date of filing the bankruptcy application and the date of the court hearing the application the court can appoint the proposed licensed insolvency trustee to preserve and protect the assets but not too otherwise interfere in the running of the debtor’s business.

A notice of the time and place of the court hearing and all the motion material being used by the creditor or group of creditors must be served on the debtor.

3 types of bankruptcies: The bankruptcy order

A bankruptcy order could be issued 10 days after the service on the debtor of the bankruptcy application if it is not opposed or otherwise defended by the debtor. If it is defended then there will have to be a trial for the court to determine if a bankruptcy order should be issued and whatever the court decides. It is, of course, subject to the parties’ rights of appeal.

The debtor is bankrupt once the bankruptcy order is issued. The bankruptcy order puts on hold the enforcement rights of the creditors except for secured creditors holding valid security as soon as a bankruptcy order has been made the debtor’s property vests in the bankruptcy trustee and the bankruptcy administration begins.

To refresh yourself about personal bankruptcy administration check out my blog from two weeks ago. For a review again of the administration of a corporate bankruptcy check out my blog from last week.

Now the title of this blog is three types of bankruptcy. In the last two weeks, I have described voluntary bankruptcy for both an individual and a corporation by the filing of an assignment of bankruptcy. This week I talked about the involuntary bankruptcy process of the bankruptcy application for a bankruptcy order.

Next week I will discuss the third out of the 3 types of bankruptcies in Canada.

3 types of bankruptcies summary

I hope you enjoyed this 3 types of bankruptcies blog. The Ira Smith team is available to help you at any time.

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. For more information on a no-cost basis please visit our website or call us.

Do you or your company have excessive debt and looking for debt restructuring? Would not it be great if you could do a turn-around?

The Ira Smith Team understands how to do a debt restructuring. More notably, we comprehend the requirements of the business owner or the person who has too much individual debt. Because you are dealing with these stressful financial issues, you are anxious.

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

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

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

Call us now for a no-cost consultation. We will get you or your business back on the roadway to healthy and balanced worry-free operations and end the pain points in your life, Starting Over, Starting Now.3 types of bankruptcies

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Brandon Blog Post

HOW TO LOSE MONEY WITH WINNING LOTTERY NUMBERS

winning lottery numbersIntroduction

It is true that winning a lotto game can transform lives. Most people hope for winning lottery numbers. They hope for a lotto win to bring life-altering money. They hope their winning ticket will let them quickly repay a home mortgage or get a new home, purchase a brand-new vehicle, bring on early retirement and also limitless travelling.

That dream result is not always the case. I really hope a money windfall will bring excellent luck and fortune to you. However, this Brandon’s Blog is about how betting on winning lottery numbers to erase your debt or repair all your troubles, might not always hold true.

The probability of having the winning lottery numbers

Winning lotto is an unbelievable experience. The possibility of winning a lotto game are controlled by the law of probabilities. You do not need to have a Ph.D. in mathematics to recognize that winning a lottery game is a once-in-many-lifetimes chance. The likelihood of winning a lottery game is truly a conditional probability.

Your chances of winning are conditional on the number of tickets you have purchased. The selling of individual tickets and the selection of the winning lottery numbers are independent events. After that, the probability of winning a lottery is the combined event wherein your ticket matches the numbers selected.

There are just two ways of raising your possibilities to win a lottery game:

  1. Purchase extra tickets.
  2. You and your associate engage in fraudulent behaviour by having inside details on which numbers your pal can manipulate the bouncing spheres to get you the win!

Religious people say that everything they obtain is a true blessing. So, I assume winning a lottery falls into that same category. So, rather than thinking about their probabilities of winning, they buy lotto tickets and put their faith a higher power. Some people claim that the opportunity of winning a lottery game is so low, it is almost like throwing your cash away. The opposite side of the coin is that people who talk about the small probability of winning the lotto are met with the argument: But what if I’m the one?

Winning a lottery is not a debt elimination plan

For sure winning a lotto will put a smile on your face. Winning a lotto may be among the best experiences in someone’s life. Winning a lottery has constantly been the only opportunity for the typical individual with financial debts to get their financial freedom. Surveys show that virtually half of Canadians are counting on either receiving an inheritance or winning a lotto game for their retirement, with similar numbers showing up in various other developed nations.

Some people incorrectly think winning a lotto will fix all their troubles. If you see that your desire for winning a lotto has developed into troubles in any other facets of your life, understand that you are a lottery addict. The addiction is fuelled because the possibility of winning the lotto is so little and there are none of the regular small gains which persuade the habitual casino player to take their winnings and leave the table a winner that day. Chasing after the desire of winning the lottery keeps many people always coming back for more because their requirement to win has actually not been satisfied.

Winning a lotto game can have both adverse as well as positive influences in your life. Winning a lotto can totally transform you. A few years ago I wrote two blogs on how winning a lottery can ruin a person’s life as opposed to saving it. Those people actually lost money with winning lottery numbers.

Worse problems from winning a lottery

Most provincial lotteries have similar rules. One common rule is the need for transparency by publishing the name and other details about the winner. This can lead to worse problems than the ones I have already mentioned. Consider this coming from the United States.

One fortunate lottery winner from New Jersey might have the ability to relish all the cash from the next state lottery in secret– many thanks to a brand-new regulation that went into effect just last month. New Jersey Gov. Phil Murphy signed a law in January that enables winners to stay confidential.

Previous Governor Chris Christie vetoed the regulation saying that it would certainly threaten the openness that provides taxpayers confidence in the honesty of the lottery game. But advocates of the regulation, which was passed unanimously this year, claimed lottery winners must be able to make their own choice on whether they want the publicity or not.

New Jersey joined a handful of various other states consisting of Arizona, Delaware, Georgia as well as Kansas that permit lotto game champions to conceal their identifications if their winnings exceed a particular amount.

The legislation excuses names and addresses from the state’s public records, but state departments are still able to share the information internally to collect child assistance or other state social assistance overpayments.

Winning the lottery can lead to great pleasures like high-end cars, holidays and homes. However, it can also attract a lot of unwanted attention. All sorts of scammers come out of the woodwork to try to get the lotto winners to separate from their money. It can also lead to unwanted attention, harassment and even physical violence.

In 2016, a 20-year-old male that had won an almost half-million-dollar lottery game prize was killed during a home invasion robbery in Georgia. In 2010, a man that won $31 million, was found buried under concrete. His good friend was found guilty of his murder.

So from these examples, it is possible to lose money and more, with winning lottery numbers.

Summary

You can’t rely on winning lottery numbers to solve your financial problems. In fact, always buying lottery tickets might lead some people to have bigger problems. Do you have too much debt? Are you banking on some outside event that you have no control over, like an inheritance or gambling winnings to save you or your company?

If yes, then you need immediate help. The Ira Smith Team comprehends just how to do a debt restructuring. Much more notably, we know the demands of the business owner or the person who has too much debt. Due to the fact that you are managing these stressful financial problems, you are anxious.

It is not your fault you cannot fix this issue on your own. You have just been shown the old ways. The old ways do not work anymore. The Ira Smith Team makes use of new contemporary ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief now.

At Ira Smith Trustee & Receiver Inc., we take a look at your whole condition and layout a strategy that is as unique as you are. We take the load off of your shoulders as a part of the debt negotiation approach we will create just for you.

We understand that individuals facing financial troubles require a lifeline. That is why we can establish a restructuring procedure for you as well as end the pain you feel.

Call us now for a no-cost consultation. We will certainly get you or your business back on the road to a well balanced and healthy life and end the pain factors in your life, Starting Over, Starting Now.

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Brandon Blog Post

SEVERANCE PAY ONTARIO & BANKRUPTCY-BARRYMORE FURNITURE UNPAID WORKERS ANGRY

severance pay ontario

If you would prefer the audio version of this Brandon’s Blog or reading subtitles, please scroll to the bottom of this page and watch the picture at the bottom.

Introduction

On February 5, 2020, the Toronto Star wrote about the bankruptcy of Barrymore Furniture Co. Ltd. (Barrymore) titled “Barrymore Furniture has filed for bankruptcy — leaving a throng of angry, unpaid workers in its wake”. It talks about the sad story of this family-owned business going into bankruptcy. It also states that the workers will not receive termination pay, severance pay or benefits. For the record, my Firm is not involved in this bankruptcy file.

The purpose of this Brandon’s Blog is to describe the sad story of the Barrymore bankruptcy and what happens to severance pay Ontario (as well as other employee remuneration) when a company goes bankrupt. But first, a little primer.

Who is entitled to severance pay Ontario?

“Severance pay” is a settlement that is paid to a qualified employee who has their employment “severed.” When a long-term employee loses their job, it makes up an employee for losses (such as loss of standing) that happen.

Severance pay is not the same as termination pay. Termination pay is given instead of the called for notification of termination of work. Not everyone is entitled to severance pay.

A worker gets approved for severance pay if his/her employment is terminated and she or he:

  • has worked for the company for 5 or more years (whether continuous or not or active or otherwise) and
  • his/her employer:
    • has a payroll in Ontario of a minimum of $2.5 million; or
    • severed the employment of 50 or more workers in a six-month period because all or part of the company completely closed.

To determine the amount of severance pay Ontario a worker is entitled to receive, you multiply the employee’s normal wages for a normal week by the sum of:

  • the # of actual full years of employment; as well as
  • the # of completed months of employment divided by 12 for a year that is not finished.

The maximum amount of severance pay Ontario to be paid under the Employment Standards Act is 26 weeks.

The Barrymore bankruptcy

Barrymore was a Canadian producer, wholesaler and had a retail store of high-end furniture. It started in business in Toronto going back to 1919. On November 29, 2019, Barrymore tried a business restructuring by filing a Notice of Intention To Make A Proposal (NOI). On December 9, 2019, Barrymore sought and received, a Court Order enabling for an extension of time to submit a restructuring Proposal. Barrymore had until February 12, 2020, to submit its debt settlement plan and other necessary documents.

Barrymore failed to submit on time its cash flow statement, as called for by the Bankruptcy and Insolvency Act (Canada) (BIA). On January 17, 2020, Barrymore filed an Assignment in Bankruptcy.

Barrymore filed its NOI to try to accomplish a few things:

  1. Give it some breathing room from its creditors by invoking a stay of proceedings.
  2. Allow it to operate during the crucial holiday shopping season.
  3. Try to find a buyer for its business.

The post-NOI period

Once the NOI was filed, Barrymore began a sales process to try to find a buyer for the entire Barrymore business. Seventeen parties were identified as being potential purchasers. Only seven were interested in performing due diligence.

At the same time, the Proposal Trustee got proposals from two professional liquidators. They did that so in case no buyer closed a purchase of Barrymore, they could hit the ground running in liquidating the assets.

Unfortunately, nobody submitted an offer for Barrymore’s business. Hence, Barrymore’s bankruptcy.

Barrymore’s statement of affairs

The Barrymore sworn statement of affairs shows assets of $240,000. The assets are inventory ($200,000) and machinery and equipment ($40,000). Barrymore has 5 secured creditors for $4.3 million. The single largest secured creditor is its chartered bank with a claim of $3.7 million. Assuming the Bank’s security is good and in the first position, the estimated asset value of $240,000 won’t go very far!

The sworn statement of affairs also shows 118 unsecured creditors with claims of $3.2 million. So with total claims recorded in Barrymore’s books and records of $7.5 million and the books showing only $240,000 of assets, there is a huge imbalance. The family that owns the business is shown to be owed $1.7 million as an unsecured creditor. The former employees are also unsecured creditors.

With that financial imbalance, it is no wonder the licensed insolvency trustee (formerly called a bankruptcy trustee) in the Barrymore bankruptcy could not run the business. Instead, it received Court approval to enter into a liquidation agreement with one of the liquidators. The liquidation sale to the public has begun. Either the amount shown in the books for inventory value is too low, or, the liquidator has the authority to bring in new goods to put into the bankruptcy sale, or both. It is too much effort to go through for inventory worth so little compared to the Bank’s secured debt!

The employer went bankrupt did not pay employees

I don’t know what the real individual claims of each former employee might be, but it can include:

  1. Wages or salary
  2. Vacation pay
  3. Termination pay
  4. Severance pay
  5. Benefits

The Barrymore employees are members of the United Steelworkers Union. The Steelworkers Toronto Area Council represents the former Barrymore employees. Both the Union and the former employees are naturally quite upset over the bankruptcy.

“Once again, working people are victims of a rigged system that disregards their interests while giving priority to wealthy investors,” said Carolyn Egan, President of the Steelworkers Toronto Area Council. Her comment is understandable. However, based on the sworn statement of affairs, it does not look like any “wealthy investors” are getting paid.

Protecting employees from the bankrupt employer

The United Steelworkers and the Canadian labour movement as a whole have been lobbying for reforms to Canada’s bankruptcy and insolvency legislation for numerous years to give greater top priority to workers and pensioners.

I have written many blogs on the topic of how various federal politicians have put forward Bills to give workers and retirees more rights. Several bills proposing such reforms were provided previously in Parliament, but none made it into legislation by the Liberal federal government.

Rather, only some warm words and minor amendments relating to Director responsibilities were included in the last federal budget and passed. To put it bluntly, the Liberal federal government has rejected enacting legislation to protect workers and retirees when an employer enters insolvency proceedings.

The Liberal majority government showed no interest in any meaningful reform in the area of employee rights in bankruptcy or insolvency. Perhaps for their next budget, the minority government will be forced to look seriously at it.

What happens if my employer owes me money & goes bankrupt?

The BIA created a device for workers of a company that entered either bankruptcy or receivership and are owed money. It does not cover employees of a company trying to right-size itself through a restructuring proposal. The Wage Earner Protection Program Act (WEPPA) provides for wages or benefits, including termination and severance pay, accumulated in the 6 months prior to the business becoming bankrupt or placed right into receivership.

The WEPPA ended up being law due to the federal government’s previous concern that when employees experienced “the company went bankrupt and didn’t pay me wages” there was seldom an opportunity for employees to obtain any of their income owed. As discussed, shortly, there are limits to or caps on what employees may receive.

WEPPA calculation: Who cannot submit?

However, you do not qualify for WEPPA if, throughout the time for which amounts owed to you are past due, if you:

  • were a Director or Officer of the business;
  • had a management placement in the company; or
  • were management whose tasks included making financial decisions on the negotiation or non-payment of amounts owing.

WEPPA calculation Canada

You could qualify if:

  • your previous employer has really gone into bankruptcy or receivership; as well as
  • you have overdue wages, salary, vacation pay or unreimbursed costs from the firm throughout the 6 months prior to the date of bankruptcy or receivership.

The WEPPA gives funds to Canadian employees owed money when their employer enters into either bankruptcy or receivership. The WEPPA provides a punctual settlement of qualifying employee earnings. The quantity of the qualifying employee earnings is an amount equivalent to 7 times maximum regular insurable profits under the Employment Insurance Act. As of January 1, 2020, the maximum yearly insurable earnings amount is $54,200. This means that the max amount a former employee can claim under WEPPA is $7,296.17 in 2020.

Receivers and bankruptcy trustees are required to tell employees of the WEPPA program and provide workers information regarding amounts owing. From the day of bankruptcy or receivership, trustees, as well as receivers, have 45 days to send out Trustee Information Forms revealing the amounts owing to each of the workers.

So payment under WEPPA is something, but may not fully compensate each former employee. Of the amount paid by Service Canada, who administers the employment insurance system, the amount of $2,000 per employee paid out is a super-priority against the current assets of the company. The balance of amounts paid to each employee, up to the maximum, are unsecured claims.

So, in Barrymore’s case, the total of all the individual first $2,000 amounts paid to each former employee will rank in first place against the inventory at the date of bankruptcy. This claim ranks ahead of all listed creditors, even the secured creditors.

Wrapup

Have you lost your job due to the fact that your employer entered into bankruptcy or receivership? Were you a Director of a company that went bankrupt or into receivership and now you are being chased for statutory personal liabilities? Is your company in financial trouble and you just don’t know how to save it? Is the pain, stress and anxiety of excessive debt currently negatively affecting your health?

We understand your pain. We will certainly ensure that no bill collectors call you. We will take all the migraines, stress and anxiety you are experiencing off of your shoulders and place it onto ours. We will repair things so that you can march forward in a healthy and balanced way, pain-free, debt-free and guilt-free.

It is not your fault that you remain in this scenario. You cannot fix it on your own since you have actually only been shown the old methods. The old ways do not work anymore. The Ira Smith Team makes use of brand-new ways which will return you promptly to a hassle-free life while getting rid of your debt.

Get in touch with the Ira Smith Team today. We have decades as well as generations of experience helping people and businesses seeking financial restructuring and debt relief. As a licensed insolvency trustee, we are the only specialists certified and overseen by the Federal government to provide debt settlement and financial restructuring services.

We provide a totally no cost appointment to help you solve your issues. We understand your discomfort that your debt creates. We can also end that painful feeling right away from your life. This will certainly allow you to start afresh again. Call the Ira Smith Team today to ensure that we can begin assisting you as well as get you back into a healthy and balanced, stress-free life Starting Over Starting Now.

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Brandon Blog Post

FILING BANKRUPTCY VERSUS DEBT CONSOLIDATION IN TORONTO ONTARIO

filing bankruptcy versus debt consolidationIntroduction

Financial obligations of any kind of size can be stressful. Most of us have some existing debt. It is when debt is out of control that gives people problems. People with debt problems ask me for my opinion on filing bankruptcy versus debt consolidation. So, I thought I would share my thoughts with you.

What is debt consolidation?

The first step is understanding what debt consolidation is (and isn’t). Debt consolidation is a do-it-yourself strategy that you control. Debt consolidation is a form of debt restructuring that combines several loans into one, mainly for two reasons: (i) to lower the interest rate charged on your debt; and (ii) to lower your monthly payment amount.

When you have multiple debts to different creditors and loans to pay at varying interest rates, debt consolidation is an option that allows you to combine them into one loan at a lower interest rate. Debt consolidation can be a good plan, particularly if your credit is decent enough to land a new loan and if your new consolidated monthly debt repayment amount won’t overwhelm your monthly after-tax income.

Getting that new loan

Applications for debt consolidation are not always accepted. It will depend on the lender you chose to work with and what their lending guidelines for debt consolidation are. Overall, make sure you are open and honest about where you are financially and what your goals for debt consolidation are during your loan meeting. Because the purpose of debt consolidation is to lower the cost of debts, any additional fees the lender may add on top are not helpful.

The most common type of debt consolidation loan is an unsecured loan. It can also be accomplished through a home equity loan or even transferring credit card balances from high-rate cards to a lower-rate credit card.

One of the goals of debt consolidation is to get the lowest interest rate possible applied to your debts. It is a simple, safe, and effective way for people with excess debt to responsibly pay off their debts without filing for bankruptcy.

How does debt consolidation affect my credit score?

While it can save you money, it might negatively impact your credit score at first. However, it will make managing your bills easier, as you will only have one bill to pay each month. This method is a powerful way to take control of your bills, pay off your debts sooner and simplify your payments.

Eventually, your credit score will improve because you are paying off your debt with each monthly payment. Every month your lender is reporting to the credit bureaus that you are making your payments on time and living up to your obligations. This is a much better position to be in than your debts overwhelming you and not being able to afford your monthly payments.

The side benefits

Debt consolidation can help you pay off what you owe faster and more conveniently, with one payment instead of many. This process may offer the relief you are looking for. Remembering to make each payment at the right time on all your debts can be taxing for some people. This makes the concept of such a program that much more appealing.

Choosing the right solution for consolidation is highly dependent on your unique financial situation. In most cases, if consolidation is the right option in your financial situation, then there shouldn’t be too many downsides to using the process in general. If you are overwhelmed by keeping up with multiple bills and loans, it will be able to help. Reviewing your current debts and total income will also help you determine exactly what your financial goals should be. It will also start to get you thinking about saving for your future also.

It is not the same as debt settlement

Consolidating your debts is not the same as a debt settlement negotiation. Consolidation reduces the number of financial institutions for your financial debts. Settlement will use an authorized credit counsellor to bargain with lenders in your place.

I have previously written about the dangers of using a debt settlement company. For example, you can read about it in my blog HOW DOES DEBT RELIEF WORK: APPARENTLY NOT GREAT 4 EVERYONE.

There is only one debt settlement program in Canada that is sanctioned by the federal government. It is called a consumer proposal and can only be administered by a licensed insolvency trustee (formerly called a bankruptcy trustee) (Trustee). To read all about how a consumer proposal works to avoid bankruptcy, read my blog WHAT IS A CONSUMER PROPOSAL? OUR INSOLVENCY FAQ PRIMER.

Filing for bankruptcy

The bankruptcy process varies based upon whether or not you have previously been bankrupt and if you do or don’t have surplus income. An important attribute of personal bankruptcy is that a freeze or automatic stay is placed on all collection actions against you. The automatic stay initially includes repossession. Although you have to be able to pay your expenses going forward, the basic needs for a living cannot be denied to you because of your bankruptcy.

Debt consolidation cannot secure you from collection actions. But, either a consumer proposal or bankruptcy does invoke that automatic stay. While bankruptcy will initially harm your credit score, it ultimately will discharge you from your financial obligations. This positions you in the most effective way to start rebuilding a good credit rating.

Just like in a consumer proposal, only a Trustee can administer a bankruptcy. In a bankruptcy, the Trustee will need to take possession of your assets, other than those that are exempt under provincial law.

To find out more about the bankruptcy process, check out our TOP 20 PERSONAL BANKRUPTCY FAQS.

Filing bankruptcy versus debt consolidation: Is it better to file bankruptcy or do debt consolidation?

It is of course always better to avoid bankruptcy. Figuring out which alternative is much better for you will ultimately rely on your unique scenario. So, you should meet with a Trustee for a no-cost consultation to get advice on all of your options, tailored specifically to your financial situation. Filing bankruptcy versus debt consolidation is a serious decision. It should only be made with the assistance of professional Trustee help.

I hope you found this Brandon’s Blog, filing bankruptcy versus debt consolidation, useful.

Do you have too much debt? Are you in need of financial restructuring? The financial restructuring process is complex. The Ira Smith Team understands how to do a complex restructuring. However, more importantly, we understand the needs of the entrepreneur or the person who has too much personal debt. You are worried because you are facing significant financial challenges.

It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief freedom.

The stress placed upon you is huge. We understand your pain points. We look at your entire situation and devise a strategy that is as unique as you and your problems; financial and emotional. The way we take the load off of your shoulders and devise a debt settlement plan, we know that we can help you.

We know that people facing financial problems need a realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team. That is why we can develop a restructuring process as unique as the financial problems and pain you are facing. If any of this sounds familiar to you and you are serious in finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.

Call us now for a free consultation. We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

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Debt problems: 8 Mistakes To Avoid When You Are Having Money Problems

debt problemsIntroduction

I have advised many entrepreneurs and non-business people who have debt problems. Many times, there are things they have done before coming to see me for a no-cost consultation that I wished they had not done. So, I thought I would discuss the 8 mistakes to avoid when you are having money problems.

1. Using money from your RRSP to pay debts

This can be a costly error. Using retirement funds to pay off debts can hurt you in numerous ways. The vast majority of retirement accounts are exempt. This means your creditors cannot get at them and you won’t lose them if you file for a consumer proposal or for bankruptcy (“an insolvency filing”).

Using retirement money to pay debts that can be discharged in an insolvency filing, like credit card and income tax debt, rarely makes sense. If you make an insolvency filing, you can eliminate the debt without spending any of your retirement funds. Using retirement funds to pay debt jeopardizes your future when you will be in more need of the funds due to lack of other income.

The withdrawal from the RRSP counts as income on which you will owe taxes and possibly even an early withdrawal penalty. Depending on how large the amount is, the added income and related income tax debt could affect the nature of your insolvency filing, the total amount you will still have to pay and provide problems with your discharge from bankruptcy.

2. Paying unsecured debts like credit cards, income tax and personal instead of secured debts like mortgages and car loans

Some creditors are so aggressive and sometimes predatory that they make you think that you must pay off their debts immediately or suffer severe consequences. Frightened by these tactics you may be tempted to pay their unsecured loans first and leave a secured loan unpaid. This creates multiple problems.

The two most common types of property subject to a security interest are probably the two most important things you own: your home and your car. A car loan creditor can repossess a car after one missed payment. If that occurs, you will lose your car and you will be responsible for any deficiency amount you still owe on your car loan after the car is auctioned off usually for significantly less than it is worth.

While a mortgage lender may not be able to kick you out of your home as quickly, arrears, a higher arrears rate of interest that kicks in upon default and late fees can significantly increase what you owe and make it very difficult to catch up. As a general rule, you should prefer to pay your secured creditors so you can keep your car and home, as opposed to paying unsecured creditors who don’t have near the recourse that a secured creditor has. This assumes that you will be able to afford the car and mortgage payments after we help you eliminate your debts and balance your budget.

In addition, if you decide to make an insolvency filing, the money paid to your unsecured creditors might as well have been thrown in the trash. Meanwhile, you will still have to catch up on your secured debts if you want to keep the property.

Finally, you might have to explain to the licensed insolvency trustee why you were able to pay certain creditors, but not others, so close to the filing. Such payments may be considered preferences that the trustee can force the creditor to return in a bankruptcy. It is always better to avoid such a problem and keep your secured debts current, even if you have to neglect the unsecured ones.

3. Maintaining accounts at a bank or other financial institution where you owe money

Almost every bank and financial institution will require you to sign an agreement authorizing the bank to automatically garnish your account if you miss a payment owed to it. In other words, if you have your mortgage and a savings account at the same bank and you miss a mortgage payment, the bank can take it from your savings account. This is called a setoff.

You should transfer your accounts, other than for the one account need to pay your monthly loan payment, to another institution where you don’t owe money to avoid this situation. You can keep a minimum amount in that one account and replenish it monthly so you can’t lose much in case of a setoff.

4. Using a second mortgage or home equity line of credit to pay off credit cards or other unsecured debt

As mentioned previously, credit card and other unsecured debt can be discharged in an insolvency filing. If you don’t make your mortgage payments, you could lose your home.

If the amount you borrow against your home doesn’t get you out of debt, you may have no choice but to end up not being able to afford the higher payments, in bankruptcy, having wasted money that could have been used elsewhere. To make matters worse, you have allowed a second lien against your home, which increases your monthly expenses and the length of time before you are able to pay your home off. In addition, the second mortgage, is a secured debt, will not be dischargeable in an insolvency filing and you may end up losing your home.

Don’t fall for the advertisements that suggest you consolidate your debts with a home equity loan. This strategy only makes sense after you have seen a licensed credit counsellor and have created and understood your balanced budget. The licensed insolvency trustees at Ira Smith Trustee & Receiver Inc. are also licensed, credit counsellors.

5. Not filing your tax returns

If you do not file your tax returns on time, you will have an issue if you make an insolvency filing. Your case will not be closed and your debts will not be discharged until you file your missing income tax returns with the Canada Revenue Agency (“CRA”) and they have a chance to review it. The CRA will not allow you to get through the insolvency filing without ensuring your returns have been filed.

It will also be impossible for us to properly advise you on whether you can avoid bankruptcy through a consumer proposal because will not know the total amount you owe to CRA. You always need to bring your income tax filings current BEFORE making an insolvency filing. Better not to have this problem delay a filing when you really need to protect yourself immediately at that time.

6. Telling a creditor that you intend to pay

When you have debt problems, it is always best not to say anything to a creditor than to promise the creditor that you will pay. Once you tell creditors to expect money, their harassment will grow every day they don’t receive the promised money.

7. Making a written promise to pay or making a partial payment on an old debt

Creditors are barred from collecting a debt once the limitation period has run. The limitation period on a particular unsecured debt incurred in Ontario is 2 years. Making a written promise to pay or making a partial payment on the debt (no matter how small) may reset the clock on the creditor’s ability to take legal action.

8. Ignoring pending lawsuits

Pending lawsuits on debts is an obvious sign that you have debt problems. Ignoring pending lawsuits is a huge mistake as these lawsuits lead to judgments. Upon receiving a judgment, the creditor will be able to garnish your wages and freeze your bank accounts.

If you are sued on a debt, it’s wise to at least consult a lawyer. You may have legal defenses. It is normally best to make an insolvency filing either before or immediately upon a judgment being made against you. That way, the creditor who received the judgment cannot enforce against your wages or bank accounts. You are protected in an insolvency filing by an automatic stay of proceedings.

Debt problems summary

I hope you found this Brandon’s Blog, What is a Consumer Proposal, helpful. Sometimes things are too far gone and more drastic and immediate triage action is required.

Do you have too much debt? Are you in need of financial restructuring? The financial restructuring process is complex. The Ira Smith Team understands how to do a complex restructuring. However, more importantly, we understand the needs of the entrepreneur or the person who has too much personal debt. You are worried because you are facing significant financial challenges.

It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief freedom.

The stress placed upon you is huge. We understand your pain points. We look at your entire situation and devise a strategy that is as unique as you and your problems; financial and emotional. The way we take the load off of your shoulders and devise a debt settlement plan, we know that we can help you.

We know that people facing financial problems need realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team. That is why we can develop a restructuring process as unique as the financial problems and pain you are facing. If any of this sounds familiar to you and you are serious in finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.

Call us now for a free consultation. We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

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WHAT IS A CONSUMER PROPOSAL? OUR AMAZING EXCELLENT INSOLVENCY FAQ PRIMER

what is a consumer proposal
what is a consumer proposal

What is a consumer proposal introduction

Let us start with a what is a consumer proposal definition: A consumer proposal is a formal binding offer made to your creditors to settle your debt for less than the full amount owing.

To help you decide if a consumer proposal is the right option for you, I will provide answers to the most frequently asked questions I receive about what is a consumer proposal in Canada.

What is a consumer proposal?

A consumer proposal is a government-regulated debt settlement program filed with a Licensed Insolvency Trustee (Trustee). The purpose of filing one is to get rid of problem debt so that you can start the process of rebuilding your credit debt-free.

It can only be filed with the Trustee. When you sign your documents, they are then filed with the federal government. It is a legal process under the Bankruptcy and Insolvency Act (Canada) (BIA).

This process is a legal agreement between you and your creditors to repay part of the debt that you owe. If a simple majority, in dollars, of creditors agree to the terms you have offered, then your proposal is binding on all your unsecured debts.

What is a consumer proposal? It is a court-sanctioned process that allows you to negotiate a settlement with your unsecured creditors. This kind of arrangement does not deal with secured creditors.

What is a consumer proposal: Is it worth it?

I would say definitely yes. A successful restructuring is binding on all unsecured creditors. It is a legally binding deal between you and your creditors if the offer is accepted. A consumer proposal is the ideal debt repayment plan for individuals who are able to repay a portion of their debts, but not the full amount.

What is a consumer proposal? This consumer proposal process is a way to avoid filing bankruptcy by making a deal with your creditors to repay a portion of what you owe. If you have high or even just regular monthly income, it is a more sensible option to eliminate your debt obligation than to file for bankruptcy. This process results in a legally binding agreement between you and your creditors that allows you to settle your unsecured debts at a much lower rate, interest-free, over an extended period of time.

The Trustee’s motivation in a consumer proposal is to find a common sweet spot. A number is high enough that it is a better alternative for your creditors than your bankruptcy. A number that the creditors will likely accept yet still a number low enough that it is affordable for you to pay each month.

A consumer proposal is often the way of achieving that objective. In fact, the number one advantage is that you get to keep all assets. Such a proposal can last up to a maximum of 5 years. It is a debt relief solution that allows you to significantly reduce your debt and repay a portion without interest while keeping your assets. That is what is a consumer proposal.

What is a consumer proposal? How do you qualify for one?

A consumer proposal is for individuals who are able to make payments to creditors (either monthly or as a lump sum), but need to change the current arrangement of their payments.

You can file one if you are a person who owes $250,000 or less in unsecured debt.

The big difference between bankruptcy and this kind of restructuring plan is the monthly payment. Once the negotiation is complete and the arrangement agreed to, you make a single payment each month while the proposal is running.

The consumer proposal is one of the most frequently used options for getting out of debt in Canada. If you and your Trustee determine that a proposal is better for your financial situation than bankruptcy or any other debt relief option, you and your Trustee will begin to craft a settlement offer. Your offer will be reviewed by your creditors.

A consumer proposal is typically the preferred alternative to bankruptcy, both in terms of financial affordability and credit ratings. Part of deciding whether bankruptcy or a debt settlement is right for you is knowing what kinds of debts can be included and will be discharged when the process is successfully completed.

A consumer proposal does not deal with secured creditors. Filing one can make keeping up with your mortgage or car loan more affordable. This assumes that in your monthly budget, you can afford to keep them. If not, you will have to give them up to be able to get ones that you can afford. This process does NOT affect the mortgage on your principal residence or a secured car loan. That is what is a consumer proposal is not.

A proposal is an agreement made between the Trustee and your creditors. Through a legally-binding document, it requires you to pay off a percentage of your debts and/or extend the time you need to pay off your debts in full. For those who cannot afford to repay their debts, it is the best debt consolidation program available. If you are looking for debt relief, this is a better option.

For most people, a consumer proposal is a more attractive alternative to bankruptcy; however, it is still considered a form of the insolvency process. For Canadians seeking debt relief, it is an option for insolvent debtors that isn’t as severe as filing for bankruptcy. During your initial no-cost consultation, your Trustee will explain all your debt relief options to determine which one is the right solution for you.

The Trustee acting in your consumer proposal acts as the Administrator. Within ten days after filing with the official receiver, the Administrator will prepare a report containing the results of its investigation, the Administrator’s opinion as to whether the consumer proposal is fair and reasonable to the creditors and the debtor, and whether the consumer debtor will be able to perform it.

If the documents have been successfully filed, accepted by your creditors, court-approved, and then paid through completion, a certificate is given indicating the full performance of the proposal to you and the Official Receiver.

What is a consumer proposal? What does it do to your credit?

Getting out of debt with a consumer proposal is often the first step to rebuilding credit. As with any repayment program, including a debt management plan, this process will for a short while lower your credit score. However, most clients see an improvement in their credit scores shortly after completing the program.

For those who don’t want to go through the bankruptcy process, or want to keep more of their assets, the proposal is less invasive. A proposal is combined with mandatory credit counselling. Trustee fees come out of any monies paid to creditors. If you are unable to repay all of the unsecured debt that you owe but have a steady job and income you could find that a proposal is a viable alternative to bankruptcy.

Once your consumer proposal is completed, you are in the next phase of taking control of your finances.

A proposal is a viable alternative if you have significant surplus income or assets you want to keep. A proposal is a legal proceeding under the BIA that provides a stay of proceedings that immediately stops all creditor actions. This includes most wage garnishments and calls from creditors and collection agencies. If you are dealing with creditor calls or being threatened with legal action, this debt settlement process can help you eliminate your debts and stop dealing with those creditors again.

Payments in a consumer proposal are negotiated upfront. The duties required in a proposal are less than those in bankruptcy. A proposal has fewer required duties than bankruptcy. As you can see, it is a viable way to eliminate all your overwhelming unsecured debt and get your life back on track.

A consumer proposal is also something to consider if your debts are higher than $10,000 and your monthly payment under a debt management plan may be too high for you to afford. Your monthly payment on your consumer proposal is remitted to your creditors once all applicable fees have been paid.

A consumer proposal will eliminate income tax owing

For spouses, if your debts are generally common, you can make a joint consumer proposal. If such a joint filing is made, the unsecured debt threshold increases to $500,000.

A consumer proposal is the only method that can be used to negotiate a reduced balance owing to taxes to the Canada Revenue Agency. A consumer proposal is a safe and reliable way to get out of debt but it can also be the cheapest in terms of monthly payments. The consumer proposal will only include taxes owed from tax returns that were filed prior to the proposal date.

Because each personal situation is unique, the benefit of what is a consumer proposal is that it can be tailored specifically to meet your needs. This is the only government-approved debt settlement option for resolving your debts in Canada, besides filing an assignment in bankruptcy. A consumer proposal is an option to negotiate repayment terms with your creditors through the Trustee, for much less than what you owe today.

No matter what stage in this process you may be at (even if you are still considering one), you probably have questions about what to expect after your consumer proposal is finished. A consumer proposal is a little better than a bankruptcy with regard to your credit score. A consumer proposal is an R7 rating and a bit of an improvement in exchange for the effort of repaying a portion of what you owe. A successful consumer proposal will actually help you avoid bankruptcy.

Another advantage of an arrangement like this is that your Trustee is often able to negotiate greater principal and interest reductions than you could on your own. What sets this plan apart from paying the minimum payments to your creditors on your own is the fact that a consumer proposal includes freezing your interest payments and an agreement that your creditors will consider your debts paid in full for less than what you actually owe.

A consumer proposal is a very commonly used way to settle your debts, without declaring bankruptcy, (or filing for full bankruptcy, as it is referred to by many of our clients). The consumer proposal is a very powerful legally binding way to settle your debts, which normally puts an end to garnishments and other legal actions against you, stops collection calls, and allows you to maintain control of your assets.

Is a Consumer Proposal Right for You?

This is an exceptional program for individuals, families, and sole proprietors who are facing financial hardship and need a practical solution to their debt problems. This process has no hidden fees. While a consumer proposal often lasts longer than bankruptcy proceedings, the total cost to you may be less because you retain your assets and there are no surplus payments.

A consumer proposal is a viable option to deal with small business debts in a proprietorship if the total debts do not exceed $250,000. This program does not deal with debts owed by an incorporated business. It is one of the best, and safest, debt consolidation options available.

What is a consumer proposal good for? It is a great way to take advantage of many of the advantages of bankruptcy without the severe drawbacks such as the loss of assets you must endure during the bankruptcy process. All of your assets are protected from a seizure when your consumer proposal is accepted, and the more you can offer your creditors, the greater the likelihood that they will accept your proposal, thereby allowing you to keep all your assets.

Both bankruptcy and consumer proposals are debt relief options allowing those who are in a significant amount of debt to get out from under what they owe. However, the consumer proposal is far less disruptive to their lives.

Deciding to file a consumer proposal is about dealing with your debt, but I understand that you may be concerned about the impact a consumer proposal has on your credit report.

If your financial situation is such that budgeting or refinancing cannot resolve your ongoing financial crisis, a consumer proposal is one of the options under the BIA to resolve your debts. A consumer proposal may be the best way to help you avoid bankruptcy and achieve real relief from your outstanding debts.

Each situation is different. Each program is tailored to fit the budget and circumstances of each person. The payments you make are then divided among your unsecured creditors. As with bankruptcy, one of the immediate pros of entering such a debt settlement program is that it stops wage garnishments.

Even during the time that this debt settlement process is noted on your credit history, it may still be possible to obtain new credit, including renewal of ongoing commitments such as your mortgage, financing the purchase of a new vehicle, or even a credit card. For consumers who worked seasonally or have fluctuating income, a consumer proposal can be structured so that higher payments are made during peak earning times and lower payments are made during low earning times. Individuals who file a consumer proposal must complete two mandatory financial counselling sessions with a qualified insolvency counsellor.

What is a consumer proposal summary

I hope you found this Brandon’s Blog about what is a consumer proposal helpful. Sometimes things are too far gone and more drastic and immediate triage action is required.

Do you have too much debt? Are you in need of financial restructuring? The financial restructuring process is complex. The Ira Smith Team understands how to do a complex restructuring. However, more importantly, we understand the needs of the entrepreneur or the person who has too much personal debt. You are worried because you are facing significant financial challenges.

It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief freedom.

The stress placed upon you is huge. We understand your pain points. We look at your entire situation and devise a strategy that is as unique as you and your problems; financial and emotional. The way we take the load off of your shoulders and devise a debt settlement plan, we know that we can help you.

We know that people facing financial problems need realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team. That is why we can develop a restructuring process as unique as the financial problems and pain you are facing. If any of this sounds familiar to you and you are serious in finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.

Call us now for a free consultation. We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

what is a consumer proposal
what is a consumer proposal
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Brandon Blog Post

TRUSTEES IN BANKRUPTCY TORONTO ONTARIO USUALLY FORBIDDEN TO DIG THIS

trustees in bankruptcy toronto ontario
trustees in bankruptcy Toronto Ontario

Trustees in bankruptcy Toronto Ontario introduction

On April 15, 2019, a group of companies operating as QuadrigaCX (Quadriga) became bankrupt. This followed their initial application under the Companies’ Creditors Arrangement Act (CCAA) to get bankruptcy protection.

The purpose of this Brandon’s Blog is to describe the latest events in this ongoing saga. Especially something trustees in bankruptcy Toronto Ontario usually don’t dig this.

What was Quadriga

Quadriga operated a crypto money exchange permitting customers to save, get, and offer various cryptocurrencies (including Bitcoin, Bitcoin Cash Money, Bitcoin Cash SV, Litecoin and Ethereum) on the Quadriga platform.

The cryptocurrency industry is not regulated in Canada and there is no governing body giving oversight.

Canadian chartered banks generally do not supply financial services such as bank accounts to companies operating in the cryptocurrency sector. This held true at Quadriga who needed the solutions offered by Third-Party Payment Processors (TPPP) to provide Quadriga’s treasury functions.

TPPP’s utilize various banking facilities in many countries around the globe. It can be very difficult to trace the flow of funds. Especially if the TPPP purposely sets up an international flow of funds through various intermediaries. We found this when we administered the bankruptcy of Conquest Vacations Inc. (Conquest).

No Canadian or US TPPP would clear Conquest’s credit card transactions. So, Conquest entered into an arrangement with a UK TPPP who utilized, amongst other banks, a financial institution in Mauritius. Our ability to trace the flow of funds with a high level of accuracy was thwarted in that case.

Quadriga was started by Mr. Gerald Cotten. It is reported that he died at. the age of 30 from complications from Crohn’s disease. At the time of his reported death, he was travelling in India.

Apparently, Mr. Cotten was the only person who knew the passwords associated with all the wallet addresses holding cryptocurrency.

Various issues faced by Trustees in bankruptcy Toronto Ontario

The Trustee was unable to find any documentation or other information regarding passwords. The Trustee also was unable to locate conventional books and records. The Trustee was not able to locate basic company records or accounting records.

There were also no records found documenting the location of Quadriga’s cryptocurrency and money reserves between third party settlement processors, savings account, wallet addresses and other third-party exchanges.

There also appeared to be no segregation of assets between funds of Quadriga and its customers. This would make it extremely difficult in any bankruptcy administration for trustees in bankruptcy Toronto Ontario or anywhere else in Canada.

The Trustee found that a substantial volume of cryptocurrency from Quadriga’s platform was transferred to competitor exchanges, some of which were transferred into personal accounts controlled by Mr. Cotten.

Additionally, significant amounts of cryptocurrency were moved to wallet holders whose identification was impossible to identify.

trustees in bankruptcy Toronto ontario
trustees in bankruptcy Toronto Ontario

Gerald Cotten enrichment found by Trustees in bankruptcy Toronto Ontario

It turns out that the cryptocurrency of Quadriga’s customers was taken off the Quadriga system to other third party exchanges and traded on those exchanges.

In other situations, cryptocurrency and its resultant cash were utilized for a margin trading account established by Mr. Cotten. Trading losses sustained and also incremental fees charged by exchanges negatively affected Quadriga’s cryptocurrency books.

Mr. Cotten created particular accounts on the Quadriga system under pen names where it appears that make-believe cryptocurrency and cash funds were deposited and used to trade within the Quadriga platform.

This resulted in inflated revenue numbers and ultimately the withdrawal of customers’ cryptocurrency. Substantial funds were moved to Mr. Cotten directly and various other associated accounts. This resulted in a substantial amount of cash and cryptocurrency reserves that could not be located.

The Trustee’s examination revealed that Mr. Cotten occasionally moved substantial cryptocurrency as well as various other funds outside of Quadriga. In certain instances, these transfers were for considerable amounts of currency routed to Mr. Cotten directly. Funds were used to fund personal costs and also the purchase of various personal assets.

In various other cases, transfers were made straight to his wife, Jennnifer Robertson. Funds were also used to pay personal expenses and to purchase personal assets both in her name or the name of companies which she controlled.

The trustees in bankruptcy Toronto Ontario settlement with Jennifer Robertson

Ms. Robertson has offered the Trustee a settlement offer that involves returning the majority of her possessions, the assets of Mr. Cotten’s Estate and also the assets of entities owned by Ms. Robertson or the Estate to the Trustee.

Negotiations have led to a settlement agreement acceptable to the Trustee. The Trustee was of the view that a negotiated settlement was more effective than ongoing litigation.

The settlement arrangements were substantial and conducted at arm’s length. The Trustee sought and obtained the agreement of the Inspectors in the Quadriga bankruptcy administration.

The settlement to transfer almost all of the assets owned by Ms. Robertson, the various companies and the Estate was also approved by the Court. So everything seems to be going smoothly, right?

Trustees in bankruptcy Toronto Ontario usually don’t dig this!

Not quite. On Friday, December 13, 2019, the legal team representing individuals who were users of the platform in these bankruptcy proceedings and who have lost collectively millions of dollars, sent a letter.

The letter went to the Royal Canadian Mounted Police seeking an exhumation and also post-mortem autopsy be performed on the body. The reason is to confirm both its identity as well as the cause of death.

They say information revealed during the proceedings, even more, highlights the requirement for assurance around the concern of whether Mr. Cotten is in fact deceased.

I don’t know why these lawyers feel that proving Mr. Cotten is in fact dead is so important. Maybe they feel that anyone who would give up substantially all of her assets, the Estate’s assets and related companies’ assets, must have more money somewhere else hidden.

Maybe they think that Mr. Cotten faked his own death, has millions of dollars that still have not been found and the two will reunite once the heat is off. I don’t know why, but this certainly is an unusual turn of events in a bankruptcy administration.

It is certainly something that trustees in bankruptcy Toronto Ontario or anywhere else in Canada don’t dig!

We will have to see how this saga unfolds and if there will be any more surprises.

Summary

I hope you found this Brandon’s Blog, Trustees in bankruptcy Toronto Ontario usually don’t dig this interesting. Sometimes things are too far gone and more drastic and immediate triage action is required.

Do you have too much debt? Are you in need of financial restructuring? The financial restructuring process is complex. The Ira Smith Team understands how to do a complex restructuring.

However, more importantly, we understand the needs of the entrepreneur or the person who has too much personal debt. You are worried because you are facing significant financial challenges.

It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief freedom.

The stress placed upon you is huge. We understand your pain points. We look at your entire situation and devise a strategy that is as unique as you and your problems; financial and emotional. The way we take the load off of your shoulders and devise a debt settlement plan, we know that we can help you.

We know that people facing financial problems need a realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team. That is why we can develop a restructuring process as unique as the financial problems and pain you are facing.

If any of this sounds familiar to you and you are serious about finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.

Call us now for a free consultation. We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

trustees in bankruptcy Toronto ontario
trustees in bankruptcy Toronto Ontario
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