Tag: BIA

#VIDEO – HOW MUCH DO YOU HAVE TO OWE TO FILE BANKRUPTCY?#

Post author By Brandon Smith
Post date June 29, 2016

HOW MUCH DO YOU HAVE TO OWE TO FILE BANKRUPTCY –

NOT MUCH!

We are always asked, how much do you have to owe to file bankruptcy? The real question is, here are my assets and my debts, what are my options? In Canada, the Bankruptcy and Insolvency Act (Canada) (“BIA”) states that you must owe at least $1,000 of unsecured debt to file for bankruptcy. The same holds true if someone owes you money. They must owe you at least $1,000 on an unsecured basis to apply to the Court to make an Order judging a person or company into bankruptcy. As you can see, the threshold is not very high.

HOW MUCH DO YOU HAVE TO OWE TO FILE BANKRUPTCY –

ARE YOU INSOLVENT?

Facing serious financial difficulties is devastating, especially if you believe that personal bankruptcy is your only option. In fact many people mistakenly believe that dire financial problems automatically mean personal bankruptcy. If you are having problems meeting your financial obligations or have stopped meeting those financial obligations as they come due you are actually insolvent, not bankrupt. Insolvent is a financial condition; bankruptcy is a legal state.

Bаnkruрtсу is a legal рrосеѕѕ under the BIA that helps you to resolve уоur debts if they have become unmanageable. If you have relatively few assets and low іnсоmе and dесіdе to file for bаnkruрtсу, you will probably fіlе under the shortened Summary Administration part of the BIA. If you have realizable assets that will produce a value greater than $10,000, then your bankruptcy would be administered under the general administration provisions. Don’t worry about these distinctions now. For now, just know that the streamlined summary administration rules is a simpler process, and the Superintendent of Bankruptcy sets the cost of the bankruptcy administration.

HOW MUCH DO YOU HAVE TO OWE TO FILE BANKRUPTCY –

THE BANKRUPTCY PROCESS

In either case, you will turn over to your Licensed Insolvency Trustee (“LIT”) all of уоur рrореrtу that is not exempt (protected) by law. The LIT will sell your property and the proceeds used to рау for the bankruptcy administration and then to distribute to уоur сrеdіtоrѕ.

If you have very little property, all of it might be рrоtесtеd so that you will not lose it. How much уоur сrеdіtоrѕ will get in this process dереndѕ on how much уоur unрrоtесtеd property sells fоr and whether you must pay “surplus income” to your LIT.

The last step of your bankruptcy process, will be to get your discharge from your debts, meaning that you will not have to рау them all (with certain exceptions).

HOW MUCH DO YOU HAVE TO OWE TO FILE BANKRUPTCY –

SEE A TRUSTEE EVEN IF YOU DO NOT WANT TO GO BANKRUPT!

People think that they should only see a LIT if they need to file for bankruptcy. Every LIT will give you a free 1 hour consultation, to go over your situation and offer you your available options. The topics the LIT will discuss with you are:

As you can see, bankruptcy is only one of many topics discussed, in determining what your options are, allowing you to choose the one that makes the most sense to you. No other professional can discuss this full range of topics with you, and especially not for free!

WHAT SHOULD YOU DO IF YOU OR YOUR COMPANY HAS TOO MUCH DEBT?

If you’re dealing with serious financial issues, contact a trustee, who is the Canadian bankruptcy expert. For the reasons already given, you should do this whether or not you’re contemplating bankruptcy. The reason is very simple: the licensed insolvency trustee will assess your situation, offer you all of your available options and will do this for you for free! You can’t find a better deal anywhere.

We’re not only bankruptcy experts; we’re experts in dealing with debt. Contact Ira Smith Trustee & Receiver Inc. today for a free consultation and you will be well on your way to regaining your former quality of life Starting Over, Starting Now.

THIS VLOG WAS INSPIRED IN PART BY OUR eBOOK – PERSONAL BANKRUPTCY CANADA: Not because you are a dummy, because you need to get your life back on track

Tags Bankruptcy, bankruptcy alternatives, Bankruptcy and Insolvency Act, bankruptcy process, BIA, Consumer Proposal, credit counselling, credit rating, debt conslidation, debts, file bankruptcy, how much do you have to owe to file bankruptcy, insolvent, Ira Smith Trustee, licensed insolvency trustee, personal bankruptcy, rebuilding credit, trustee

Brandon Blog Post

#VIDEO – BANKRUPTCY INFORMATION ONLINE: WHAT EVERY CANADIAN OUGHT TO KNOW#

Post author By Brandon Smith
Post date May 25, 2016

Is there bankruptcy information online?

There is a large amount of bankruptcy information online. Just go to the website of any Licensed Insolvency Trustee or bankruptcy lawyer. There is information about:

Canadian bankruptcy
the Canadian Bankruptcy Act (BIA)
general insolvency information

The Ira Smith Trustee website

On our website, you will find bankruptcy information online such as:

personal insolvency information about bankruptcy alternatives and bankruptcy
information on corporate insolvency and restructuring and turnarounds
case study information for our high-profile cases
our standard personal bankruptcy intake form called our Debt Relief Worksheet
other required forms
our list of information in the form of bankruptcy faqs
information about our eBook: PERSONAL BANKRUPTCY CANADA: Not Because You Are A Dummy, Because You Need To Get Your Life Back On Track
our video the 12 THINGS A LICENSED INSOLVENCY TRUSTEE MAY NOT TELL YOU
our blog we publish every Tuesday and our vlog video we publish every Thursday

The other source for information online

You can also find relevant bankruptcy information online at the Superintendent of Bankruptcy Canada website.

To take action you have to take it offline

Once you have gotten the online information, to take action, you need to take it offline. It is not possible in Canada to file online yourself.

To file either a consumer proposal to make debt settlement or bankruptcy, you need to select a Licensed Insolvency Trustee. A Licensed Insolvency Trustee administers the insolvency process in Canada.

The 10 Step Program of the Canadian Insolvency System

Meet with a trustee to talk about your personal situation and your options.
Work with the trustee to complete the required forms.
The trustee filing your consumer proposal or bankruptcy and notifying your creditors.
You attend a meeting of creditors if required.
You attend two counselling sessions.
Subject to your provincial exemptions, the trustee sells your assets; you may also have to make surplus income payments to the trustee.
In certain circumstances, you may have to attend an examination by an officer at the OSB.
The trustee prepares a report to the OSB describing your actions during the bankruptcy.
You attend the discharge hearing if required.
Your discharge and then the trustee completes the administration.

This is why to take action in the Canadian insolvency system you have to take it offline

How To Take Action To Achieve Debt Settlement

If you’re in deep financial difficulties and are looking for a way out, there is help for you. You need help from experts in debt – professional trustees.

We are:

regulated by the Canadian government, as are our fees;
licensed and have undergone a background check by the RCMP;
subject to a stringent code of ethics; and
required to maintain our competence by completing ongoing mandatory professional development each year.

Are you an individual or company who feels your situation is hopeless? Ira Smith Trustee & Receiver Inc. can prepare and put in place the plan MADE JUST FOR YOU. The plan will free you from the burden of your financial challenges. With our help, you will go on to live a productive, stress-free, financially sound life.

Contact Ira Smith Trustee & Receiver Inc. today. Starting Over, Starting Now you can free yourself from debt.

THIS VLOG WAS INSPIRED IN PART BY OUR eBOOK – PERSONAL BANKRUPTCY CANADA: Not because you are a dummy, because you need to get your life back on track

bankruptcy information online

Tags assignment in bankruptcy, Bankruptcy, bankruptcy alternaties, bankruptcy faqs, bankruptcy forms, bankruptcy information online, BIA, canadian bankruptcy act, Consumer Proposal, corporate insolvency, Ira Smith Trustee, personal bankruptcy canada, PERSONAL BANKRUPTCY CANADA: Not Because You Are A Dummy, personal insolvency, restructuring and turnaround, Superintendent of Bankruptcy

Brandon Blog Post

#VIDEO-ALTERNATIVES TO BANKRUPTCY: DO NOT BE EMBARRASSED TO HAVE THE “B” CHAT#

Post author By Brandon Smith
Post date May 11, 2016

Introduction of the alternatives to bankruptcy

There are alternatives to bankruptcy. Say the word bankruptcy and people immediately recoil. I don’t know if there is more stigma attached to another word in the English language. In reality bankruptcy is not something to be ashamed of. It should not be avoided at all costs and it’s not a deep dark hole; it can be the light at the end of the tunnel. As with other alternatives to bankruptcy, it is an option. Let’s explore why avoiding bankruptcy can do more harm than good.

Many реорlе аѕѕumе thеrе’ѕ only оnе tуре of bankruptcy. The one that еlіmіnаtеѕ all уоur debts. Thаt’ѕ a BIG rеаѕоn реорlе ѕау things like, “I wоuld never dесlаrе bаnkruрtсу! It just dоеѕn’t seem to be the responsible thing to do. Right?”

What mоѕt реорlе don’t know іѕ that there are TWO tуреѕ of BIA proceedings for іndіvіduаlѕ. One is bankruptcy and the other is an alternative to bankruptcy. The alternative is a (consumer) proposal. The reason you would pick the alternative is to AVOID bankruptcy.

Two tуреѕ of BIA proceedings

Thеѕе two types of BIA proceedings are іntеndеd to асhіеvе very dіffеrеnt goals. Bеfоrе taking асtіоn it is іmроrtаnt to undеrѕtаnd what уоu want to achieve. What you are trying to achieve will determine whісh tуре of BIA proceeding іѕ right fоr you.

Here is a quick ѕummаrу of еасh type of BIA proceeding. We also show how еасh one саn help уоu асhіеvе specific gоаlѕ in your fіnаnсіаl life.

What is bankruptcy?

Bankruptcy is most of the time misunderstood. According to the Office of the Superintendent of Bankruptcy Canada:

“Bankruptcy is a legal process designed to relieve honest but unfortunate debtors of their debts. At the end of the process, the bankrupt is released from the obligation to repay the debts they had when the bankruptcy was filed (with some exceptions)”.

Bankruptcy used to be the mоѕt common type of BIA proceeding fоr consumers. Its lіquіdаtіоn and discharge fеаturеs are dеѕіgnеd to end debts and give уоu a frеѕh ѕtаrt. In the United States it is referred to as “Chapter 7 proceedings”.

(Consumer) Proposal: One of the best alternatives to bankruptcy

The proposal provisions used by companies is “restructuring” or “reorganization”. Individuals with large debts can also use the restructuring provisions. Yet, there was no similar provisions available to small individual debtors in the BIA.

Parliament wished to find a way to provide for people with smaller debts to be able to restructure. A Parliamentary committee consulted with the stakeholders in the Canadian insolvency world. As a result, the consumer proposal legislation came into force in the 1990’s. Now, the consumer proposal provisions are used more than the consumer bankruptcy provisions. Canadians are now able to AVOID bankruptcy while still obtaining the help and counseling of a LIT.

The main use of the (consumer) proposal provisions of the BIA is to:

allow you as a debtor to keep your assets, if you can afford to in your budget;
AVOID bankruptcy, and provide a better alternative to your creditors than a bankruptcy would. You can relieve yourself of your debts, for an amount less than the total face value of all your debts;
If the рауmеnt plan іѕ ѕtruсturеd well, make affordable monthly payments; and
allow for the affordable monthly payments to cut ALL debts.

To meet all your debts in full but уоu can’t afford to ассоmрlіѕh that gоаl, this mау be just the ѕесrеt уоu need to know! In the United States it is called “Chapter 13 proceedings”.

Why avoiding bankruptcy can do more harm than good

There are alternatives to bankruptcy which merit review. But bankruptcy can often be a good thing. A recent report by the Federal Reserve Bank of New York states:

People who filed bankruptcy had access to more new lines of credit. Those who limped along in a poor financial state did not;
this puts to rest the misconception that filing bankruptcy closes the door to new credit;
those who didn’t file bankruptcy are just insolvent;
individuals who go bankrupt get a sharp boost in their credit score after bankruptcy;
the recovery in credit score is much lower for individuals who do not go bankrupt; and
insolvent individuals who do not go bankrupt exhibit more financial stress.

Where to go for information on alternatives to bankruptcy

Are you insolvent and looking for solutions? The Ira Smith Team is here to offer alternatives to bankruptcy and bankruptcy. We offer the help in Vaughan and throughout the GTA.

Our motto is Starting Over, Starting Now! Ira Smith Trustee & Receiver Inc. can help you overcome your financial difficulties. Contact us today.

THIS VLOG WAS INSPIRED IN PART BY OUR eBOOK – PERSONAL BANKRUPTCY CANADA: Not because you are a dummy, because you need to get your life back on track

Tags alternatives to bankruptcy, avoid bankruptcy, avoiding bankruptcy, Bankruptcy, BIA, Chapter 13, Chapter 7, Consumer Proposal, credit score, Ira Smith Trustee, licensed insolvency trustee, Lines of Credit, LIT, proposal, Superintendent of Bankruptcy

Brandon Blog Post

STUDENT LOANS DEBT: WILL BANKRUPTCY ELIMINATE IT IF YOU ARE NOT THE STUDENT?

Post author By Brandon Smith
Post date April 25, 2016

An interesting American case about student loans debt

Student loans debt is nearly impossible to get rid of in bankruptcy. A case winding its way through the US court system has piqued our intellectual interest. A father, who is a discharged bankrupt, is taking the lender who HE borrowed funds from for his child’s education to Court. The lender is continuing to pursue collection efforts against the father on the basis that the provisions of the Bankruptcy Reform Act of 1978, as amended, codified in Title 11 of the United States Code and commonly called the “Bankruptcy Code” (“Code”), does not release the father from what is in reality student loans debt. The father is taking the lender to Court for a ruling that by virtue of his discharge, he is released from that debt like all his other debts. It has raised the question whether the same student loans debt rules should apply in that case.

The Canadian perspective

We are not qualified to express any opinion on the US legal case before the US Court, but we are qualified to discuss the issue from the Canadian perspective. We started thinking whether this same situation could arise in Canada for student loans.

Last week we discussed student debt bankruptcy from the perspective of the student. Previously, we have written blogs and created a vlog about student loan debt, including:

So this week, we’re discussing student loan debt and bankruptcy from a very different and interesting angle. Could a Canadian lender take the position against a Canadian parent borrower who on the loan application described the purpose of the loans for the funding of his or her child’s Canadian post-secondary education, that the loans qualify as student loans under the applicable Canadian statutes, including, the Bankruptcy and Insolvency Act (Canada) (BIA). Stated otherwise, are such loans the same as student loans under Canadian law and can bankruptcy cut such loans if you’re not the student?

Are student loans necessary?

Many young Canadians need student loans to get a post-secondary education. To qualify as Canadian student loan debt, the loans must be issued under a specific Canadian student loan statute: the (i) Canada Student Loans Act; (ii) Canada Student Financial Assistance Act; (iii) Apprentice Loans Act; or (iv) any enactment of a province that provides for loans or guarantees of loans to students.

All students need financial help to be full-time university students. The only real places that such assistance can come from is either the parents, if they are willing and able to do so, student loans, or both. Many Canadian parents pay a hefty part of students’ tuition fees, even if it means sacrificing their financial stability, to help their children avoid a post-graduation life burdened by tens of thousands of dollars of student debt. Others may wish to, but they cannot afford to do so.

So are student loans and the resultant debt necessary? In most cases, yes.

Can a parent co-sign for or guarantee their child’s student loans?

The short answer is no. As I have already stated, to qualify as a student loan, the loan has to be made under the provisions of one of the Federal loan statutes mentioned above, or any such similar Provincial legislation. Nowhere in those student loans statutes is there a place for either a guarantor or cosigner. In fact, the Federal statutes all have similar language stating that upon the death of the borrower, the Federal government will repay the outstanding part of the loan. In addition to there not being any sections that allow for a guarantor or cosigner, the specific section dealing with the death of the borrower does not limit the government’s guarantee by using words like “….and if the lender is unable to collect in full from any guarantor or cosigner”. The reason is simple, student loans cannot be guaranteed or otherwise borrowed by anyone other than the student.

Will bankruptcy eliminate student loans debt?

Student loans are nearly impossible to get rid of in bankruptcy. Section 178(1) of the BIA states:

“(g) any debt or obligation in respect of a loan made under the Canada Student Loans Act, the Canada Student Financial Assistance Act or any enactment of a province that provides for loans or guarantees of loans to students where the date of bankruptcy of the bankrupt occurred:

(i) before the date on which the bankrupt ceased to be a full- or part-time student, as the case may be, under the applicable Act or enactment, or

(ii) within seven years after the date on which the bankrupt ceased to be a full- or part-time student;

(g.1) any debt or obligation in respect of a loan made under the Apprentice Loans Act where the date of bankruptcy of the bankrupt occurred

(i) before the date on which the bankrupt ceased, under that Act, to be an eligible apprentice within the meaning of that Act, or

(ii) within seven years after the date on which the bankrupt ceased to be an eligible apprentice;”

So if you’re a student, bankruptcy will only end student loans if you’ve ceased to be a full or part-time student for more than seven years and either declare personal bankruptcy or make a debt proposal to your creditors, most likely through a consumer proposal. The only other option is to attempt to seek from the Court relief because of undue hardship, but this is very difficult, if not impossible.

What is required to meet the burden of undue hardship?

If the Court is satisfied that you meet the two-pronged test, you’ll be discharged from your student loans obligations in bankruptcy only if the :

acted in good faith in connection with your obligation to repay your student loan debt; and (emphasis added)
have experienced, and will continue to experience, financial difficulty that will prevent you from repaying this debt

It’s then up to the bankruptcy court to decide whether they forgive your loans, either in full or in part. One of the difficulties in trying to prove undue hardship is that there is no clear definition for what makes up hardship; each bankruptcy court across Canada may use a slightly different interpretation. The only thing that’s clear is that you must prove that having to continue to pay the student loans after bankruptcy would be a financial hardship for you. If you try this route, the Court will look at ALL of your income and expenses.

The Court may decide you are not trying hard enough, or, may look at things like your small car you use to get to work, which you purchased used (instead of taking public transit), your cell phone and your internet expenses, and decide that these are luxuries you do not need. If you are a smoker, the Court may very well decide that if you were not addicted to tobacco, you could start to repay some part of your student loans.

If you think my examples are picayune or silly, just look up the case of Fournier (Re), 2009 CanLII 31606 (ON SC).

Will bankruptcy eliminate student loan debt if you are not the student?

I don’t know what the eventual disposition of the US case which I mentioned at the beginning of this blog will be, but based on all the above, in my view in the Canadian context, a parent, relative or friend cannot guarantee, cosign or borrow for a loan that qualifies as a Canadian student loan. If you borrow to fund your child’s education, then you are borrowing under an ordinary commercial transaction and the applicable student loan sections of the BIA do not apply.

So if you have borrowed for this purpose, only the normal provisions of the BIA apply, and you will get a discharge from that and your other debts upon your discharge from bankruptcy. However, if you pledged any of your assets in support of such borrowings, such as your home, the lender does have the right to enforce its security against such assets if you cannot repay, whether you are bankrupt or not.

What should you do if you have too much debt?

If you’re drowning because of your finances, we know we can help you. Although many people believe that bankruptcy is the only way of out serious debt, that’s not always the case. Ira Smith Trustee & Receiver Inc.can discuss other bankruptcy alternatives with you which include credit counselling, debt consolidation and consumer proposals.

If we get to see you early enough, at the first sign of trouble, you can use and carry out one of the bankruptcy alternatives, to free you from the burden of your financial challenges to go on to be a productive, contributing member of society and not be plagued by debt problems.

Bankruptcy law is very complicated and requires the expertise of a professional licensed insolvency trustee. Ira Smith Trustee & Receiver Inc. is here to help. With a cumulative 50+ years of experience dealing with diverse issues and complex files, we can get you back on your feet Starting Over, Starting Now. We can help. Call us today.

People consider us bankruptcy experts because we wrote the eBook which is sold on Amazon.ca, explaining the Canadian personal insolvency and bankruptcy system, specifically directed to the person stressed out with too much debt.

Brandon Blog Post

#VIDEO – SURPLUS INCOME LIMITS FOR 2015, 2016 & BEYOND: YOU WILL REALLY FEEL IT IN YOUR BANKRUPTCY #

Post author By Brandon Smith
Post date April 13, 2016

Our inspiration for this vlog

This vlog was inspired by our new eBook: PERSONAL BANKRUPTCY CANADA – Not Because You Are A Dummy, Because You Need To Get Your Life Back On Track, which is sold on Amazon.com. The eBook explains the Canadian personal insolvency and bankruptcy system, specifically directed to the person stressed out with too much debt.

The most asked question is about surplus income limits

The question we are always asked is: What are the surplus income limits for 2015 and 2016 if I am in bankruptcy? I don’t have any cash left over from each paycheque, so, how can you say that I have surplus income?

What are the surplus income limits for 2015, 2016 and beyond?

Surplus income is the amount of a debtor’s total income that exceeds what is necessary to maintain a reasonable standard of living according to the standards set by the Office of the Superintendent of Bankruptcy (remember, the actual standard is right at the poverty line so don’t get happy when you see words like “reasonable standard of living”). The bankrupt must make payments out of this surplus income to the Licensed Insolvency Trustee for distribution among the creditors.

It is part of the goals of the Canadian insolvency system that tries to balance the elimination of debt with the rights of creditors to be paid. The surplus income limits for 2015, 2016 and beyond, are set to allow Canadians to maintain what the Superintendent of Bankruptcy calls a reasonable standard of living during the bankruptcy process; the government has set thresholds or limits on net earnings (gross earnings after taxes and deductions) during the bankruptcy process. The Office of the Superintendent of Bankruptcy sets the threshold limits each year and these limits are indexed to inflation.

The threshold is set the same across Canada, regardless of what province or city you live in. So, someone living in the Greater Toronto Area, whose costs for shelter and probably transportation are higher than other parts of the country, will find that the threshold for them is essentially at the poverty line.

An example of how to apply the surplus income limits for 2015 and 2016

Here is an example of how the surplus income amount is calculated. Let’s assume we have a family of 4: a husband, wife and two young children in school. The husband earns (net of income tax) the annual amount of $46,000 and the wife earns (net of income tax) the annual amount of $18,000. To keep it simple, let’s assume that their monthly take-home pay can is their annual amount divided by 12 or a monthly income of $3,833.33 for the husband and $1,500 for the wife. Let’s assume that only the husband has to go bankrupt and not the wife.

The surplus income calculation for 2015 was:

(($3,833.33 + $1,500.00) – $3,831.00) X ($3,833.33/($3,833.33+$1,500)) = $539.90

This means the bankrupt husband will have to pay $539.90 to the Licensed Insolvency Trustee for a period of 21 months if he has never been bankrupt before, or for 36 months, if he has been bankrupt before, according to the Bankruptcy and Insolvency Act (Canada).

The surplus income calculation for 2016 is:

(($3,833.33 + $1,500.00) – $3,882.00) X ($3,833.33/($3,833.33+$1,500)) = $521.57

This means the bankrupt husband will have to pay $521.57 to the Licensed Insolvency Trustee for a period of 21 months if he has never been bankrupt before, or for 36 months, if he has been bankrupt before, according to the Bankruptcy and Insolvency Act (Canada) (BIA).

You cannot deduct your normal monthly living expenses against the monthly income in order to calculate the surplus income limits for 2015 or any other year. However, if the bankrupt has any of the following types of expenses, they can be deducted from income in calculating the surplus income amount.

Child Support
Spousal Support
Child Care Expense
Expenses associated with medical condition
Court imposed fines or penalties that are in process of being paid
Expenses permitted by Income Tax Act that are a condition of employment
Any other debt where the stay of proceeding has been lifted

The surplus income limits for 2015 and 2016, or put another way, the amount the Superintendent of Bankruptcy believes a family, where there is one bankrupt person in a family of four, should have a take-home monthly income of $3,882 or annual family take home pay of $46,584, before the bankrupt person has to start contributing 50% of his or her income for the benefit of the bankrupt’s creditors. That is why we say the Federal government’s idea of a “reasonable standard of living” is really at the poverty line.

What to do if you have too much debt

If you’re in “survival mode” when it comes to your finances, we’ve got solutions for you. Although many people believe that bankruptcy is the only way out of serious debt, that’s not always the case. Ira Smith Trustee & Receiver Inc. can discuss other bankruptcy alternatives with you which include credit counselling, debt consolidation and consumer proposals.

If we get to see you early enough, at the first sign of trouble, you can utilize and implement one of the bankruptcy alternatives, to free you from the burden of your company’s financial challenges to go on to be a productive, profitable employer allowing management to focus on business growth and not be plagued by debt problems. Come in for a no obligation, no fee consultation and let us help you get back on track to living a debt free life Starting Over, Starting Now. Give us a call today.

Tags Bankruptcy, bankruptcy alternatives, Bankruptcy and Insolvency Act, bankruptcy process, BIA, Consumer Proposal, consumer proposals, eBook, Ira Smith Trustee, licensed insolvency trustee, starting over starting now, surplus income calculation for 2016, surplus income limits for 2015

Brandon Blog Post

#VIDEO – BANKRUPTCY EXPERTS IN ON: TOP REASONS WHY OTHERS CALL US THAT#

Post author By Brandon Smith
Post date March 23, 2016

Who says you qualify as bankruptcy experts in ON?

Ira Smith Trustee & Receiver Inc. is a licensed insolvency trustee, licensed to practise in the Province of Ontario (ON). In our recent vlog, #VIDEO: CHCH TV BANKRUPT: using shell companies legal but controversial experts say, Sean O’Shea, Global News, December 17, 2015, interviewed various experts on the CHCH TV bankruptcy. Mr. O’Shea sought licensed insolvency trustees as his bankruptcy experts in ON, and the one he chose was our Ira Smith of Ira Smith Trustee & Receiver Inc. We are also contacted by the Toronto Star when they wish clarification on insolvency issues for an article to appear in the newspaper.

So why are we sought out as bankruptcy experts in ON?

Here is our list:

We provide a free first consultation – Part of being an expert is professionalism. An expert licensed insolvency trustee will provide a free first consultation to prove expertise and to lay out all the possible options for the bankruptcy alternatives in addition to discussing the bankruptcy option.
We have the necessary qualifications – Mr. O’Shea checked us out with 3rd parties before determining that he would call our Firm as an expert. The reviews he received from those 3rd parties confirmed to him that he should call us as his bankruptcy expert. How do we know? We asked him why he called us as opposed to the many other licensed insolvency administrators in the GTA and he told us.
We regularly appear in the Bankruptcy Court and the Commercial List Court – We attend normally representing the Trustee ourselves in Bankruptcy Court, and with counsel in the Commercial List Court. We communicate well with and are trusted by the insolvency bar, the Bankruptcy Court Masters and the Commercial List judges. We are up on the Canadian bankruptcy laws and regulations. To me, that is the mark of an expert.
We always first consider the restructuring option – To me the sign of an expert is someone who understands the totality of their industry. An expert can assess a situation and provide the debtor with a range of options. Not all can be done and most of the time each comes with its own set of peculiarities, but we always put all the options on the table for the individual or corporate Director to consider. The amateur uses a cookie cutter with the same answer for every different situation. The expert thinks “out of the box” too. We always think “out of the box”
When you deal with us, our licensed insolvency trustees are always accessible – No matter how small or large the mandate, you will always be able to discuss issues of concern with either Ira Smith or Brandon Smith, our two licensed insolvency trustees. To us, the expert is a professional, and never too busy to be reachable and accessible, no matter what day or time it is. You will find that we provide a great deal of education and information on our website. We provide a great deal of bankruptcy information online. That is also the mark of an expert and professional.
How did you feel after meeting with us – The expert and professional always tries to be reassuring and provide recommendations on how to overcome the personal or corporate financial challenges, while not sugar-coating and always being realistic. That is how you will feel after consulting with us. You may not like what you hear, but it will be the best expert advice we can provide.
Do you regularly practice in the insolvency area – Our practice is limited to the insolvency area. We do not do any other type of work. That is why others call us bankruptcy experts in ON. As a result, we know and can explain in layman’s terms the Canadian bankruptcy laws.
Our experience is in personal insolvency and corporate insolvency – Given the range of experience of our licensed insolvency trustees and other senior staff, Ira Smith Trustee & Receiver Inc. can handle all types of insolvency work from the smallest no asset consumer file to the large complex corporate restructuring under the Canadian Bankruptcy Act, either the Bankruptcy and Insolvency Act (Canada) (BIA) or the Companies’ Creditors Arrangement Act (Canada) (CCAA).
Will you communicate in a prompt manner – Part of being a professional and expert is that we always communicate with stakeholders. It does not matter whether you are the party that referred us the work, you are the Debtor or you are a creditor, if you are a stakeholder, then you deserve timely and accurate communication. That is what being a professional and an expert is all about.
How do you charge for your work – An expert and professional is upfront about the cost of performing the work. We always have that discussion with stakeholders. You will find that we never shy away from that discussion so that there are no surprises for anyone. You will find that although our expertise is as a large firm, our pricing is that of a small firm.

What to do if you or your company has too much debt?

If you or your company are facing financial challenges and do not know what to do, contact Ira Smith Trustee & Receiver Inc., one of the bankruptcy experts in ON. Obtain a free consultation from a licensed insolvency trustee to understand the options available either as an alternative to bankruptcy or of bankruptcy itself. We are professionals, federally regulated, licensed and subject to a strict code of ethics. We can help; Starting Over, Starting Now you can live a debt-free life.

Tags bankruptcy experts in on, bankruptcy information online, BIA, canadian bankruptcy act, canadian bankruptcy laws, canadian bankruptcy laws and regulations, CCAA, Ira Smith Trustee

Brandon Blog Post

BUSINESS RESTRUCTURING PROPOSAL: REASONS WHY GOODWILL TORONTO IS NOT ALWAYS ENOUGH

Post author By Brandon Smith
Post date February 10, 2016

The issue of a business restructuring proposal of Goodwill Toronto has recently been in the news. This video is an interview aired on TV Ontario, The Next Ontario show, with Dr. Sarah Kaplan, Professor of Strategic Management at Rotman School of Management, University of Toronto. The purpose of the interview is to obtain Dr. Kaplan’s views on the Goodwill Toronto closure of 16 Goodwill stores.

Toronto Goodwill thrift stores were operated, not unlike a Salvation Army thrift store, to raise funds to support the aims of the non-profit; in this case job skills and job creation for those who might otherwise be unemployable.

It takes money to restructure

We have all heard the expression “It takes money to make money”. I would like to make a slight twist on that expression by stating that it takes money to have a successful business restructuring proposal. Not only does the company and business have to be able to have sufficient cash flow in order to operate during the restructuring period, but there are also extraordinary one time expenditures related to the restructuring. Examples of such one time expenditures are reasonable one time exit fees to get out of uneconomical contracts, bonus payments to key personnel to ensure that they perform throughout the entire restructuring rather than resign for a new position elsewhere and professional fees.

Our Goodwill Toronto analysis

Our firm was consulted early in January to act as the licensed insolvency trustee in a business restructuring proposal of Goodwill Toronto. We spent half a day meeting with representatives of Goodwill Toronto in order to learn of their plight and to determine what sort of restructuring proposal might be possible.

In our meeting we learned that the main assets of Goodwill Toronto consisted of: (i) cash or liquid investments pledged to a Canadian chartered bank on account of business loans; (ii) accounts receivable with a certain percentage collectability; and (iii) inventory of items for sale, mainly used clothing, spread across 16 stores in leased locations.

We also learned that there were over 400 unionized employees, the majority of which had long term service with Goodwill Toronto. This is significant for three main reasons: (i) a viable restructuring proposal would be required to save the jobs of many, but probably not all of the employees; (ii) if the business restructuring proposal was unsuccessful, Goodwill Toronto would automatically be deemed to have filed an assignment in bankruptcy (a deemed assignment); and (iii) in a bankruptcy, the employees would have a claim under the Wage Earner Protection Program Act (WEPPA).

It takes money to implement a successful business restructuring proposal

So, why is this significant? The reasons it is significant for a restructuring vs. bankruptcy are:

The secured portion of the employees’ WEPPA claim coming ahead of all creditors, including the chartered bank, totalled approximately $900,000.
Next in priority was the claim of the chartered bank.
There were no free assets after the above 2 claims that Goodwill Toronto could use to fund operations or the extraordinary expenses associated with a business restructuring proposal discussed above.

So as you can see, with no free cash flow, no excess realizable assets or a third party who could fund a business restructuring proposal (or in the worst case a bankruptcy proceeding), it would not be possible for a knowledgeable licensed insolvency trustee to agree to act as there was no source of funding available.

This is why the best of intentions and goodwill (toronto) is not always enough!

The Sarah Kaplan interview

Professor Kaplan raises many good points in this interview, including:

We should first think about what the whole business model of the goodwill is.
The goods that they get to sell are aimed at just generating revenues that allow them to perform their actual services like job.
It may be that the retail environment is tougher in some ways if we think about the alternative for people who buy things at goodwill would be to go to discount stores or dollar stores.
As the market is becoming more and more competitive we could imagine that people would not need to shop at Goodwill if they can get a t-shirt for $5 at WalMart.
Goodwill’s in other areas though are doing fine so we may need to look a little bit more deeply into the problem.
The entire board resigned so there could be some other management issues that led to Goodwill Toronto to be running a deficit.
You have to be well managed and being a social enterprise is not an excuse to not be well managed; you need the same skills capabilities and maybe even more skills and more capabilities than in the for-profit world.
The fact that they’ve taken this extraordinary really drastic measure leads me to believe that the difficult retail environment is not the whole story and therefore not the whole story for other social enterprises.

NOTE: After writing this blog, Goodwill Toronto filed an assignment in bankruptcy.

Is your company in need of a business restructuring proposal?

If your company is trapped with too much debt, you need a professional trustee to help you manage debt and create a viable business restructuring proposal (either under the Bankruptcy and Insolvency Act or the Companies’ Creditors Arrangement Act – BIA or CCAA) before it reaches a critical stage where bankruptcy is your only option. We have been able to help many companies carry out a successful business restructuring proposal. Successful completion of such a program, will free you from the burden of your company’s financial challenges to go on to be a productive, profitable employer allowing management to focus on business growth and not be plagued by debt problems.

Contact the Ira Smith Team today in order to look at the bankruptcy alternative of a business restructuring proposal. We can help and Starting Over, Starting Now you can be restored to financial health.

Brandon Blog Post

407ETR BANKRUPTCY DEBT CHECKLIST: YOU NEED IT NOW!

Post author By Brandon Smith
Post date November 25, 2015

To access the 407ETR bankruptcy debt checklist, simply click on the picture either at the top or bottom of this blog. It will take you to our secure website for access.

407ETR Bankruptcy Debt: How did the Checklist come about?

407ETR bankruptcy debt was the topic of last week’s blog 407ETR DEBT SETTLEMENT: OUR NEWEST GUILT FREE WAY TO DO IT, we reported on the Supreme Court of Canada (SCC) decision in 407 ETR Concession Co. v. Canada (Superintendent of Bankruptcy), 2015 SCC 52 (CanLII) (the Moore Decision).

To summarize that decision, the SCC dismissed the 407ETR’s appeal because the discharge provisions of the BIA override the plate denial provisions of the Highway 407 Act.

We also reported that the effect of the SCC’s decision is that:

Pre-bankruptcy amounts owed to 407ETR are deemed to be provable claims under the BIA and can no longer be collected through plate denial under the Highway 407 Act following a customer’s discharge from bankruptcy
Where a person has been discharged from bankruptcy and has pre-bankruptcy amounts in plate denial, which are provable claims under the BIA, 407ETR will credit these amounts (plus interest and fees incurred on those amounts) on the person’s 407ETR bill, upon receipt of a Notice of Bankruptcy, and an Order of Discharge or a Certificate of Discharge.

In both cases, once the amount owing is credited, then the person is free to obtain plate renewal from the Province.

But the Court won’t tell me how to get my plate after getting rid of my 407ETR bankruptcy debt!

That is all well and good, but the SCC did not and would not tell the “man on the street” how to go about having the combination of the 407ETR and the Province of Ontario reflect all this and issue a new vehicle plate registered in the name of the discharged bankrupt. So we did!

Where do I get these tools?

We prepared a checklist so that discharged bankrupts and their advisors will have a roadmap as to what needs to be done and what tools are required in order for 407ETR and the Province to have the proper information in order to amend their records and allow for the vehicle plate registration.

To access the 407ETR bankruptcy debt checklist, simply click on the picture either at the top or bottom of this blog. It will take you to our secure website for access.

Do you have too much 407 debt and other debts?

Instead of going deeper into debt seek the help from a professional trustee, even if you’re not considering bankruptcy at this stage. A trustee in bankruptcy will evaluate your situation and help you to arrive at the best possible solution for your problems, whether that solution is a bankruptcy alternative like credit counselling, debt consolidation or a consumer proposal or bankruptcy. With immediate action and the right plan the Ira Smith Team can solve your financial problems Starting Over, Starting Now. We’re just a phone call away.

Brandon Blog Post

407 ETR DEBT SETTLEMENT: OUR NEWEST GUILT FREE WAY TO DO IT

Post author By Brandon Smith
Post date November 19, 2015

407 ETR debt settlement

This 407 ETR debt settlement blog was reviewed earlier this week by Mr. Brian Empey, Partner, Goodmans LLP. We wish to express our thanks to Mr. Empey who made a valuable suggestion which we incorporated.

We have updated this blog for 2018 where 407 ETR has implemented some changes. Check out our blog 407 ETR RATES: THE ONLY 407 ETR RATES DEBT SETTLEMENT PLAN GUARANTEED TO ACTUALLY WORK for the update.

In January 2014 in our blog titled 407ETR FAIRNESS-ONTARIO COURT OF APPEAL ENSURES FRESH START we described to you the decision of the Court of Appeal for Ontario in 407 ETR Concession Company Limited v. Superintendent of Bankruptcy (In the Matter of the Bankruptcy of Matthew David Moore) (the Moore Decision).

The highway’s owners appealed that decision to the Supreme Court of Canada (SCC). On Friday, November 13, 2015, the SCC released three decisions all dealing with the same basic issue: does the federal Bankruptcy and Insolvency Act (BIA) take paramountcy over provincial laws purporting to deal with the issue of debt and bankruptcy in Canada. The SCC answer was a resounding YES!

What did the SCC decide about the provincial law about 407 debt settlement?

The SCC dismissed the appeal of the ETR. The SCC considered whether the plate denial provisions of the Highway 407 Act conflicted with the discharge provisions of the BIA. ETR’s position was that provincial law about plate denial should apply following a person’s discharge from bankruptcy. The Attorneys General for several provinces, including the Province of Ontario, advanced positions in support of the provinces’ jurisdiction to legislate in vehicle licensing.

The SCC’s decision upheld the Moore Decision which found that the discharge provisions of the BIA override the plate denial provisions of the Highway 407 Act.

What is the effect on ETR debt settlement?

The effect of the SCC’s decision is that pre-bankruptcy amounts owed to the ETR are deemed to be provable claims under the BIA and can no longer be collected through plate denial under the Highway 407 Act following a customer’s discharge from bankruptcy. Therefore, 407 etr debt settlement is possible.

Where a person has been discharged from bankruptcy and has pre-bankruptcy amounts in plate denial, which are provable claims under the BIA, 407 ETR will credit these amounts (plus interest and fees incurred on those amounts) on the person’s 407 ETR bill, upon receipt of a Notice of Bankruptcy, and an Order of Discharge or a Certificate of Discharge.

In both cases, once the amount owing is credited, then the person is free to get plate renewal from the Province.

What will 407 ETR do next?

407 ETR must and is abiding by the SCC decision. They will set up a protocol whereby those who have already been discharged from bankruptcy and have been denied a plate renewal will be able to prove they have been discharged, get the 407 ETR debt, including penalty and interest, reversed, and get a plate renewal.

Those who are still in the middle of their bankruptcy proceedings and not yet discharged will be able to apply to have a plate renewal, once they are discharged from bankruptcy and prove it to 407 ETR.

Interestingly enough, there was no evidence whatsoever in any of the Court cases, including this one before the SCC, as to the 407 ETR’s right to deny anyone credit. When you get your transponder, the 407 ETR is actually extending credit to you, in the form of use of the toll highway in return for the toll charges they expect you to pay. It is no different from the bank loaning you money, and expecting you to repay it in full, with interest.

Will 407 ETR deny extending credit to discharged bankrupts? Will they only issue a new transponder to discharged bankrupts who give them a large cash deposit so that use of the 407 ETR will only be on a “cash and carry” basis? We don’t know, they have so far been silent on the issue, but it is still early in the game.

Do you need 407 etr debt settlement and a plan for your other debts too?

Instead of going deeper into debt seek help from a professional trustee, even if you’re not considering bankruptcy at this stage. A trustee in bankruptcy will evaluate your situation and help you to arrive at the best possible solution for your problems, whether that solution is a bankruptcy alternative like credit counselling, debt consolidation or a consumer proposal or bankruptcy. With immediate action and the right plan, the Ira Smith Team can solve your financial problems Starting Over, Starting Now. We’re just a phone call away.

Brandon Blog Post

# VIDEO: THE HISTORY OF CONSUMER PROPOSAL DEFINITION #

Post author By Brandon Smith
Post date October 7, 2015

Consumer Proposal definition

It is important to know what the consumer proposal definition is. A consumer proposal is a relatively new addition to the Bankruptcy and Insolvency Act (BIA), even though it has been around for 23 years. Although the origins of the current BIA can be traced back to the original 1869 An Act respecting Insolvency, the consumer proposal section was enacted with the 1992 amendments to the BIA.

According to the Office of the Superintendent of Bankruptcy, the consumer proposal definition is:

“A consumer proposal is a formal, legally binding process that is administered by a bankruptcy trustee. In this process, the trustee will work with you to develop a “proposal”—an offer to pay creditors a percentage of what is owed to them, or extend the time you have to pay off the debts, or both. The term of a consumer proposal cannot exceed five years.

Payments are made through the trustee, and the trustee uses that money to pay each of your creditors.”

My consumer proposal definition

My consumer proposal definition is THE GREAT alternative to bankruptcy. It’s available only to people, whose total debts do not exceed $250,000, not including debts secured by their principal residence. Working with a trustee in bankruptcy you make a consumer proposal to:

Pay your creditors a percentage of what you owe them over a specific time
Extend the time you have to pay off the debt
Or a combination of both

Watch this short video

I hope that you enjoy the video. Most people facing financial challenges, or insurmountable debt that they can never repay, cannot focus on the consumer proposal definition. We understand that what you need is an experienced trustee to recommend you solutions tailored specifically to your situation. Contact Ira Smith Trustee & Receiver Inc. for sound, professional advice and a solid financial plan for Starting Over, Starting Now.

Tags Bankruptcy, Bankruptcy and Insolvency Act, BIA, Consumer Proposal, consumer proposal definition, Debt, debts, Office of the Superintendent of Bankruptcy, starting over starting now, trustee, trustee in bankruptcy