Tag: Consumer Proposal

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YOUR CREDIT RATING CAN BE RUINED EVEN IF YOU DON’T DO ANYTHING WRONG

credit rating, credit score, collection agencies, collection agency, credit record, credit score mistakes, bankruptcy alternatives, Consumer Proposal, Bankruptcy, I came across this story not long ago about a man in Ontario who had his credit rating ruined by Rogers even though he has never had a Rogers account. I know this sounds unbelievable but Mr. Dave Johnson of Pembroke, Ontario has spent three years fighting a Rogers Bill that isn’t his. This story is a perfect example of why it’s so important that you are aware of your credit score and credit rating and check it periodically.

Rogers like many large companies outsources the collection of accounts that are in default to collection agencies. According to the Government of Canada you must be notified in writing that your file has been given to a collection agency. In this case Dave Johnson never received notification from the Rogers collection agency that his account was in default because he never had a Rogers account. Never-the-less, in 2010 he received a $5,400 bill from a Rogers collection agency working for Rogers Wireless. Mr. Johnson knew he wasn’t in arrears and contacted the collection agency letting them know that he didn’t have a Rogers account and that somewhere there was a clerical error. The collection agency seemed to be very reasonable and Mr. Johnson believed that the matter had been cleared up. Big mistake! The $5,400 debt to Rogers Wireless ended up on his credit record and as a result of this, leading to a poor credit rating:

  • He was turned down for credit cards.
  • He wasn’t allowed to co-sign for his son’s mortgage.
  • He couldn’t use the equity in his home.

In the process of trying to clear his name and restore his credit, and his credit rating, Mr. Johnson discovered that another man, also named David Johnson, has also been wrongly pursued for the very same bill. The reality is that the Rogers collection agency clearly didn’t have a file with accurate information of the debtor. They were going after anyone and everyone who had the same name, which unfortunately for the David Johnsons in Ontario, is quite common.

Rogers is not taking any responsibility for this problem. They are blaming the Rogers collection agency. In case you think that this is an isolated incident, CBC News received dozens of complaints last year about how collection agencies aggressively pursue unpaid debts. Howard Maker, Commissioner of Telecommunications Complaints, has confirmed that he is aware of this ongoing problem.

If you are being legitimately pursued by collection agencies because you’re experiencing serious financial difficulties and you are concerned about your credit rating, contact Ira Smith Trustee & Receiver Inc. We can help and Starting Over, Starting Now you will gain back your former quality of life. Watch for our next blog when we’ll be discussing Common Credit Score Mistakes.

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EMPLOYERS CAN BE FORCED INTO BANKRUPTCY BY CRIMINAL PENALTIES

www.irasmithinc.com, consumer proposal, toronto bankruptcy, bankruptcy, bankruptcy trustee, bankruptcy (4)Ground Breaking News for Employers: On September 4, 2013, the Court of Appeal for Ontario held that, in appropriate cases, courts can essentially fine a company into bankruptcy for a Criminal Code conviction. The Court of Appeal released its decision in the sentence appeal in R. v. Metron Construction Corporation (“Metron”) as a result of tragic circumstances.

What circumstances brought about this ground breaking decision? In September 2009 there was a tragic worksite accident that left 4 workers dead and one who survived with serious injuries. Metron was restoring concrete balconies on 2 high-rise buildings in Toronto. They had arranged for a number of swing stages for the project; however 2 of the swing stages from an Ottawa-based supplier did not have any markings, serial numbers, identifiers or labels describing maximum capacity, as required by law and industry practice. They were delivered without manuals, instructions or design drawings and, contrary to legal requirements, were not accompanied by a written report from a professional engineer stating that the swing stage had been erected in accordance with design drawings. There were 2 lifelines for the swing stage to which workers could connect their fall harness. The normal practice was that only 2 workers would be on the swing stage at any one time. On December 24, 2009, 6 workers were on a swing stage at a height of approximately 13 storeys. The swing stage collapsed and 4 workers were killed, 1 survived with serious injuries and 1 who was actually connected to a fall arrest system was not injured.

After an investigation by the Ministry of Labour and the police it was determined that three of the four deceased, including the site supervisor, had recently consumed marijuana. It was also determined that the swing stage collapsed because its design was defective and it was unable to tolerate the combined weight of six men and their equipment. Many charges were laid by The Ministry of Labour against multiple parties under the Ontario Occupational Health and Safety Act (“OHSA”). After its own investigation, the Toronto Police Service also laid numerous criminal charges.

Employers Beware!

  • It appears possible that the criminally negligent behaviour of a single, low-level official could lead to a sentence that sends a company into bankruptcy, notwithstanding the absence of systemic conduct or the involvement of highly placed officials.
  • There is no due diligence defence to a criminal negligence charge and the corporate level at which the criminally negligent behaviour occurred is irrelevant and cannot diminish corporate culpability.
  • A corporation cannot diminish its culpability based on the hierarchical position of the criminally negligent individual(s) within the organization.
  • Criminal negligence is a different and more serious offence than a breach of health and safety legislation and is expected to result in more severe sentences.

If your small company, entrepreneurial corporation, or a multi-faceted complex organization has found itself in financial difficulty for any reason, Contact Ira Smith Trustee & Receiver Inc. immediately. Our practitioners are available seven days a week do deal with your urgent needs. Starting Over, Starting Now we’ll put an immediate plan in place and start the process for dealing with the longer-term situation.

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SENIOR CREDIT CARD DEBT RELIEF OR DECLARE BANKRUPTCY-SENIORS IN DEBT, PART 3

senior credit card debt relief, should seniors file a consumer proposal, bankruptcy, personal bankruptcy, declare bankruptcy, trustee, bankruptcy alternatives, bankruptcy process, credit counselling, debt consolidation, consumer proposals, wagesLast week we discussed why the majority of seniors are in debt. This week we’ll be addressing if seniors should try and pay off their debts to obtain senior credit card debt relief or declare bankruptcy.

Life is very difficult for many seniors who anticipated that their golden years would be a carefree retirement. Instead, according to the Vanier Institute for the Family, Canadians over the age of 65 have the highest insolvency and bankruptcy rates in the country. With increasing expenses and a significantly reduced income and return on investments, more seniors are contemplating bankruptcy; but is it the best and/or only option?

While it’s true that bankruptcy can eliminate many of your debts, people typically file personal bankruptcy as a means of protection from creditors. If you are working, bankruptcy will protect you from creditors garnisheeing your wages. However, if you are retired and your sole source of income is your pension, then there are no wages to garnishee. It is very difficult for a creditor to garnishee a pension with one notable exception. If you owe the CRA (Canada Revenue Agency) for unpaid taxes, they are permitted to garnishee all types of pension income under Section 224.1 of the Income Tax Act. It is rare that the CRA will garnishee your pension income, but it is a possibility. If you have a significant tax debt and the CRA has threatened a pension garnishment, the bankruptcy process is an option that has to be considered.

The right debt relief option you ultimately decide upon will depend on whether or not you have assets, who you owe money to, and how much you owe. For seniors in debt there are bankruptcy alternatives – credit counselling, debt consolidation, consumer proposals – which in many cases are better options than declaring personal bankruptcy. In our next blog, we will be considering various options, including should seniors file a consumer proposal?

Unfortunately too few Canadians are properly prepared for the financial reality of retirement. They get caught up in a downward financial spiral and some pass away leaving significant debt. The family is then left with the unpleasant options of paying the debt themselves or bankrupting the estate. If you are a senior in serious debt, consult a professional Trustee as soon as possible. Contact Ira Smith Trustee & Receiver Inc. for professional advice and an action plan that’s right for you. Starting Over, Starting Now we can give you the help that you need to deal with your financial problems, and peace of mind.

Watch for our next blog when we’ll be discussing some advice we have for seniors in debt.

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HELP FOR SENIORS IN DEBT-SENIORS IN DEBT, PART 2

help for seniors in debt, seniors in debt, debt, debt management, bankruptcy, trustee, trustee in bankruptcy, sandwich generation, grey divorce, seniors with credit card debt

Last week we discussed “What Do The Golden Years Really Look Like”?This week we’ll be addressing why the majority of seniors are in debt and provide help for seniors in debt.

Seniors are facing a myriad of financial issues that have made their anticipated “golden years” anything but golden.

  • The Sandwich Generation: Many are still part of the “sandwich generation” a phenomena caused by delayed marriage, postponement of children, and adults with increasingly long-lived parents. They’re borrowing to help their children, grandchildren and parents. As long as they have collateral and a good credit rating, banks will readily lend them money.
  • Grey Divorce: According to Statistics Canada, divorce among couples 65 years of age and older is becoming more common and grey divorce can create serious debt for boomer retirees.
  • Recession: Battered financial markets and anaemic economic growth have forced Canadians to make debt management and not retirement the primary focus of financial planning. Their investment returns may have been decimated by the recession and they borrowed hoping markets would stabilize.
  • Lifestyle Choices: Even though they’ve reached 65 and their incomes have been greatly reduced, they continue to live the same lifestyle that they lived prior to retirement. With reduced incomes, often coupled with increased expenses, they are accumulating more debt to boost income through credit so that they can continue to enjoy a pre-retirement lifestyle they may no longer be able to afford. Seniors with credit card debt adapt by making only the minimum monthly payments on credit cards, which leads to a downward debt spiral, a journey that often ends with a trip to a trustee in bankruptcy.

The problem with carrying debt into retirement is that it must be serviced with less income than when working full-time. Mid-career people can start over, but retirees can‘t. If you are now facing serious debt issues contact Ira Smith Trustee & Receiver Inc. We can help you get your life get back on track. Starting Over, Starting Now you can take the first step towards an enjoyable retirement. Watch for our next blog when we’ll be discussing if seniors should try and pay off the debt or declare bankruptcy.

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MARITAL BREAKDOWN AND BANKRUPTCY: WHICH COMES FIRST?

Bankruptcy, bankruptcy and divorce, Bankruptcy and Insolvency Act, bankruptcy faqs, Consumer Proposal, credit counselling, Debt, debt consolidation, debt relief, divorce, family law, if my ex files bankruptcy how will it affect joint accounts, if my ex files for bankruptcy how will it affect joint accounts, marital breakdown and bankruptcyJust like the old conundrum, “which came first; the chicken or the egg” how would one answer, marital breakdown and bankruptcy: which comes first? It has no definitive answer because excellent arguments can be made for both sides. The same holds true for “divorce and bankruptcy; which comes first”?

Each case has to be decided upon its own merit. Although marital breakdown and bankruptcy, and bankruptcy and divorce, often go hand in hand, marital breakdown doesn’t always lead to divorce if the marriage can be salvaged. As family and parental rights lawyers UT have made clear, bankruptcy and divorce are two separate legal processes that can be at odds with each other.

There are however a few indisputable facts:

  • The number one reason for marital breakdown and couples getting divorced is financial issues. Divorce.com
  • In a recent study one out of every seven people who declared bankruptcy in Canada listed separation, divorce or marital breakdown as a contributing factor to their financial problems.
  • One-third of all people facing bankruptcy are there because they are also going through marital breakdown and divorce in Ontario or a separation. Gail Vaz-Oxlade
  • Bankruptcy doesn’t eliminate all divorce debts. E.g. It does not eliminate alimony or child support.
  • Declaring bankruptcy on joint debts, even debts in divorce, will impact the other borrower.

If causing the least disruption on the children of the family during a marital breakdown and bankruptcy is of prime importance to the spouse with the debts (and presumably that will be the same as the spouse making the support payments), it makes sense to have at least the support provisions of the divorce proceedings agreed upon, including the making of the support order and then file for bankruptcy. Marital breakdown and bankruptcy process will not disturb any bona fide arrangements for support, but keep in mind it will affect property not already dealt with by the family law court.

One such area comes up in this common question: “If my ex files for bankruptcy how will it affect joint accounts?”. Family law proceedings are the one area of provincial law that is left relatively untouched by the Bankruptcy and Insolvency Act, which is a federal statute. However, the Supreme Court of Canada has confirmed that in Provinces that are an equalization jurisdiction (as opposed to a division of property jurisdiction), in a unanimous decision, the court upheld defining equalization payments as debts that are a claim provable in bankruptcy, meaning they are wiped off a person’s slate by the bankruptcy process.

Marital breakdown and bankruptcy is an extremely complicated process, made even more complicated when combined with divorce and requires the expertise of a licensed Trustee to work with your family lawyer to assess your individual situation and provide practical solutions and an action plan. If you have serious debt problems, are contemplating bankruptcy and divorce, or just wish to know more about marital breakdown and bankruptcy, just in case, check out our bankruptcy faqs and then contact Ira Smith Trustee & Receiver Inc. as soon as possible. Starting Over, Starting Now we can help you get your life back on track, even with marital breakdown and bankruptcy looming. Watch for our next blog when we’ll be addressing more issues related to marital breakdown and bankruptcy, and divorce and bankruptcy.

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THE LATEST ON DEBT SETTLEMENT COMPANIES

debt settlement, debt settlement companies, debt reduction, debt relief, debt negotiation, bankruptcy, bankruptcy alternative, credit counselling, debt consolidation, consumer proposalBack in February we did a blog warning the public to Beware of Debt Settlement Companies. At the time the U.S. Federal Trade Commission had effectively shut down debt settlement companies, but no action had been taken in Canada. Although there have been numerous consumer alerts issued about debt settlement companies by the Financial Consumer Agency of Canada (FCAC), many people are still falling victim to them. Consumers are taken in by false claims offering to settle your debts for pennies on the dollar quickly and easily. The reality is that when something seems too good to be true, it usually is. Debt settlement companies exist for only one reason – to take your money! They will not help you solve your debt problems. There is no instant or quick fix for serious debt issues.

Finally this spring the Ontario Ministry of Consumer Services publicly declared it is moving ahead with tough legislative measures to protect consumers from these unscrupulous companies know as debt settlement companies, debt reduction companies, debt relief companies and debt negotiation companies. The Ontario Ministry of Consumer Services intends to introduce legislation that will:

  • Ban companies from charging upfront fees for debt settlement services
  • Limit the amount of fees consumers are charged
  • Require clear, easy-to-understand contracts
  • Establish a 10-day cooling-off period, providing consumers more time to consider their agreements
  • Allow the licenses of non-compliant debt settlement companies to be revoked

The best advice that we can offer is beware! There are currently 60 debt settlement companies operating in Ontario just waiting to take advantage of your situation.

If you are experiencing serious debt problems, there is help available. Contact Ira Smith Trustee & Receiver Inc. We are licensed by the Government of Canada and subject to a stringent code of ethics. As trustees in bankruptcy we 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. If ultimately consumer proposals or bankruptcy is the best option for you, you will have to use a trustee in bankruptcy. Contact us today and take your first step towards living a debt free life Starting Over, Starting Now.

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THE RELATIONSHIP BETWEEN YOUR CREDIT SCORE AND INSURANCE RATES

Last week we took a light hearted look at how people are using credit scores to find love. This week we are discussing a more serious matter -the relationship between your credit score and insurance rates. Sadly many consumers have seen their premiums rise as a result. CBC-TV’s “Marketplace” spoke with several people who saw home insurance premiums double after their insurance company began including credit scores as a way to calibrate risk. How prevalent a practice is this? About 55% of Canada’s largest insurers now use credit scoring. And of that segment 42% did not disclose the practice to customers, according to the Canadian Council of Insurance Regulators.

The insurance companies who use credit scoring are trying to put a positive spin on it. According to Desjardins, insurance companies check your credit score only to offer you the best premium possible. The Cooperators offers a slightly different slant. “Credit score is simply a reflection of a person’s level of responsibility and behaviour when it comes to managing their financial obligations.” Donald Hanson of the National Association of Independent Insurers stated, “Research indicates that people who manage their personal finances responsibly tend to manage other important aspects of their life with that same level of responsibility and that would include being responsible behind the wheel of their car or being responsible in maintaining their home.” Cheap down payment auto insurance companies have found that there is a correlation between higher scores and safe driving but I have not seen the research to back up this claim.

Many disagree with the use of insurance credit scoring citing that a driver’s record doesn’t change with his/her credit score, nor does the area where their house is located. Therefore, there is no evidence that the risk factor will change with a high or low credit score. In fact credit scoring has been a controversial topic in Ontario as it is in other parts of the country. The practice is no longer allowed in some provinces, and some groups, including The Insurance Brokers Association of Ontario (IBAO) have been lobbying for several years to have it banned in Ontario. Whether you agree or disagree, the fact that insurance credit scoring exists only goes to show how important it is for all of us to maintain good financial health. Unfortunately, there is not a Canadian credit score calculator tool that anyone can use.

If your credit score is adversely affecting your life, contact Ira Smith Trustee & Receiver. Starting Over, Starting Now you can take the first steps towards financial health.

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GOOD CREDIT SCORES HAVE SEX APPEAL

credit score, credit scores, online dating, credit score dating, credit counselors, credit historiesWhat do you mean by good credit scores have sex appeal? We all know that if you want to borrow money, buy a house, purchase or lease a car…… you need a good credit score. But, did you know that now you may need a good credit score to find love? We live in the age of online dating and there are niche market online dating sites for just about everything – religion, age, weight, location, hobbies….. Now there are actually websites called CreditScoreDating.com and DateMyCreditScore.com for those who believe that a good credit score is a prerequisite for a good date. This is not a strange, “out there” anomaly; credit counselors report that many of their clients come to them because their romantic partners refuse to get married before they eliminate their debt. And, according to the New York Times, more people are adding credit scores to their social filters. People with poor credit histories, low scores, or no scores might be starting to find it more difficult to find long-lasting love.

In the 60s potential dates wanted to know your astrological sign. Now they’re asking for your credit score. Is this progress? Will the matchmakers of the future be financial planners and accountants? Do you think that credit scores should play a significant role in choosing a mate?

Contact Ira Smith Trustee & Receiver Inc. We’re not matchmakers, but if you have serious debt issues and a poor credit score, we can help. Starting Over, Starting Now you can live a debt free life and perhaps find love.

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CAN YOU BANKRUPT A DEAD PERSON? DEATH OF A DEBTOR, PART 1

death of a debtor, insolvent, insolvency, bankrupt, bankruptcy, boomer retirees, debt, debt products, what is a consumer proposal, what is bankruptcy, vaughan bankruptcy, living wills, funeralsIf you have an aging or aged parent, you no doubt have had discussions surrounding living wills, end of life medical decisions and funerals. However, there is one topic that many families consider taboo – money – because many adult children consider it disrespectful to discuss finances with their parents. But, the truth is that many seniors in Canada are struggling. We began this discussion in our Blog “Grey Divorce Can Create Serious Debt For Boomer Retirees” but serious debt is not the exclusive domain of seniors that are divorced; it is rampant across the demographic. It may shock you to know that Canadians over the age of 65 now have the highest insolvency and bankruptcy rates for their age group and seniors were 17 times more likely to become insolvent in 2010 than they were 20 years ago, according to the Vanier Institute’s 13th annual “Current State of Canadian Family Finances: 2011—2012 Report.” Can you bankrupt a dead person? Can you bankrupt a dead person? Find out here in what we call “Death of a Debtor”.

A TD Bank study revealed that:

  • Debt among the 65 plus age group increased 15% in 2012
  • The average debt for those 65 and older increased by about $6,000 since 2011
  • Average debt among this group is $47,500

A CIBC study revealed that:

  • 59% of retired Canadians currently hold some form of debt
  • Only 27% of retired Canadians said they have made an extra lump sum payment towards their debt in the past 12 months
  • On average, retired Canadians carry 1.65 debt products with a balance (including mortgages, lines of credit, loans and credit cards)

What will happen if your parent(s) pass away in debt? You really have only 2 options?

  1. Pay the debts
  2. Let the estate go bankrupt

We recognize that this is an emotionally charged issue, but just because your parents were insolvent doesn’t mean that you have to be. Starting Over, Starting Now you can live a debt free life with help from Ira Smith Trustee & Receiver Inc. Contact us today and watch for our next blog – Is It The Ultimate Indignity To Bankrupt A Deceased Person? Part 2 – when we’ll be discussing what you can do if your parent(s) pass away in debt.

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TANK YOUR CREDIT SCORE RATINGS, DECLARE BANKRUPTCY, IMPROVE YOUR LIFE!

credit score ratings, bankrupt, Bankruptcy, Consumer Proposal, credit report, credit score, declare bankruptcy, insolvent, toronto bankruptcy, vaughan bankruptcy, what is bankruptcyAre you the poster child for financial responsibility? You have a good job, you take care of your family, your bill payments are all current and you have an excellent credit score. So, what can possibly be wrong with this picture and why would we think you should tank your credit score ratings, declare bankruptcy and improve your life?

The reality is that as many as 70% of bankruptcy filings are made by people with strong credit scores, according to TransUnion. Why isn’t a great credit score a predictor of whether or not someone will go bankrupt? “Many people are hopelessly insolvent but they’re not delinquent. From a credit report they are making their payments on time but they’ve got no reasonable prospect of ever paying this debt off,” said Mr. Mantin, senior vice-president of E. Sands & Associates Inc. According to Ira Smith, President of Ira Smith Trustee & Receiver Inc., “This is a very telling comment. Most people believe that as long as you make the minimum payment, you are “current”, especially when it comes to credit cards, even though deep down you know that you will never be able to pay off the debt. Current used to mean that when you received the credit card statement, you paid off the balance in full and you were delinquent if all you made was the minimum payment. This is a huge societal mind shift.”

When you are staying afloat by making the minimum payments, it doesn’t take much to tip you over the edge. Any major life changing experience can do it – loss of job, divorce, serious health issues, unexpected major expense – and all of a sudden you go from paying your bills on time and having a great credit score to not paying your bills and looking at bankruptcy.

What should you do? If you are struggling with a mountain of debt, even if you are making your monthly payments and have a great credit score, contact Ira Smith Trustee & Receiver Inc. A great credit score won’t solve your debt problems, but a consumer proposal or bankruptcy can help you both financially and emotionally, alleviating the monthly stress when the bills are due. Starting Over, Starting Now you can take charge of your financial future and improve your life.

Call a Trustee Now!