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BANK OF CANADA INTEREST RATE HIKE: THE HARSH REALITY WHY CANADIANS FEAR INTEREST RATES GOING UP

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Bank of Canada interest rate hike: Introduction

Unfortunately for many Canadians, their fears are about to be realized. On Wednesday, January 17th the Bank of Canada interest rate hike began. The Bank of Canada raised its key lending rate by a quarter percentage point to 1.25%. This is the third time it’s moved its benchmark rate from once-record lows last summer.

Bank of Canada interest rate hike: How will changes in the prime lending rate affect Canadians?

Changes in the prime lending rate affect variable-rate mortgages, lines of credit and other lending linked to the benchmark rate, and this means that borrowers will be paying more. And the Bank of Canada interest rate hike has a ripple effect.

The Royal Bank of Canada raised its prime lending rate by a quarter of a percentage point, to 3.45%, effective Thursday, January 18th. Canadians expect that Canada’s other big banks will do the same. Already all of Canada’s Big Six banks raised their listed five-year mortgage rates by 15 basis points to 5.14%.

It’s now going to be more difficult for home buyers to qualify for mortgages, particularly with the new stricter guidelines. As you can see, a rise in interest rates can have far-reaching effects.

Bank of Canada interest rate hike: Reasons Canadians are concerned

With so many Canadians walking a financial tightrope, the last thing they wanted to see was an increase in interest rates. A recent survey by Ipsos showed that:

  • 48% of Canadians are within $200 of not being able to meet their financial obligations
  • 40% of Canadians worry that they’ll be in financial trouble if interest rates keep rising
  • 33% of Canadians can’t keep up with their monthly bills and make their debt repayments
  • 30% of Canadians are concerned that rising interest rates could push them close to bankruptcy

Bank of Canada interest rate hike: Are you worried about the interest rate hike?

If you’re like many Canadians who worry that the rise in interest rates will push you over a cliff financially, now is the time to seek professional help. A licensed trustee can give you answers, options and a realistic plan for recovery.

Contact Ira Smith Trustee & Receiver Inc. We’ll 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. Give us a call today and Starting Over, Starting Now you can be on your way to debt free living.

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PERSONAL BANKRUPTCY IN ONTARIO CANADA: THE SOLUTION TO YOUR NAGGING DEBT?

Declaring personal bankruptcy in Ontario Canada: Introduction

Facing serious financial difficulties is devastating, especially if you believe that declaring personal bankruptcy in Ontario Canada 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. Insolvency is a financial condition; bankruptcy is a legal state.

Bаnkruрtсу is a legal рrосеѕѕ under the Bankruptcy and Insolvency Act (Canada) (“BIA”) that help 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 streamlined 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 administrative provisions. Don’t worry about these distinctions right now. For now, just know that the summary administration rules are shortened. The cost of this type of bankruptcy administration is fixed by a tariff set by the Superintendent of Bankruptcy.


Declaring personal bankruptcy in Ontario Canada: A summary of the bankruptcy steps

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 use the proceeds to рау for the bankruptcy administration and then distribute to уоur сrеdіtоrѕ.

If you have very little property, all of it may be рrоtесtеd. In that case, you will not lose it. How much уоur сrеdіtоrѕ will get in this process dереndѕ on how much уоur unрrоtесtеd property can be sold fоr and whether you will be required to pay “surplus income” to your LIT (more on
this later).

The final step of your bankruptcy process will be to get your discharge from your debts. This means that you will not have to рау them (with certain exceptions).

Declaring personal bankruptcy in Ontario Canada: Know the basic rules BEFORE filing for bankruptcy

Gеnеrаllу, going through bankruptcy helps реорlе with debts get a fresh start. Hоwеvеr, many реорlе have false ideas about how it can help them. Bеfоrе deciding you need to fіlе for bаnkruрtсу, you should know some of the bаѕіс rules. That way you will know what bankruptcy can and cannot do for you.

Declaring personal bankruptcy in Ontario Canada: What bаnkruрtсу may do for you, dереndіng on your sіtuаtіоn

  1. Dіѕсhаrgе уоur unѕесurеd debts; depending on your assets and income, you may not рау or lose anything. If you do, you will рrоbаblу рау less than you owe.
  2. Give you a short-term “аutоmаtіс stay” аgаіnѕt уоur сrеdіtоrѕ.
  3. As opposed to bankruptcy, one of the bankruptcy alternatives under the BIA will help you work out a repayment plan that lets you take longer to рау your debt and/or рау less than you owe. If your budget allows for this approach, the (consumer) proposal, allows you to keep property that ѕесurеѕ a debt. Examples of such assets would be your home or car. It can also allow you to keep nоn-еxеmрt аѕѕеtѕ that you would рrоbаblу lоѕе in a bankruptcy filing. This is one bankruptcy alternative.

Declaring personal bankruptcy in Ontario Canada: What bankruptcy does not do for you

Getting a dіѕсhаrgе of уоur debts through the bankruptcy process will not discharge:

  1. Any award of damages by a court in civil proceedings in respect of:
    1. i) bodily harm intentionally inflicted, or sexual assault, or
       ii) wrongful death resulting therefrom
  2. A debt or liability for alimony or alimentary pension.
  3. Any debt or liability arising under a judicial decision establishing affiliation or in connection with support or maintenance, or under an agreement for maintenance and support of a spouse, former spouse, former common-law partner or child living apart from the bankrupt.
  4. Debt or liability arising out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity or, in the Province of Quebec, as a trustee or administrator of the property of others.
  5. Any debt or liability resulting from obtaining property or services by false pretenses or fraudulent misrepresentation, other than a debt or liability that arises from an equity claim.
  6. Liability for the dividend that a creditor would have been entitled to receive on any provable claim not disclosed to the trustee unless the creditor had notice or knowledge of the bankruptcy and failed to take reasonable action to prove his claim.
  7. 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;
    iii) any debt or obligation in respect of a loan made under the Apprentice Loans Act where the date of bankruptcy of the bankrupt occurred: a. before the date on which the bankrupt ceased, under that Act, to be an eligible apprentice within the meaning of that Act, or

    b. within seven years after the date on which the bankrupt ceased to be an eligible apprentice; or
  1. Any debt for interest owed with an amount referred to in the above list.declaring personal bankruptcy in ontario canada

Declaring personal bankruptcy in Ontario Canada: More things bankruptcy does not do for you

  1. The bаnkruрtсу court can refuse to dіѕсhаrgе your debts if it finds that you are abusing the рrосеѕѕ. Thеrеfоrе, you cannot run up debt just before filing for bаnkruрtсу and automatically have it forgiven. The Court will look at what you ѕреnt the money on and can deny you a discharge if it finds that you have abused the ѕуѕtеm. You must be truthful and not try to hide аѕѕеtѕ.
  2. Will not help you with any debts you take on during and after you begin the bаnkruрtсу рrосеѕѕ.
  3. Will not give you a clean slate on уоur credit report (except to show what debts have been dіѕсhаrgеd). Bankruptcy reduces your credit rating to R9. This rating remains on your record for 6 years after your discharge for the first time bankrupt. These ratings are set by the relevant credit bureaus whose rules may vary.
  4. Will not protect some kinds of іnсоmе and рrореrtу you get during the соurѕе of the bankruptcy until you are discharged (such аѕ іnhеrіtаnсе, tax refund, gifts, lottery winnings).
  5. May not dіѕсhаrgе all of уоur debts without some ѕасrіfісеѕ. If you have very few аѕѕеtѕ and little іnсоmе, you may not lоѕе anything. Debtors with more assets and income above the poverty line can lose some of their assets and have to pay surplus income.
  6. Will not allow for your discharge after 9 months if you are required to pay surplus income. A first time bankrupt must pay surplus income for 21 months and a second or more time bankrupt will have to pay surplus income for 36 months. Whether or not a first time bankrupt will be entitled to an automatic and absolute discharge after paying the required surplus income depends on the specifics of your circumstances.
  7. A second or more time bankrupt is not entitled to an automatic absolute discharge and there must first be a Court hearing to decide what form of discharge is most appropriate given your circumstances.

Filing fоr bаnkruрtсу is a big deal

Declaring personal bаnkruрtсу in Ontario Canada is a big deal. It can be a trеmеndоuѕ rеѕоurсе for the honest but unfortunate debtor who needs a new start. However, there are rules, rеѕtrісtіоnѕ and fіnаnсіаl rаmіfісаtіоnѕ to соnѕіdеr before jumping in hеаdfіrѕt.

That is why the Ira Smith Team always looks first to see if one of the bankruptcy alternatives would be a better fit for you. The alternatives we look at with you include:

The Ira Smith Team has 50+ years of cumulative experience dealing with issues just like the ones that you’re facing. Give us a call today and let us give you back peace of mind Starting Over, Starting Now.

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HOLIDAY SPENDING MISTAKES IN CANADA: 12 SECRETS TO SOLVE THEM

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Holiday spending mistakes in Canada: Introduction

Other than for some last-minute small items, your holiday spending is complete. The credit card bills will arrive next month. You will soon find out if you made any holiday spending mistakes in Canada.

Maybe you overspent and will now have too much debt you won’t be able to repay. Perhaps you spent wisely, but it will put you over the top given your current debt level. Regardless, you now need to know how to help yourself financially from holiday spending mistakes in Canada.

Holiday spending mistakes in Canada: You are not alone being in debt

Are you fighting financial threats daily? Do you wish you could unlock how to help yourself financially? If so, you are not alone. Lots of Canadians have fought the good fight to barely survive. There have been many articles in the media of the dangers of living with way too much debt. Many Canadians are living paycheque to paycheque.

The Bank of Canada has warned Canadians for years now. With the rate of interest having been so reduced, Canadians have taken on much debt. Now interest rates are beginning to rise. You have to know how to help yourself financially, so that you will not only be able to make your minimum payments, but you will also be able to start reducing your debt. Your holiday spending mistakes has now increased the pressure on you. I do not want to see anyone living this way.

Holiday spending mistakes in Canada: Who this information will help

You know you have debt troubles and this information will help if you:

  • often pay expenses after the date they are due;
  • on a regular basis write cheques that don’t clear your bank;
  • use room from one charge card to get a cash advance to pay the minimum due on a different card;
  • get telephone calls from a debt collector;
  • routinely ask pals or relatives for money;
  • utilities are threatening to cut you off;
  • cannot live to a balanced budget based on your current family income;
  • need to take a second job just to meet normal daily living expenses;

Holiday spending mistakes in Canada: Statistics Canada reporting

Statistics Canada reported that on average, at the end of 2016, Canadian families have a debt-to-income ratio of $1.67 for each dollar of after-tax revenue. At the end of the second quarter of 2017, they report that the ratio has risen to $1.68. Although Canadians’ net worth is also rising, primarily due to rising housing prices. So now housing prices have dropped, yet the debt remains.

If this sounds like how you have lived, then you need to take corrective action now from your holiday spending mistakes before it is too late. Bankruptcy should not be your first option. There are bankruptcy alternatives which include credit counselling, debt consolidation and a consumer proposal.

holiday spending

Holiday spending mistakes in Canada: Our 12 secrets on how to help yourself financially

If you are living in a debt threatening zone, it is currently the time to act to turn things around. Consider the following 12 secrets to stop your debt from spiralling out of control.

  1. Safeguard Your Health – Make sure that you are taking good care of yourself and your health, both physical and mental. You won’t be any good to yourself or your family if you are ill.
  2. Don’t Talk Yourself Out of What You’re Worth – Don’t put up with the things as they are of your job without seeking out new opportunities. Don’t sell yourself short. Make sure you understand if there are opportunities awaiting you that will pay you more than you are currently earning. Stay current on your marketable skills.
  3. Keep It Simple – Don’t over-complicate things. Don’t get involved with difficult payment plans. Put yourself in a position where if you need an essential item, you can pay for it. Don’t get sucked in by sexy advertisements for things that have long-term payment plans.
  4. Give to Your Future Before Giving to Others – There are many worthwhile causes that clamour for our money. Make sure your own house is in financial order before you give to others. Volunteer your time and not your money. You will find it very rewarding and you will be helping both yourself and others at the same time. Just say no to relatives and friends who ask you for money, until you have no debt yourself.
  5. Make Savings Automatic – Otherwise known as pay yourself first. Set up a special bank account and have the same percentage hived off of your paycheque every payday. Do not touch the funds in that special bank account, until you have enough money to invest in a safe investment. Have this money work for you over and over.
  6. Control Your Impulse Spending – Make sure that you have a monthly budget and follow it. Your budget should account for all your necessary living expenses for you and your family AND allow the percentage you are hiving off each pay period for your investment savings account. If there is anything left over, this balance should be used for debt reduction. Don’t buy on impulse as you will regret it.
  7. Evaluate Your Expenses, and live frugally – We can all get by on less than we think. This ties back into your budget. Make sure that your necessities of life and your regular payday savings are all accounted for. By cutting out expensive daily coffee drinks and other non-essential items, you will be surprised how much you will have leftover for debt reduction.
  8. Invest In Your Future – Upgrade your skillset. Take a course that will make you more marketable. Make room in your budget for this type of expense, as it will generate more income for you for the long-term future.
  9. Keep Your Family Secure – Involve your entire family in the family budget process. Everyone needs to be on the same page and working towards the same goals. Meet regularly to go over your real performance as compared to budget. When everyone knows the plan is working, they will all feel secure and try even harder.
  10. Eliminate And Avoid Debt – Make sure that you are not taking on any new debt. Use budgeting to make sure that you allow a certain amount out of your monthly budget for paying down debt. Even small amounts add up over time. You will see and feel the difference it makes in your life.
  11. Use The Envelope System – Set up a separate envelope for each of your weekly necessities, based on your budget. Only take out enough cash for those amounts and place the right amount of cash in each envelope. Do not use credit cards to pay for the necessities; just use the cash in each envelope. Make the cash in your envelopes last the entire week, then rinse and repeat.
  12. Pay Bills Immediately And Automatically – If you don’t like the envelope system, here is another idea. Pay as much as you can online from your bank account. Set up regular automatic monthly payments so that the bills are paid. You can also use this method for your regular payday savings account. Make sure you budget properly so that you realize what money is coming out of your account in a month automatically so that you don’t overdraw your bank account.

Holiday spending mistakes in Canada: Will you need immediate help from your holiday spending mistakes?

These 12 steps will ensure that you get back on the road to financial health as soon as possible. You can recover from your holiday spending mistakes.

If you find that you have too much holiday or other debt, debt collectors are harassing you and you can’t keep them all happy, then you need to take more action. I say more action because it will be in ADDITION to the above 12 steps. What you will need to do is to immediately speak to a professional trustee.

The Ira Smith Team has a cumulative 50+ years of experience helping people who are facing a financial crisis and we deliver the highest quality of professional service. Make an appointment for a free, no-obligation appointment today and Starting Over, Starting Now you’ll take your first steps towards financial freedom. We can devise a plan so you can come back from your holiday spending mistakes in Canada.

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POOR CREDIT PERSONAL LOANS GUARANTEED APPROVAL CANADA: REDUCE AND DON’T INCREASE DEBT TO IMPROVE YOUR CREDIT SCORE

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Poor credit personal loans guaranteed approval Canada: Introduction

Legit companies do not give poor credit loans guaranteed approval Canada. If you’re experiencing significant economic problems and declined for a financing by conventional banks, do not be seduced by advertising that states “… poor credit personal loans guaranteed approval Canada …” even if you have bad credit or no credit.

Poor credit personal loans guaranteed approval Canada: They try to trick you with seductive marketing slogans

They use catchy marketing tag lines such as:

  • 100% Free, Bad or No Credit, Great Terms, $0 Down, Fast, Apply Now!
  • Borrow Up To $5,000 With Affordable Payments. Find out more & Get Started!
  • No Credit Check Loans. Negative Credit Loans. Payroll Loan. Payday Loan.

Or they send either an email or letter in the mail offering you a bad credit loan, student loan, mortgage, negative credit score loan, or a fantastic bad credit, credit card offer.

Poor credit personal loans guaranteed approval Canada: Beware of the scammers!

They may seem to be genuine yet beware! They will certainly ask you for your personal ID and financial info; and that is where your issues will certainly begin.

These are rip-offs! They are victimizing you because they know you are desperate and will not stop until you get the funding from someone for a bad credit loan.

Poor credit personal loans guaranteed approval Canada: What the Canadian Anti-Fraud Centre has to say

According to the Canadian Anti-Fraud Centre, advertisements that promise guaranteed approval loans generally show up online or in city and national newspapers, magazines and tabloids. Remember, just by advertising through reputable media outlets does not make the business behind the ad honest or legitimate.

Poor credit personal loans guaranteed approval Canada: The up-front fee scam

These companies usually ask you to pay an up-front fee before they will start work. This fee might vary from hundreds to thousands of $$$. You rarely get your funding after paying the up-front fee. If you do, it is on the most onerous terms. You can never get your money back.

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Poor credit personal loans guaranteed approval Canada: How to fix your bad credit and debt issues

If you have actually been declined for a loan through a normal lender, then that is a signal that you have debt concerns that have to be handled. Companies that advertise poor credit personal loans guaranteed approval Canada are scams. They are not the solution to your troubles; expert help is.

Contact Ira Smith Trustee & Receiver Inc. today. We are professional trustees. As such, the Canadian government licenses and supervises us. First, we will assess your situation and help you to come to the very best possible solution for your troubles.

When you come to us for your free consultation, we first check and figure out with you if one of the bankruptcy alternative choices is best for you. These include credit counselling, debt consolidation or a consumer proposal. If none of those options are available to you, only then will we discuss the bankruptcy route. Starting Over, Starting Now we can help recover you to financial health.

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poor credit personal loans guaranteed approval canada
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DEBT ELIMINATION: ARE YOU SABOTAGING YOUR WEALTH BY SAVING AND REDUCING DEBT?

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Debt elimination: Introduction

What’s more important – saving or reducing debt? Should I focus on debt elimination or invest excess funds? Should I invest or reduce debt.

These are age-old questions that I’m frequently asked and there isn’t a one-size-fits-all answer. Let’s get back to basics and figure out what your income and expenses are before I can answer whether it’s better for you to save or reduce debt.

Debt elimination: Create a budget

Everyone should have one. The reality is that many people spend what they earn but don’t really know what they’re spending their money on. A budget will find how you’re currently allocating your money – which may be very different from how you should be allocating it.

  • Detail your income
  • Itemize your fixed expenses which are the same each month – housing, insurance, payments on loans, etc.
  • List your variable expenses which are flexible and will vary from month to month – groceries, gas for the car, cell phone, etc.
  • Identify your optional expenses which are non-necessities – meals out, clothing, vacations, etc.

The good news is that to ask “Should I invest or reduce debt”, that means your budget should confirm that you have an excess of income over expenses each month. It also means that you can see that monthly cash excess in your bank account.

Debt elimination: Determine what type of debt you’re dealing with

The reality is that not all debt is created equal. Credit card debt could be costing you 20% interest or more per annum. And, if you have any payday loans, the interest rate could be over 500% (no, this isn’t a typo). High interest debt costs a fortune; pay it off as quickly as possible.

Debt elimination: Create an emergency fund

I always recommend that you have an emergency fund of three to six months worth of living expenses. Job loss or an unexpected expense can put you in a financial danger zone if you’re not prepared.

Debt elimination: Where can you find the money to pay off high interest debt and create an emergency fund?

Go back to your budget and have a good hard look. How many of your optional expenses can you cut or cut back on? E.g. Forgo the vacation for now, don’t buy those really cute shoes, etc.

How much of your variable expenses can be reduced? E.g. Shop at a discount supermarket and price match/use coupons, comparison shop for better cell phone plans, drive less/take public transit more, etc.

You’d be amazed how much money you’ll be able to save and put toward paying off high interest debt and creating an emergency fund.

Debt elimination: Should I invest or reduce debt?

The answer to the question about what’s more important – saving or reducing debt, lies in your budget. If you have high interest debt, pay it off first. If you don’t have high interest debt then you can work on both reducing debt and saving and investing at the same time.

Debt elimination: Are you struggling with debt elimination?

If you’re struggling with too much debt, give the Ira Smith Team a call. We can help with budgeting and credit counseling so that you can get back on track Starting Over, Starting Now.

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#VIDEO – SUBPRIME CANADA: LOANS NOT HURTING THE HOT GTA REAL ESTATE MARKET OR ONTARIO#

Subprime Canada loans the introduction

Our vlog this week is on how subprime Canada loans are not hurting the GTA real estate market, or the Ontario economy at all. Last Tuesday, we published our blog titled PERSONAL INSOLVENCY: DROP IN OIL PRICES SERIOUSLY IMPACTING CANADIANS FINANCIALLY. One of our findings was that in Ontario, the rate of insolvency filings declined.

The reason is simple. The Ontario economy is not dependent on higher oil prices for its strength.

When I think of subprime lending, I think of the meltdown in the US economy in 2007 and 2008, and all the people who lost their homes. As can be seen in this year’s Presidential election, there is a lot of unhappiness in the US about many things, including jobs, wages and the economy. Globally everyone is looking for change; Canada’s Liberal party under Justin Trudeau and their sweep to power and the recent Brexit vote, are merely two recent examples of the global wish for change.

Recent TransUnion data on subprime Canada lending

Recent data shows that subprime Canada lending, is not having an effect on the Canadian economy and certainly is not hurting the hot GTA real estate market or Ontario. The data points out some interesting trends:

  • subprime Canada lending is becoming a bigger part of Canada’s economy
  • the average amount owed on Canadian credit cards rose by 1.8 per cent over the past year, but among subprime borrowers, it rose 5.7 per cent in a year
  • among less risky borrowers with good credit ratings, credit card balances have been declining, by 1.5 to 4.7 per cent over the past year

“Average balances haven’t moved much, if you consider all Canadians together,” TransUnion director of research and analysis Jason Wang said in a statement.

“But once we segment by risk tiers, we find a gradual shift where subprime consumers are increasing their share of the debt load relative to the low-risk population.”

The TransUnion research included the following types of subprime lenders and subprime lending:

  • subprime mortgage lenders
  • subprime personal loans
  • subprime auto lenders
  • subprime credit cards

Subprime Canada delinquency rates

There are also regional differences in delinquency rates. The TransUnion data shows that delinquencies shot up in Alberta by almost 12 per cent, but declined in Ontario (and BC, who also has a hot Vancouver real estate market). Despite the growth in subprime Canada lending, TransUnion found that Canada has a generally healthy and well-functioning consumer credit marketplace, at least outside oil-exporting regions.

So what does this subprime Canada lending data mean

When you combine the catapulting delinquency and insolvency rates in the oil patch, and see that higher credit score people outside of the oil patch are reducing debt and their delinquency rates, it points out the regional disparities. It shows how the oil patch economy is suffering due to low oil prices. It shows me that sustained low oil prices will only keep the hurt going in the provinces that are dependent on higher oil prices for jobs and consumer spending.

What should you do if you have too much debt and can’t borrow more even in subprime Canada?

In our earlier blog titled SUBPRIME PERSONAL LOANS SECRETS REVEALED, I advised that if you can’t qualify for a traditional loan, a subprime loan is not the answer to your problems. High interest rate subprime personal loans are not an answer for being unable to repay your debts. Taking control of your debt with the help of a professional trustee is the answer.

Meet with one of our licensed insolvency trustees for a free consultation with Ira Smith Trustee & Receiver Inc.

We’ll discuss all your options. The options include bankruptcy alternatives – credit counselling, debt consolidation and consumer proposals. We will also tell you about bankruptcy if that’s the best option for you.

There is a way out of your financial problems. We can offer the right solution for you. We will do so without resorting to a subprime loan 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

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Brandon Blog Post

PERSONAL BANKRUPTCY BLOG – TRUSTEE EXPLAINS BANKRUPTCY OPTIONS

Introduction

Our Brandon’s Blog certainly is a personal bankruptcy blog, but it is more than that. Brandon writes on various finance and insolvency-related topics including corporate restructuring, corporate bankruptcy, alternatives to bankruptcy, credit counselling, restructuring through a consumer proposal or a Division I Proposal or the Companies’ Creditors Arrangement Act (CCAA).

Every Monday and Wednesday night Brandon posts to Brandon’s Blog. Monday night is a blog and Wednesday night is a vlog. Just to remind you what this means, here are dictionary definitions:

blog Pronunciation: /blɒɡ/noun

A regularly updated website or web page, typically one run by a person or small group, written in an informal or conversational style: you can add personal bankruptcy blog to the growing list of insolvency-related material popping up on the Web

vlog Pronunciation: /vlɒɡ/ noun

A blog in which the postings are primarily in video form: you can add personal bankruptcy vlog to the growing list of insolvency-related material popping up on the Web

Differences between US and Canadian insolvency statutes

In the United States, people filing for bankruptcy have many “chapters” from which to choose. Similarly, Canada has one chief insolvency law, the Bankruptcy and Insolvency Act, or BIA, and several supporting pieces of legislation. In perusing a personal bankruptcy blog, the potential filer can find the information he or she seeks.

In the United States, Chapter 11 bankruptcy is the most complex because it applies to large businesses and usually involves gigantic sums of money. In Canada, the equivalent is the Division I proposal. In such a proposal, the debtor’s business can keep assets necessary for its role so that it can generate streams of income from other places to repay its debts. Management also stays in control of the company and business operations.

What are the Choices in Canada?

The BIA sets out the ground rules, and several smaller pieces of legislation fill in the details. Although we Canadians don’t call them various chapters, our legislation is like that of the U.S. Here are the options for filing bankruptcy in Canada:

Personal bankruptcy in Canada is most similar to Chapter 7 in the U.S. By filing bankruptcy, the debtor seeks to deal with his or her entire debt load at once. The debtor does not believe that he or she has the means to attempt a restructuring. There are certain assets that are exempt for any one of a number of reasons, so anyone filing bankruptcy should consult a Trustee to find out more.

If a debtor decides to file a consumer proposal (because his or her debt load is $250,000 or less, not including any mortgages against the principal residence) or a Division I Proposal (for unsecured debts $250,000 or greater) instead, he or she is seeking a restructuring of debt so for repayment over a five years or less. Many times, debtors can negotiate with their creditors for part of the amount owed and work out deals on monthly payments, rates of interest, and other such considerations. A proposal is most similar to Chapter 13 in the U.S. and used by people who wish to AVOID bankruptcy.

Basically, the business operates as usual while making an offer to its creditors of payments over time, totalling an amount greater than the creditors would receive if everything was sold off in liquidation in bankruptcy. The largest businesses might even have several layers of debt that would need restructuring as part of a Division I proposal, and each layer might have different guidelines and restrictions based on the proposal.

For companies with greater than $5 million in debt, they could also make use of a different Federal restructuring statute called the Companies’ Creditors Arrangement Act (CCAA). Both the Proposal under the BIA and restructuring under the CCAA are for large complex corporate reorganizations.

Is a Lawyer Required?

Unlike citizens of the United States, Canadians don’t need a lawyer to file for bankruptcy. A Licensed Insolvency Trustee acts as the “referee” between debtor and creditors. In this way, people file and handle bankruptcy proceedings on their own in Canada. If the debtor has various complex issues or is a defendant in litigation where the plaintiff wishes to continue the litigation perhaps to attempt to prove that their claim is one not released by the person’s discharge from bankruptcy, then they may very well need a lawyer for those issues.

What to do if you have too much debt and want to read a personal bankruptcy blog?

To find out more, check out our Brandon’s Blog entries for the topic of personal bankruptcy blog. 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

personal bankruptcy blog

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

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

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CANADIAN BANKRUPTCY EXPERT: GO TO A LICENSED INSOLVENCY TRUSTEE

canadian bankruptcy expertCanadian bankruptcy expert introduction

There are several misconceptions when it comes to the Canadian bankruptcy expert known as a licensed insolvency trustee and that the role of the trustee is only for the bankruptcy process. It is true that a licensed insolvency trustee is the Canadian bankruptcy expert, but it is not the case that a licensed insolvency trustee only can administer Canadian bankruptcies.

  1. Misconception # 1 is that trustees only deal with bankruptcy. Although you may know that a trustee is a Canadian bankruptcy expert, they’re also highly trained and educated debt consultants who, depending upon your particular circumstances, can offer you several alternatives which include credit counselling, debt consolidation and consumer proposals.
  2. Misconception # 2 is that because it is a legal process, you need a lawyer. Although you may have heard many radio commercials telling you that you need a lawyer if you’re going to declare bankruptcy, and if you are dealing with income tax debt to keep using a certain lawyer and not a licensed insolvency trustee, this is simply not the case. Even though it is is a legal process, to file bankruptcy in Canada you need the services of a licensed insolvency trustee. In fact, bankruptcies and consumer proposals can only be administered in Canada through a licensed insolvency trustee.

What is the role of a trustee?

The Office of the Superintendent of Bankruptcy (OSB) licenses trustees to administer bankruptcy proceedings. When you file for bankruptcy, the trustee becomes the administrator of your property and assets.

Why use a trustee instead of a debt settlement company?

Debt settlement companies can’t administer a bankruptcy or a consumer proposal – ONLY a licensed insolvency trustee can. In addition a trustee:

  • is federally regulated
  • has undergone a background check by the RCMP before being granted a licence
  • is subject to a stringent code of ethics
  • maintains his/her competency by completing ongoing mandatory professional development each year
  • The Federal Government and the Court regulate trustees’ fees and for consumer matters, they are usually less than the fees of the debt settlement companies who make unsubstantiated claims

What should you do if you or your company have too much debt?

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

We’re experts in dealing with debt. 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. Read our blog next week when we’ll be discussing how to choose a licensed insolvency trustee.

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SUBPRIME PERSONAL LOANS SECRETS REVEALED

subprime lending, subprime loans, subprime borrowers, trustee, bankruptcy, bankruptcy alternatives, credit counselling, debt consolidation, consumer proposals, subprime personal loans, cctvnews, subprime lenders, subprime, prime lending, subprime auto loans, subprime loan, subprime mortgage lending, subprime crisis, predatory lending, big short, subprime lending, subprime loans, subprime borrowers, trustee, bankruptcy, bankruptcy alternatives, credit counselling, debt consolidation, consumer proposals, subprime personal loansWhat are subprime personal loans?

Subprime personal loans lending is dangerous business. It was instrumental in pushing the U.S. financial system to the brink of collapse from 2007 – 2008.

You may have read the book or seen the movie The Big Short. It is a 2015 American film directed and co-written by Adam McKay. It is based on the non-fiction 2010 book of the same name by Michael Lewis. It is about the financial crisis of 2007–2008, triggered by the United States housing bubble. The film stars Christian Bale, Steve Carell, Ryan Gosling and Brad Pitt.

Now, could subprime lending spell doom for Canada?

What is subprime lending?

Subprime personal loans lending refers to giving loans to individuals who don’t qualify for prime rate or regular loans. The reason they don’t qualify is usually because of poor credit ratings. There could also be other factors that set off red flags about their ability to repay the loan. As a result subprime loans carry a higher interest rate than normal loans. This is because of the increased risk that the borrowers will default on payment.

Subprime lending (also referred to as near-prime, non-prime, and second-chance lending) means making loans to people who may have difficulty maintaining the repayment schedule. Their diffculty is sometimes reflecting setbacks, such as unemployment, divorce or medical emergencies.

What is the state of subprime lending in Canada?

According to TransUnion, subprime lending is becoming a bigger part of the credit business in Canada.

  • The average amount owed on Canadian credit cards rose by 1.8% over the past year
  • But among subprime borrowers, it rose at more than triple that rate, up 5.7% in a year
  • The share of Canadian mortgage-holders with high debt levels (above 500% of disposable income) jumped from 3% in 1999 to 11% by 2012
  • Debt delinquencies are on the rise. The share of indebted consumers who failed to make a debt payment for 90 days rose by almost 3% over the past year

What to do if you think you need another loan but can no longer qualify for a normal loan

If you can’t qualify for a traditional loan, a subprime loan is not the answer to your problems. High interest rate subprime personal loans is not an answer for being unable to repay your debts. Taking control of your debt with the help of a professional trustee is the answer.

Make an appointment for a free consultation with Ira Smith Trustee & Receiver Inc.

We’ll discuss all your options. The options include bankruptcy alternatives – credit counselling, debt consolidation and consumer proposals. We will also tell you about bankruptcy if that’s the best option for you.

There is a way out of your financial problems. We can provide the right solution for you. We will do so without resorting to a subprime loan Starting Over, Starting Now.

Call a Trustee Now!