Tag: debt consolidation

BANKRUPTCY IN CANADA: THE STEP-BY-STEP CANADIAN PERSONAL BANKRUPTCY PROCESS

Post author By Brandon Smith
Post date February 5, 2020

Introduction

The purpose of this Brandon’s Blog is to explain to you the personal bankruptcy in Canada process. By doing so I hope it will be a less scary topic for you.

Are you insolvent?

The first step is meeting with the trustee to explore options. The first thing the licensed insolvency trustee (formerly called a bankruptcy trustee) (Trustee) needs to determine is if the person is insolvent.

Insolvent means that you cannot pay your debts as they come due and that if you liquidated all of your assets it would not be enough to repay all of your liabilities. If you’re not insolvent then you cannot take advantage of the provisions of the Bankruptcy and Insolvency Act (Canada).

What are my options?

If you’re not insolvent the options that are available to you are:

help with your budgeting;
perhaps credit counselling mixed in with that to help you better understand your income and expenses; and
how to live within your means

Perhaps also there is the opportunity, if you still have a good enough credit score, to get a debt consolidation loan. This would be a loan that would be equal to the total of all your other debts but at a lower interest rate and with a smaller monthly payment than the total monthly payments you currently need to make to stay current with all your debts.

If you are insolvent then the options available to a person is either a:

consumer proposal; or
bankruptcy

bankruptcy in canada

The purpose and topic in this blog are bankruptcy so that is what I will focus on. There will be other videos made on the topics of a consumer proposal, budgeting, credit counselling and debt consolidation.

How does bankruptcy in Canada work?

So the personal bankruptcy in Canada process as I mentioned starts with meeting the Trustee to explore your options. Then with the Trustee, determining whether or not you are insolvent and then making the right choice. Does that mean that bankruptcy is the best process for your needs, or can you avoid bankruptcy?.

So given that we’re talking about bankruptcy in Canada, what are the steps? First, the Trustee will prepare the documentation for your review. The documentation consists mainly of the assignment in bankruptcy document, your statement of affairs and your monthly family budget.

The statement of affairs is a multi-page document that indicates what your assets are and the names and addresses and individual amounts owing to each of your creditors. Your monthly family budget shows your monthly cash in and cash out.

An important part of the bankruptcy in Canada process is rehabilitation. Financial rehabilitation. So it is expected upon entering personal bankruptcy in Canada that your monthly family budget will balance. That is your income after tax will be sufficient to pay your monthly family expenses.

What does declaring bankruptcy mean in Canada?

Once that is all prepared and you’ve sworn your statement of affairs the Trustee can begin the bankruptcy process itself. That includes e-Filing the documentation I just spoke about with the Superintendent of Bankruptcy’s local office.

The Superintendent of Bankruptcy local office representative will review it to make sure that it is all in order. Then the local office will issue a certificate confirming your bankruptcy and the appointment of the Trustee.

It is at the time when the Superintendent actually issues the certificate that the person’s bankruptcy starts.

So when bankruptcy occurs then certain things must happen. The bankruptcy administration takes place. The bankruptcy administration will include:

Providing the trustee with any non-exempt assets that you may own. The Trustee will sell those assets to raise money to be able to make a distribution of some sort to your creditors.

The next part of the bankruptcy administration is that the bankrupt person must attend 2 counselling sessions for personal bankruptcy in Canada. These two counselling sessions are meant to help the person financially rehabilitate themselves.

You will discuss with the Trustee things such as budgeting, issues that led you into bankruptcy and how you can correct that behaviour and any problems you might be experiencing during the bankruptcy process.

Finally, if all goes well there is the bankruptcy discharge. That is where the person has made it through and upon their discharge, they are discharged of all of their debts other than those that might be secured, have a trust claim status or meet the definition of those few types of debts such as court fines and penalties that cannot be discharged by way of bankruptcy.

But things like credit card debt and income tax debt are discharged through the bankruptcy process.

Personal bankruptcy Canada

So if you have debt issues meet with a Trustee. There is no charge to do so and you will walk away with a better idea of how to fix your debt issues with or without resorting to personal bankruptcy in Canada.

I hope you enjoyed the bankruptcy in Canada video. The Ira Smith team is available to help you at any time. We offer sound advice and a solid plan for Starting Over Starting Now.

We understand your pain. We will make sure that no bill collectors call you. We will take all the headaches and stress you are experiencing off of your hands and put it onto our shoulders. We will fix things so that you can move forward in a healthy way, pain-free, guilt-free and debt-free.

It is not your fault that you are in this situation. You could not fix it yourself because you have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team uses new ways that will return you immediately to a stress-free life while getting rid of your debt.

So that you can immediately be well on your way to debt and stress-free life in no time, for more information on a no-cost basis, please call us now.

The Ira Smith Team comprehends just how to do a complex restructuring. However, more notably, we understand the needs of the business owner or the person that has too much personal financial debt. You are worried due to the fact that you are encountering significant economic obstacles.

It is not your mistake that you are in this scenario. You have been only shown the old ways which do not function anymore. The Ira Smith Team utilizes new contemporary ways to take you out of your financial debt problems while preventing bankruptcy. We can get you financial debt relief.

The stress and anxiety placed upon you is massive. We comprehend your discomfort factors. We look at your entire situation and also devise a technique that is as special as you and also your issues; economic as well as emotional. The methods we use takes tons off of your shoulders. We devise a financial debt negotiation strategy, we understand that we can help you.

We understand that individuals encountering monetary troubles need a reasonable lifeline. There is no “one solution fits all” method with the Ira Smith Team. That is why we can create a restructuring process as unique as the financial problems and also discomfort you are encountering. If any one of these seems familiar to you and you are serious about getting a solution, contact the Ira Smith Trustee & Receiver Inc. team today.

Call us now for a no-cost appointment. We will certainly get you or your firm back driving to healthy stress-free operations as well as save you from the discomfort factors in your life, Starting Over, Starting Now.

Tags Bankruptcy and Insolvency Act, bankruptcy canada, bankruptcy discharge, bankruptcy in Canada, budgeting, Consumer Proposal, debt consolidation, debt consolidation loan, how does bankruptcy in canada work, insolvent, Ira Smith Trustee, licensed insolvency trustee, Office of the Superintendent of Bankruptcy, personal bankruptcy, personal bankruptcy canada, trustee, what does declaring bankruptcy in canada mean

Brandon Blog Post

FILING BANKRUPTCY VERSUS DEBT CONSOLIDATION IN TORONTO ONTARIO

Post author By Brandon Smith
Post date January 14, 2020

Introduction

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

What is debt consolidation?

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

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

Getting that new loan

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

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

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

How does debt consolidation affect my credit score?

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

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

The side benefits

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

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

It is not the same as debt settlement

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

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

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

Filing for bankruptcy

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

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

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

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

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

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

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

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

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

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

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

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

Tags Bankruptcy, Consumer Proposal, credit score, debt consolidation, debt settlement, filing bankruptcy, filing bankruptcy versus debt consolidation, how does debt consolidationi affect my credit score, Ira Smith Trustee, is it better to file bankruptcy or do debt consolidation, what is debt consolidationj

Brandon Blog Post

CANADIAN DEBT RELIEF: WHAT ABOUT “Government Approved” GRIPPING DEBT PROGRAMS?

Post author By Brandon Smith
Post date October 21, 2019

If you would prefer to listen to an audio version of this Canadian Debt Relief Brandon’s Blog, please scroll down to the bottom and click on the podcast.

Canadian debt relief: What is debt relief Canada?

Canadian debt relief is the reconstruction of debt in any kind of form so as to give the indebted person or company a measure of breathing space.

Canadian debt relief measures can take a number of forms. It can be through an informal process or formal process (discussed below).

I just read a recently issued Scotiabank Economics report that says Canadians are going deeper into debt. With that in mind, I believe it important to describe the Scotiabank findings and then discuss the options available for reliable Canadian debt relief.

Canadian debt relief: The Scotiabank findings

The main Scotiabank findings are:

Canadian home credit increased to a 2-year high in August 2019.
Residential mortgage growth posted a 2-year high, supported by a mid-July 2019 decrease in the mortgage rate used for qualification under the stress testing as well as a decline in posted home mortgage pricing.
Consumer credit growth struck a 10-month high on the whole but the year over year pattern was the same as July 2019.

The increase in overall household credit was boosted by a much easier borrowing environment. The main types of debt were fuelled by a strong acceleration in both mortgage loans as well as non-mortgage consumer liability growth. Right now Canadians’ household debt-service ratio is at an all-time high. According to the Scotiabank findings, that has not stopped Canadians from continuing their borrowing binge. It seems that super-low interest rates and a strong job market are providing Canadians with either confidence or blind ignorance, to continue to borrow.

With unpredictability staying at raised levels and worldwide demand weakening, business financial investment and exports are not going to be a force to keep the Canadian economy strong. Therefore, it is essentially up to people buying homes primarily in the Vancouver and Toronto housing markets and general consumer credit demand, with government spending, to keep the Canadian economy strong. So, it seems that for the foreseeable future, the Bank of Canada will keep interest rates low. It seems that interest rates will only increase in reaction to events from outside the Canadian economy.

How debt relief works in Canada

It is not that difficult to qualify for real Canadian debt relief services. You need to be insolvent, or at least, be unable to pay your financial obligations as they come due. I am not talking about a consolidation loan that you need to apply for. If you are trying for approval from one of the debt consolidation loans providers, you also need to be able to qualify for a new loan. If you are applying for a Canadian debt relief program that requires you to get a consolidation loan, and you don’t qualify for the loan, then you will not qualify for that type of debt management plan.

However, for financial relief that does not involve you borrowing money, the bar to qualify is set very low. All you need is to admit that you have a debt problem. Once you do that, you can certainly get help from one of the Canadian debt relief alternatives.

I will describe the various levels of Canadian debt relief programs, but first, I want to answer a question I am asked regularly. The question is: Can you get credit card debt forgiven?

Canadian debt relief: Do credit card companies ever forgive debts?

I have never seen complete and full credit card forgiveness given by a credit card company (except for two situations described in this section). It is possible, to achieve partial credit card forgiveness, but it is not easy. Credit card companies generally will not give any form of forgiveness.

If you stop making your minimum payments, the credit card company will ultimately “ charge off ” a person’s credit card amount owing after giving them an R9 rating on their credit report. A charge-off takes place when an account is seriously overdue for credit card bills. That will be after 180 days of not making the minimum repayment.

Charging off the amount owing on the credit card is not writing it off or forgiving it. It is just a way for the credit card issuer to mark it as uncollectible and eliminate the debt from their active books. What is done when the debt is charged off, is that it is either given or sold to a collection agent. You may be able to make a deal with the collection agency to pay less than the full amount you owe. However, it will still be a substantial sum and has to be paid all at once.

There are only two exceptions to this I ever heard. One is a recent feel-good story. In August 2019, it was reported that Chase Bank announced that it was leaving Canada. Chase Bank issued and administered the Amazon.ca Rewards Visa and the Marriott Rewards Premier Visa in Canada. In order to exit Canada quickly, Chase Bank announced that it was forgiving all credit card amounts owed by clients of its two Canadian charge cards. Highly unusual.

The only other exception is not such a feel-good story. If a person dies and the deceased Estate has no cash available after the funeral and testamentary costs or worse, has no assets including cash, then the credit card company is going to have no choice but to write off the liability. The Estate Trustee will, of course, have to provide proof that there are no funds available.

Canadian debt relief: Informal options

There are various informal debt-relief options available in Canada. The most common options are:

Debt consolidation

When when we hear the words debt consolidation we understand that it is the process of qualifying for and taking on a brand-new loan, in order to repay many or numerous smaller debt obligations.

Consolidating debt involves borrowing money. The concept is that either:

your credit rating is good enough so that you can take on the new unsecured debt; or
you have decided to offer security for the loan.

The primary purpose of resolving your debt via this type of borrowing is to lower the overall interest costs you are currently paying across many credit cards and other debt.

Credit counselling

Credit counselling can solve debt problems and supplies you with the skills to live debt-free. Credit counselling solutions consist of teaching proper budgeting, how to use debt sensibly, rebuilding credit and debt management programs.

A word of caution. Please make sure that if you want a credit counselling program that has a qualified and licensed non-profit credit counsellor, you reach out to a real Canadian debt relief provider such as a credit counselling agency and not a debt settlement company.

The Financial Consumer Agency of Canada has provided a stern warning for consumers to be careful when considering using a debt settlement company. Do not be pulled into what looks like the cheapest Canadian debt relief company. The danger signals and warning signs that the Agency warns consumers about are:

High-pressure sales
Unrealistic assurances
High costs
Companies collecting monthly payments from you to pay to your creditors supposedly for an agreed-upon settlement amount but postponing repayments to the creditors and never coming up with a real Canadian debt relief plan.

Debt settlement

I have also written about the dangers of debt settlement companies. In 2017, I wrote about the study by the Office of the Superintendent of Bankruptcy (OSB) on debt settlement companies. The main findings of the OSB report were that in 2016:

The OSB record indicates that in 2016:

17 % of all consumer proposal filings, the customer reported having spent first for debt counselling from a debt settlement firm before being directed to a Licensed Insolvency Trustee (LIT) (formerly called a bankruptcy trustee).
57 % of the consumer proposal filings for which earlier debt settlement guidance was obtained, the LITs had connections with 2 large-volume debt settlement businesses. These 2 companies stood for 64 % of the total LIT fees reported in 2016 consumer insolvency filings for debt settlement advice before submitting to an insolvency proceeding with a LIT.
Thirteen LIT firms, that included one national-level business, were discovered to have numerous LITs operating in regular partnership with large-volume debt settlement firms.
For about 50 individual LITs within these 13 firms, better than 40% of their consumer proposal filings were sourced from these debt settlement organizations. For about 20 of those LITs, more than 90% of their consumer proposal work originates from these 2 businesses.

Debt settlement companies have long used scare tactics with consumers to attract business. They tell consumers that all a LIT wants to do is put them into bankruptcy. Nothing could be further from the truth. As seen by the OSB study results, consumers were paying debt settlement firms fees with money they could not afford to pay. When they could not pay any longer, the debt settlement company then referred the people to their favourite LITs! Now that is the pot calling the kettle black. The OSB was also concerned about the business arrangements being made between debt settlement outfits and LITs.

Since then, the OSB has introduced amendments to practices that LITs must follow concerning credit counsellors and business arrangements with a view to curb this behaviour. For the record, I and my Firm have no relationship with any debt settlement company.

Canadian debt relief: What about “Government Approved” debt programs?

There are only 2 Canadian government debt relief programs in our country: (i) consumer proposal; and (ii) bankruptcy, which is the most drastic one.

I have written about consumer proposals many times. A consumer proposal is the only structured formal procedure sanctioned by the Government of Canada under the Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) (BIA). This process permits insolvent people to make an official offer with specific terms, to pay their creditors less than the full amount owing in full settlement of all debts. This federal government authorized debt settlement strategy is to pay back only a portion of what you owe and you can take as long as 5 years of routine monthly payments to do so.

To qualify, a person must be insolvent and owe $250,000 or less to all creditors, other than for any financial debts protected security against their principal home. The most common examples are either a home mortgage or home equity line of credit registered against the real estate. The consumer proposal process provides protection from creditors. It is aimed at compromising unsecured consumer debts, including income tax debt, while the debtor makes regular payments. The end result of a successfully completed consumer proposal is debt cancellation of your remaining outstanding debts.

A consumer proposal is a streamlined process meant to either reduce or totally eliminate the need to go to Court. A successful consumer proposal allows the person to avoid bankruptcy while ultimately discharging all of his or her debts for an amount much less than the total amount owed.

Canadian debt relief summary

Since the purpose of this Brandon’s Blog is about eliminating your burden of debt before having to consider bankruptcy, I won’t discuss the bankruptcy topic here. Of course, anyone wanting to find out more about either a consumer proposal or bankruptcy can always call me.

Do you have way too much debt? Prior to you getting to the phase where you can’t make ends meet and your credit report looks awful, reach out to a licensed insolvency trustee (previously called a bankruptcy trustee). In fact, if you understand that you can’t pay your financial debts, contact us.

We understand the pain and stress excessive financial debt can trigger. We can aid you to get rid of that discomfort as well as address your financial problems by offering prompt action and the ideal plan to give you freedom from debt.

Call Ira Smith Trustee & Receiver Inc. today.

Make an appointment with one of the Ira Smith Team for a free, no-obligation consultation and you can be on your way to enjoying a carefree retirement Starting Over, Starting Now. Give us a call today so that we can help you get back to a stress and pain-free life, Starting Over, Starting Now.

Tags Bankruptcy, bankruptcy trustee, can you get credit card debt forgiven, canadian debt relief, Consumer Proposal, credit counselling, debt consolidation, debt relief, debt relief companies, debt settlement, government debt relief programs, How debt relief works in Canada, how do you qualify for debt relief, Ira Smith Trustee, licensed insolvency trustee, scotiabank consumer proposal, What is debt relief Canada

Brandon Blog Post

DEBT CONSOLIDATION IN CANADA: DEBT CONSOLIDATION CANADA REVIEWS

Post author By Brandon Smith
Post date September 18, 2019

Introduction

In Brandon’s Blog, I will be talking about both the advantages and disadvantages of debt consolidation in Canada. Generally, when we hear the words “debt consolidation”, we recognize that we are talking about a loan. We are taking on a new loan, in order to repay several or many smaller outstanding balances.

What is the smartest way to consolidate debt?

People have several choices when it comes to consolidating debt. It always involves borrowing. The theory is that either:

your credit score is good enough so that you can get an unsecured loan; or
you are choosing to offer security for the loan.

The primary objective of settling your debt through this kind of borrowing is to decrease the rate of interest you are currently paying. It is very common for people to have debts spread among various credit cards.

For example, you may have amounts outstanding on 5 credit cards. You are pushing the upper limits of your approved credit. The average annual interest rate you are being charged among those credit cards is 19.9%. If you can get a home equity line of credit at say, an annual interest rate of 5.5%, the benefit is obvious. So it would be a smart choice to offer security to get a consolidation loan.

If you didn’t want to or didn’t have security to offer, you may have a good enough credit score to get an unsecured personal loan. Let’s say you could get this kind of loan at an annual interest rate of 8%. The rate may sound high in today’s interest rate environment, but it is a lot better than 19.9%. So this too would be a smart way to go.

But as I will discuss below, there is a difference between being smart about debt consolidation and settling for what makes sense!

Is it a good idea to get a debt consolidation loan?

If you can get this kind of loan and you are wise about it (more on that in a little bit), I say yes. In the example of the 5 different credit cards I gave, you are juggling multiple debts carrying a high rate of interest and are running out of credit room. The debt consolidation loan will lower the interest you are paying dramatically and will term out your payments.

You will stop being a juggler. That is an advantage.

Should I get a loan to pay off my credit cards?

In a typical debt consolidation funding, you need to get a fixed, not variable, interest rate. You also need to have a fixed repayment schedule which offers you a set time to pay it off. You do not want a variable rate of interest or a revolving line of credit. You want the loan to be automatically reduced with every payment you make, with no chance of increasing the loan for any reason.

That is the kind of loan you need to pay off your credit cards. It is that predictability and certainty that you need to work into your life. If you can get that kind of loan to pay off your credit cards, then that is an advantage and you should.

What happens when you consolidate your debt?

What happens depends on the type of loan you get to consolidate your debt. The various types of loans I have seen people get are:

an unsecured personal loan from their bank
a home equity line of credit or second mortgage
A credit card balance transfer at a promotional interest rate of either a 0% or a special introductory very low rate
in more recent times, a peer to peer loan

I already spoke about the benefits of either a home equity line of credit or an unsecured personal loan. When it comes to a balance transfer, you can obtain introduction rates that are as low as 0% or 1.99% for a specific period of time, such as 12 or 18 months. You need to have sufficient credit available on such a new balance transfer credit card to assume the total debt spread among the 5 credit cards. With banks competing for your business, it may be possible.

What happens when you are able to consolidate your debts into one loan is that you achieve simplification in your life. You now have just one settlement to make. It’s much less to keep an eye on.

Simply put, simplicity is an advantage. As long as you stay current in your new loan payment, you are working towards paying off your total debt.

How does debt consolidation affect your credit score?

Initially, debt consolidation could improve or at least maintain your credit score. Falling behind on credit card balances hurts your credit score. Paying off those loans and being current on your new debt consolidation loan can improve your credit score. However, there are some traps that you cannot fall into. If you do, then you will not have ended up fixing anything and will end up worse off.

So a debt consolidation loan in itself does not hurt your credit score and could improve it as long as you meet the repayment terms of your new loan. A discussion of the traps leads us into a discussion of the disadvantages of this kind of loan. It is important to recognize that it is not a loan that is the problem, it is the person’s behaviour.

Does a debt consolidation loan look bad?

I would rather have a new loan showing up on my credit report, than have my 5 credit card loans going bad on my credit report. A debt consolidation loan is only a loan. Debt consolidation in itself is not bad, it doesn’t look bad. An experienced financial or credit person looking at your credit report will know what you have done. However, it will also show them that you have been able to get a new loan. So it shows that a lender feels you are a good credit risk. None of that is bad.

What is bad, are the traps that you could fall into. If you fall into one of them, it could be bad for you. This is all about your behaviour, not the consolidation loan.

The disadvantages of debt consolidation in Canada

I will discuss the disadvantages of the type of loan and by behaviour.

Home equity line of credit

If you get a home equity line of credit (HELOC) that is anything other than a fixed interest rate loan that is not a revolving line of credit, you could fall into a trap. You are looking for simplicity and certainty. If your interest rate can rise if the prime rate charged by your bank rises, then you are not getting the full benefits.

Granted a 5.5% loan isn’t going to rise to a 19.9% interest rate, but your room for interest rate increases may be small. If a 1% or 2% increase in the interest rate would make the difference between you being able to afford the repayment and not being able to make them, you will constantly be worried about it in an increasing interest rate environment.

You also want to make sure that the HELOC is not a revolving line of credit. Once you make a payment, you want the principal portion of a paydown by each payment to be permanent. You cannot be enticed about the ability to borrow more on the line. Remember, you took on this loan to pay off debt, not to either remain at the same debt level or to increase it.

So having to pay more interest or being able to go deeper into debt are two traps to avoid with this kind of loan.

A credit card balance transfer at a promotional interest rate

As I mentioned earlier, normally these zero or very low-interest promotional rate is for a fixed period of time. So if you can repay the whole amount, in the monthly payments required, within the time period given, it is a great thing. However, if you can’t, then your promotional interest rate goes up to probably at least the average 19.9% rate in our example. Now you are back to where you started.

Maybe you missed a payment; either because something got in your way or inadvertently. Normally when this happens, you immediately lose your promotional interest rate and a fee is charged. That is a disadvantage.

You may have used this method because you were being chased by a bank for your business, but could have used one of the other methods at the time. If that is the case, and you plan for replacing the promotional interest rate loan balance before it reprices, with one of the other methods, then great. However, if you don’t, then you are back to where you started. Maybe not worse off (see more below), but certainly no better, other than for the principal you were able to pay down.

An unsecured loan

Just like a HELOC, if the unsecured loan cannot revolve and has a fixed rate of interest, that is a good thing. If it does revolve and you have not paid down any principal, and/or your interest rate rose, that is a trap. That is a disadvantage.

Do consolidation loans work?

This is where we talk about the biggest trap or the greatest benefit. It all comes down to answering this one question. Has your behaviour changed?

Debt consolidation in Canada is a terrific device when your behaviour changes. The first step to changing your spending behaviour is to budget. I have written several of Brandon’s Blogs on the topic of the need to have a proper household budget and stick to it.

But what if your behaviour doesn’t change? Did you close out the 5 other credit card accounts when you did the debt consolidation loan? Or, did you keep them open and keep running up the balances for spending greater than your income, while paying down your debt consolidation loan?

They were paid down to zero when you consolidated them. Now you have run them back up and have only made the minimal necessary payments. So, once more, you have overspent and are now back to the same stress-filled life as before. There is only one thing different now – you owe even more money, so your life has worsened. Your credit score is probably worse now too.

So if you change your financial behaviour, debt consolidation works well. If you don’t, then it doesn’t either.

What can you do now that a debt consolidation is no longer an option?

There are various options available. Most will negatively impact your credit score and provide a worse credit report. However, when you have run out of options, perhaps a lower credit score stopping you from taking on more debt might be a good thing. Maybe the fact that no one will loan you more money is what you needed as a wake-up call to once and for all get back on track.

The options include:

***Credit counselling* *and budgeting***

Many people require aid with things such as:

budgeting
accomplishing certain financial objectives
a spending plan
learning how to use credit wisely

Often times as soon as this assistance is received, people can continue by themselves with no more troubles.

A consumer proposal or Division I Proposal

A consumer proposal and also a Division 1 proposal are alternatives to bankruptcy. Although equivalent in numerous facets, there are some substantial differences. Consumer proposals are used by people whose debts aren’t greater than $250,000, not consisting of any kind of financial debts registered against your home. Division 1 proposals are for both companies, and for people debts exceed $250,000 (again leaving out home mortgages).

A consumer proposal is a procedure under the Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) (BIA). With the licensed insolvency trustee (Trustee) you make a proposal to:

pay your creditors a portion of what you owe them over a certain period of time not greater than 5 years.
prolong the time you have to pay what you promise to pay in your accepted proposal.
a mix of both

Payments are made to the Trustee. That cash pays the administration fees of your proposal and distributes money to your creditors. When you have made all the required payments, the balance of your debt that you did not pay is written off and discharged forever (with certain exceptions outlined in the BIA).

These are your realistic options, once a debt consolidation in Canada option is no longer viable.

Summary

I hope this Brandon’s Blog has provided you with some insight into when debt consolidation is a useful tool and its advantages. I also hope you can see where it could also be a trap for some people. If debt consolidation relieves the pressure on you because of the state of your finances AND motivates you to budget and bring your spending in line, then it is a good thing.

If it does not change the necessary behaviour pattern that got you into financial trouble in the first place, then things will only get worse. Is it now time for you to take a positive step in the right direction to free yourself from your debts?

Are you in financial distress? Do you not have enough money to pay your creditors as your bills come due?

If so, call the Ira Smith Team today. We have decades and generations of experience assisting people looking for financial restructuring, a debt settlement plan and to AVOID bankruptcy.

A restructuring proposal is a government-approved debt settlement plan to do that. We will help you decide on what is best for you between a restructuring proposal vs bankruptcy.

Call the Ira Smith Team today so you can eliminate the stress, anxiety, and pain from your life that your financial problems have caused. With the one-of-a-kind roadmap, we develop just for you, we will immediately return you right into a healthy and balanced problem-free life.

You can have a no-cost analysis so we can help you fix your troubles. Call the Ira Smith Team today. This will allow you to go back to a new healthy and balanced life, Starting Over Starting Now.

Tags Bankruptcy and Insolvency Act, budgeting, consolidating debt, Consumer Proposal, credit card, credit report, credit score, debt consolidation, debt consolidation in canada, debt consolidation loan, debt consolidation loans, Does a debt consolidation loan look bad?, How does debt consolidation affect your credit score?, Is it a good idea to get a debt consolidation loan?, Should I get a loan to pay off my credit cards?, What happens when you consolidate your debt?, What is the smartest way to consolidate debt?

Brandon Blog Post

CREDIT COUNSELING: EVEN FREE MAY NOT GET YOU TO TALK

Post author By Brandon Smith
Post date June 19, 2019

Introduction

In my May 3, 2017, Brandon’s Blog, DEBT SETTLEMENT OR CONSUMER PROPOSAL CANADA: REPORT SAYS CONSUMERS HARMED, I told you about a Government of Canada research study. On April 28, 2017, the Office of the Superintendent of Bankruptcy (OSB), released its study. It revealed the OSB’s concerns about credit counseling services in Canada who were doing more than just counselling, be they for-profit or non-profit.

The concerns

The concern was that the consumer was being harmed. The main areas of concern for the OSB were:

Consumers paid more money than required if they had first seen a licensed insolvency trustee (previously called a bankruptcy trustee) (LIT or Trustee) rather than the debt settlement company.
Dishonest debt relief firms chatted customers right into expensive car loans under the scare tactic that they would not qualify once they filed either a consumer proposal or for bankruptcy so now was the time to improve their credit score.
The debt negotiation firms had no accreditation or experience to provide the sort of financial advice they were offering.
Creditors obtained much less than they would have received if the insolvent person went first to see the LIT.
Debtors had no idea of their obligations under the insolvency process they ended up filing for. They were not offered the chance to experience one of the most essential facets of the Canadian bankruptcy system, economic recovery.

Public consultation

On November 24, 2017, the OSB sought public consultation on amending the process by which a LIT must perform credit counselling as part of the administration of consumer proposal filings. Changes were implemented and given time to see how they would work in practice.

On June 17, 2019, the OSB announced that it was seeking public consultation on a new Directive for LITs on credit counselling. These changes are meant to streamline the administrative structure for insolvency credit counseling.

All the changes are to better control the Trustees who receive referrals from debt settlement companies that charge the debtors for services that they really do not require before handing them over to a LIT to administer a consumer proposal.

Why not just go see a Trustee first?

It makes the most sense when you realize you are in financial trouble to see a LIT. A Trustee is only professional licensed, recognized and supervised by the federal government to provide insolvency advice and to administer insolvency filings to eliminate debt problems. A restructuring proposal is a government and court approved debt settlement plan to do that. In a first consultation, a Trustee will listen to all the issues and then provide a debtor with all the available alternatives. The aim is to avoid bankruptcy. This first consultation is also free! No charge! Gratis!

So why don’t more people do so? I believe the answer is in a recent Angus Reid poll titled The Awkward Silences Survey 2019. The survey says one-in-five Canadians claimed they least like to talk about:

Embarrassing health and wellness concerns – 20%
Sex – 18%
Finances – 17%
Religious beliefs or politics 17%
Small talk – 15%
Family and relationships – 13%

The unwillingness to talk about humiliating health and wellness problems was more widespread amongst males (23%) than females (17%).

When asked which one money and finance subject people like discussing the very least, personal debt and bankruptcy led by a big margin with one-in-three stating it was off limits to discuss (34%). This number is significantly greater in Quebec (42%) and least in Ontario (28%).

The survey says Canadians said that in the money and finance area, the least favourite topics they like to talk about are:

Personal debt or bankruptcy – 34%
Assets, liabilities and net worth – 22%
Their income – 16%
How they spend their money – 12%
Savings and investments – 11%
Their mortgage – 5%

I don’t do government approved and free

I always knew that going to see a Trustee to talk about financial problems was not high on anyone’s list. This recent survey is the first time that I have seen it studied with anything other than anecdotal stories. This could explain why even though it makes the most sense, people avoid it for as long as they can. It also explains why people will search out companies that try to candy coat the topic and call it something nicer. Unfortunately, as the OSB studies have shown, consumers do so to their own detriment.

People would rather pay good money they can’t afford to be hoodwinked by an unscrupulous debt consultant until they realize they have no choice but to see a Trustee. At that point, most of their various options are no longer available and bankruptcy is more often than not inevitable.

Whether it is a business or a person, corporate or personal, it will help to talk about it to a Trustee. Sticking your head in the sand will not make things better. There are various options to look at depending on how early on you seek help.

Corporate financial problems

For corporate financial problems, the options may include:

Refinancing with a new lender who has not grown weary.

Sometimes relationships, including business relationships, just run their course and fatigue sets in. I was recently consulted by a company whose banker grew tired of their turnaround plan, that was working. By introducing this company and its senior management to a new lender, who saw the long term benefits of lending to a company that was successfully turning itself around, the company was able to refinance and continue their business.

Corporate restructuring.

Sometimes a more formal plan needs to be put into place using one of Canada’s two federal statutes: (i) Companies’ Creditors Arrangement Act (Canada) (CCAA); or (ii) the proposal provisions of the Bankruptcy and Insolvency Act (Canada) (BIA). We have done many.

Receivership or bankruptcy proceedings to take assets from a sick company and get them into a healthy one to save jobs and the business.

Sometimes the corporate body is just too sick and weak and cannot continue. However, taking healthy assets and employees and transferring them to a new or different corporation can revitalize a business and save jobs. The old shareholders may or may not be associated with the new company. However, the highest value will be obtained for creditors, employees and all other stakeholders.

Personal financial problems

For personal financial problems, the options may include:

Credit counseling and budgeting.

Many people need help with items such as:

Budgeting
achieving financial goals
spending habits
responsible use of credit

Many times once this help is received, people can continue on themselves without any further problems.

Debt consolidation.

Debt consolidation is the process that permits you to roll your varied financial debts owing to many creditors into one single loan, leaving you with just one creditor. If you are starting to have troubles staying on top of your minimum month-to-month payments, and the amount of your debt is frustrating you, debt consolidation is a choice worth thinking about.

A consumer proposal and Division I Proposal.

A consumer proposal and a Division 1 proposal are options to filing bankruptcy. Although comparable in several aspects, there are some significant distinctions. Consumer proposals are offered to people whose financial debts aren’t more than $250,000, not including any debts registered against your personal house. Division 1 proposals are readily available to both companies and people whose financial obligations go beyond $250,000 (omitting mortgages registered on their primary home).

A consumer proposal is an official process under the BIA. Dealing with a Trustee you make a proposal to:

Pay your creditors a percentage of what you owe them over a specific amount of time
Extend the time you need to repay the debt
A mix of both

Repayments are made via the Trustee, who makes use of that money to distribute to each of your creditors. The agreed to a lesser amount of debt has to be repaid within 5 years.

Bankruptcy.

Sometimes when there are no other options, but the pain and stress of your debt load are just too much for you to handle, and you can’t see any other way, bankruptcy may be the only answer. The purpose of bankruptcy in Canada is to return the honest but unfortunate debtor back into society, so that they may be a productive member going forward.

Are you ready to talk about finances now and get some real credit counseling?

Don’t be like those people who took part in the Angus Reid survey. Take a positive step in the right direction to help your company and yourself.

Is your business in financial distress because you cannot collect your billings? Do you not have adequate funds to pay your creditors as their bills to you come due?

If so, call the Ira Smith Team today. We have decades and generations of experience assisting people looking for financial restructuring, a debt settlement plan and to AVOID bankruptcy.

A restructuring proposal is a government approved debt settlement plan to do that. We will help you decide on what is best for you between a restructuring proposal vs bankruptcy.

You can have a no-cost analysis so we can help you fix your troubles. Call the Ira Smith Team today. This will allow you to go back to a new healthy and balanced life, Starting Over Starting Now.

Tags Bankruptcy, bankruptcy trustee, Consumer Proposal, corporate financial problems, corporate restructuring, credit counseling, credit counselling, credit counselling canada, debt consolidation, debt relief, debt settlement, financial problems, financial restructuring, Ira Smith Trustee, licensed insolvency trustee, receivership, refinancing

Brandon Blog Post

MY BILLS ARE HIGH: 6 THINGS TO IMMEDIATELY DO

Post author By Brandon Smith
Post date March 25, 2019

If you would prefer to listen to the audio version of this my bills Brandon’s Blog, please scroll to the bottom and click on the podcast

My bills are high: Introduction

It is very common when I sit down with a person who has come to my office for a free consultation to hear them say “my bills are high”. As a licensed insolvency trustee, my role is to first understand the person’s entire situation. It is quite possible that I can recommend a few alternatives to avoid bankruptcy.

The purpose of this Brandon’s Blog is to talk about the importance of budgeting and more things a person with financial problems can do before even considering the “B” word.

First thing – household budget

I will show you how to catch up when you are behind on your financial obligations by using a proper household budget plan process. I must warn you that there is no magic wand to wave to make things right. You will have to learn the budgeting technique and be willing to invest a great deal of effort, time and personal and family sacrifices. But it will be worth it. When you are back on track and living within your means, you will have a new stress-free outlook on life.

To start the monthly budget plan process, it does not matter if you use an electronic spreadsheet, a paper listing of income and expenses or a clean calendar. Whatever you are most comfortable using. The process will be the same.

The starting point is for you to list all your bills with their due dates. Don’t forget to make note of any special expenditures during any specific month, such as a spouse or child’s birthday present. Make sure you list all of your expenses regardless if you pay them by cheque, cash, credit card or online payment.

Next, list your monthly income by the date(s) during the month your wages or salary end up in your bank account. Make sure that you are listing your net take-home pay, net of income tax. That is the actual amount of income that you have to spend in any given month.

The 4 corners

Now that you know exactly how much money is coming in every month available for you to pay your expenses, you have to organize your expenses. You first need to know what I call your four corner expenses. These are the expenses that you will have to pay before anything else. This is true whether you continue working at the same place or you lose your job and are looking for new work. The expenses that I call the four corners are:

Rent or mortgage payment.
Food costs.
Heat and electric bills.
Clothing expenses.

These are your essentials. Nothing else can be considered before them. So fill in your regular monthly amount for each one. Total up the amount of your four corners expenses and deduct it from your take-home pay. The difference is what you have left over each month to spend on other expenses.

Now go down the list of the rest of your expenses. Car payments, gas and vehicle maintenance, insurance, cable, internet, credit card payments and anything else that you have listed. See what all those expenses total. If the total of those is more than you have leftover cash from the four corners exercise above, then you have to make adjustments. You either have to reduce your other expenses or you have to increase your income. Perhaps it may even be a combination of the two.

If you are behind on any of your payments, because your bills are too high right now, you are going to have to work into your budget increasing the amount of the monthly expenses that you are behind on. However, there is an exception. The exception is that you start with your four corners payments you are behind on.

It won’t help you to bring your credit cards current if the gas company is about to shut off your ability to heat your home. Bringing a life insurance payment current won’t help you if you are behind on your rent or mortgage payments. So again, your four corners payments have to be brought current first. Then you can focus on your other expenses.

Do not worry about anything else. You put it on hold due to the fact that at the end of the day, if you were to have lost your job, the four corners is what you require to make it through, not a credit card payment. You don’t need to fret about your credit rating decreasing since if you are starting this trip you are not looking to borrow more money that needs your credit score to be spot-on. That will come over time after you have your financial house in order.

You worry about taking care of your four corners first. That is a good mind trick to getting yourself out of the loop of being addicted to letting your bills go late. imagine if you would have lost your job you would have no other choice but to not pay the credit cards.

Balance the rest of your expenses

Now, normally when you’re behind on payments that mean that you don’t have enough money to cover all your bills and that is totally fine. I need to emphasize that is totally fine. You will be able to catch up eventually. Most people find ways to catch up by either:

Further reducing expenses.
Selling stuff.
Using an annual bonus.
Increasing income with overtime, a part-time job or side hustle.

You need to take care of business. That way you are treading water, not sinking in it!

Now, what about the non-four corners monthly payments that you are deferring. Yes, eventually the credit card company, such as, is going to start hounding you. You will have to explain your temporary problems, tell them what you are doing to correct things, and when you think you will really begin to resume payment. It doesn’t matter who the creditor is. The process of explaining the issues and getting a deferment or grace period is the same. Do not hide from your creditors. Explain the situation and show them that you have a solution for your common problem.

For additional ways to pay down your debt, take a look at my blog DEBT HELP NEAR ME: OUR TORONTO DEBT REPAYMENT CALCULATOR STRATEGY. In it I explain the two most common methods of paying down bills you are behind on; the debt snowball method and the debt avalanche technique.

If you budget properly and stick to your budget, you will get caught up and your credit will recover with time. Now that you actually have control over your expenses and you know to the day of every month what you earn and what you pay, you can then look at some alternatives if you cannot get current before a creditor stops waiting and is beginning to take action against you.

Once you have the budget process mastered and you are following your budget, you won’t have to say “my bills are high”.

Second thing – rebuilding credit

Rebuilding credit is essential. There are many points beyond your control that could have contributed to you’re getting behind on your bills and your resulting bad credit ranking – losing your job, an illness or a divorce. The most vital thing is to recognize what is within your control that got you into difficulty and ensure that you don’t repeat the same mistakes twice.

There are many strategies that you can use to restore your credit score. Here are a few suggestions:

Continue with the budget plan I showed you above and continue to pay down your debt.
Pay your expenses in a timely manner
Contact a creditor instantly if you are having a problem making payments to advise them and work out a payment plan that you can honour.

If you do not qualify for any type of loan, apply for a secured credit card and stop using the normal credit cards that got you into trouble.

Third thing – credit counselling

The first two things I have mentioned are for those who can do it on their own. If you discover yourself experiencing money problems and feel that you need the help of an expert, credit counselling is a great place to start.

A certified credit counsellor professional, can look at your current situation and offer you many alternatives for taking care of the debt.

Credit counselling can solve debt problems. It will also give you the skills to properly budget, pay down your debt and then go on to live debt free. Credit counselling solutions consist of the budgeting process and credit repair that I have already talked about. It also will include lessons on how to use debt wisely. It may also include a proper debt administration program.

Debt administration programs are made to aid you to repay debt. You enlist willingly in a debt administration program; it is not court mandated. When you enlist, a debt counsellor will contact your creditors and ask for their participation in lowering your debt. Your lenders might agree to decrease the amount of debt owing or eliminating or reducing the interest owing. Not all financial debts are covered under a debt monitoring program. Secured debts are generally not included. This is because the creditor can repossess the house or car if you do not make your payments.

One word of caution. We have had cases where certain debt administration firms failed to provide any type of purposeful solution for the people. They charged costs and didn’t give any kind of results. We suggest that you contact what you believe to be a reputable credit counselling firm, you do not retain them until after getting and vetting a couple of references of people who have gone through the program you are considering and you receive positive reviews.

Fourth thing – debt consolidation

Debt consolidation is a loan that allows you to settle all your financial obligations to several or all of your lenders simultaneously, leaving you with just one loan payment. Your debt consolidation loan interest rate must be less than the average interest rate of the debts you are settling.

Not all debts can be included in a debt loan consolidation financing. Secured financial debts like your home mortgage or car loan cannot be included; however unsecured debt like credit card debt and other regular monthly bills that you are now behind on can be.

In order to qualify for a debt loan consolidation, you will require to have an acceptable credit score and sufficient income to show to the lender that you can make your new month-to-month payment in addition to your other regular monthly expenses. Debt consolidation is something you ought to consider before you are in more significant financial troubles. If you have a poor credit score you will certainly not qualify.

There are many benefits to a debt loan consolidation financing that include yet are not limited to:

Interest rates are less than the rates of interest on credit cards
Your unsecured creditors will be paid in full
You will have the benefit of making only one monthly payment
You ought to be able to keep a good credit report rating

Fifth thing – consumer proposal

Your financial problems may have gotten to the point where you just don’t have enough time to get current using one or a combination of the 4 things I have already explained. Worse, you may have gotten breathing room and accommodation from your creditors. However, you were not able to keep current on your new payment plan. If this is the case, do not fret because there is a solution.

By using a licensed insolvency trustee (formerly called a bankruptcy trustee) (Trustee), you can reach a binding deal with your creditors to settle your debts at less than the amount you owe in total. The process for this debt settlement plan is called a consumer proposal.

Consumer proposals are options to avoid bankruptcy. A consumer proposal is available to people whose total financial debts do not go beyond $250,000. This limit is not including financial obligations for mortgage or line of credit loans registered against your principal home.

Consumer proposals have formal rules governed by the Bankruptcy and Insolvency Act (BIA). Dealing with a Trustee you make a proposal to:

Pay your creditors a percentage of what you owe them over a specific time period (not more than 5 years).
Extend the time you need to pay off the debt.
It could be a combination of both.

Payments are made to the Trustee who is the administrator of your consumer proposal. The Trustee then uses that money to pay each of your creditors their part of the payments.

The advantages of a consumer proposal are:

You maintain all of your possessions
Collection actions against you by unsecured creditors, such as garnishments are stopped
Unlike informal debt settlement, the consumer proposal is a legal process where every one of your creditors must heed your restructuring
You do not have to claim bankruptcy

Sixth thing – bankruptcy

If you have left things too late, or other reasons why none of the 5 things I have already described will work for your situation, then the sixth thing is bankruptcy. Personal bankruptcy is meant to allow the honest but unfortunate person shed themselves of their debt. That way you can start over fresh and new.

Our goal as a Trustee is to ensure that you understand the bankruptcy process and how it can be used to get your life back on track.

We will first help you understand the 5 things I have already described that might be available to you to avoid bankruptcy. If bankruptcy is the only solution, we will guide you back on the roadway to financial health and wellness. We design solutions to ease the stress you meet and bring you:

Relief from bothering calls from debt collectors.
Freedom by extricating you from garnishments.
Provide you the ability to live better than just hanging on one paycheque to the next.
Improve your credit scores.
Give you an improved and enhanced wellness and well-being.

My bills are high: Do you have too much debt and need help?

If so, call the Ira Smith Team today. We have years as well as generations of experience aiding individuals and companies needing financial restructuring. As a licensed insolvency trustee, we are the only professionals accredited and followed by the Federal government to provide debt restructuring options.

You can have a no-cost appointment for us to gather the necessary information to advise you on how to fix your debt difficulties. We can end your pain so that you will begin your clean fresh start, Starting Over Starting Now.

Tags Bankruptcy, bankruptcy and insolvency act canada, bankruptcy trustee, BIA, budget, certified credit counsellor, Consumer Proposal, credit counselling, Debt, Debt administration, debt consolidation, debt counsellor, household budget, Ira Smith Trustee, licensed insolvency trustee, my bills, my bills are high, rebuilding credit

Brandon Blog Post

BANKRUPTCY HELP: SIGNS YOU NEED HELP

Post author By Brandon Smith
Post date March 4, 2019

bankruptcy help

If you would rather listen to the audio version of this bankruptcy help Brandon’s Blog, scroll down to the bottom and click on the podcast.

Bankruptcy help: Introduction

When people ask for bankruptcy help, they really don’t want to talk about bankruptcy. What they are really asking for is help in eliminating the pain, suffering and stress they are going through dealing with their unmanageable debt. They want solutions to avoid bankruptcy. In this Brandon’s Blog, I discuss the debt danger signals and provide solutions to avoid bankruptcy.

As a licensed insolvency trustee (formerly known as a bankruptcy trustee), we are the only professionals licensed and monitored by the Federal Government. We provide options and proposed solutions to people and companies with too much debt. Our main goal is to help people and companies AVOID bankruptcy while solving their debt problems.

Bankruptcy help: 10 signs that you need help

Your total debt has increased over the past year. You may be making minimum payments on some debt, paying down other debt, but increasing your debt in total. You have not accomplished anything in reducing your debt in the past year and this means you need help.
Justified purchasing a new vehicle even though your existing one is fine, just not new. Taking on more debt just because of a “want” but not a “need” is irresponsible. You need help.
Bought a new house with a larger mortgage, or mortgages, because you expect your income to rise in the future. Wages and salaries are not increasing in any real way. They are flat. Voluntarily carrying a larger debt load hoping that sometime in the future your income will catch up to your cash needs is not a responsible way of handling your affairs. You need help with your debt.
Have borrowed money to go on a vacation. You should never go into debt to purchase something that is going to vanish in a week or two. The vacation will be gone but the debt will remain. If you can’t afford a vacation, you can’t go on one.
Justify purchases based on what your peers are buying. Again, going into more debt because you want things your friends are buying is not a good reason. Their situation is not your situation. Maybe they can afford those things but you can’t. Maybe they can’t afford those things and will end up in bankruptcy. You just don’t know. Again, you can’t go into debt for “wants”.
You have no emergency fund saved up. Recent surveys have shown that Canadians may be a few hundred dollars away from a financial disaster. Many Canadians are living paycheque to paycheque. You don’t know when a medical emergency, job loss or the need to replace a major appliance will happen. You need an emergency cash fund to cover those emergencies. If you have too much debt and no emergency fund savings, you need debt help.
No retirement savings. It is never too soon to start planning to save a certain part of your take-home pay for retirement. A proper household budget will allow for such savings. If you are constantly battling your debt and have no money for savings, you need debt help.
You quit your job without having another one lined up. This is probably the most irresponsible thing you can do. It may seem obvious to you, but trust me, I have seen it. The best way to land a better paying job or position is when you already have one. Trying it any other way is pure folly, especially when you have too much debt. Your regular monthly debt payments will not wait for you to have your income stream rolling again. Keep in mind that I am not talking about someone who is downsized and was given a package. I am talking about someone who quits without having new employment ready to go to.
You are always borrowing from one source to pay down another. There isn’t enough money from your earnings to make your required debt payments. The fact is that you are borrowing from Peter to pay Paul. You’re in trouble and need debt help.
You ignore your partner’s bad money habits or worse, financial infidelity. Your money habits may be impeccable. However, ignoring your partner’s money problems will bring you down too. You both need debt help.

Bankruptcy help: How we provide debt help

The first thing we offer is a free first consultation. You explain to us the financial issues you are facing. Then we talk to you about your family assets, liabilities and income. We then describe to you some possible options to help you overcome your debt problems. More information will be needed from you, but at least we start by setting your mind a bit at ease by telling you that your situation is not hopeless and we can give you solutions. All of the solutions we offer, except maybe one, are all so you can avoid bankruptcy.

The takeaways we want everyone to get from this free consultation is that you feel:

We have empathy for your situation.
A rapport has been built.
We are the kind of people you can see yourself working with.
You trust us.

If you wish to go ahead with our solving your financial and debt problems, the next step is that we have you complete our standard intake sheet called the Debt Relief Worksheet. A fully completed worksheet, complete with backup documents, allows us to drill down into all the issues and come up with our definitive recommendations.

Bankruptcy help: What are some possible solutions

The range of possible solutions depends on when we get to speak with you. Most people wait until they have no more credit line to use. Sometimes it takes a major event like the Canada Revenue Agency garnisheeing their bank account or wages before they realize they have a debt problem. The earlier you recognize there might be a problem and come speak with us, the more options we will have for you to solve your debt problems.

The range of options might include:

Credit counselling

Credit counselling is in fact debt therapy. We give advice with a host of concerns connected to debt consisting of budgeting, debt remedies, working with your lenders as well as restoring credit scores.

Debt consolidation

Debt consolidation is replacing all of your debts with new single financing at a lower overall interest rate so that you only have one debt to focus on reducing.

Consumer proposal

A consumer proposal is an official deal made to your creditors under the Bankruptcy and Insolvency Act (Canada) to customize your repayments; e.g. paying a lesser amount every month for a longer amount of time and paying in total less than you owe. Another benefit is that the interest clock stops the moment you file your consumer proposal.

If none of the above 3 possible solutions to avoid bankruptcy will work for you, then you are a candidate to file for bankruptcy so that you can end the pain and stress your debts are causing you. This way you can be Starting Over, Starting Now.

Bankruptcy help: Do you have too much debt?

Do you have too much debt? Are you stressed that future interest rate increases will make currently affordable payments completely unaffordable? Is the pain, stress and anxiety hurting your wellness and health?

If so, speak to the Ira Smith Team today. We have decades and generations of helping people and companies looking for financial restructuring. As a licensed insolvency trustee (formerly called a bankruptcy trustee), we are the only experts licensed and supervised by the Federal government to provide insolvency services.

Call the Ira Smith Team today for your free consultation and to make sure that we can begin assisting you to return right into a healthy, balanced, hassle-free life.

Tags avoid bankruptcy, Bankruptcy, Bankruptcy and Insolvency Act, bankruptcy help, bankruptcy trustee, Canada, Canada Revenue Agency, Consumer Proposal, credit counselling, Debt, debt consolidation, debt help, insolvency services, Ira Smith, licensed insolvency trustee

Brandon Blog Post

DEBT CONSOLIDATION: DEBT CONSOLIDATION LOAN MAY START PLAYING HARD TO GET

Post author By Brandon Smith
Post date November 21, 2018

Debt consolidation

Debt consolidation is a form of debt refinancing that entails taking out one loan to pay off many others. This commonly refers to a personal finance process

Introduction

On November 16, 2018, the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) issued a press release on the state of consumer insolvencies in Canada. Hidden in the information was data which leads me to believe that debt consolidation may be tougher in 2019 and certainly in 2020.

A perfect storm is brewing

A historically low rate of interest and accessibility to credit have enabled some Canadians to stay up to date with debt and debt payments that would otherwise have gone into default. Interest rates are now rising and it is expected that the Bank of Canada will continue to raise its benchmark rate into 2019. Canadian household debt is on average at its highest level ever and is forecast to continue to rise. Rising household debt combined with rising interest rates is not a good combination.

Until now, Canadian real estate values have continued to rise, so consumers have been able to combine unsecured credit card and other debt into new mortgage or home equity line of credit debt secured by Canadian real estate. However, times have changed. Effective January 1, 2018, a new mortgage stress test came into effect. We described it in our blog “CANADA MORTGAGE STRESS TEST: WE EXPOSE THE SECRET TO TURN YOU FROM ZERO TO HERO”.

The mortgage stress test has resulted in one of its prime goals; a noticeable downturn in new mortgage loans. The second result is a slowing down of the runaway real estate markets in Vancouver and Toronto. If Canadian household debt continues to rise, interest rates keep rising making debt payments tougher and Canadians can no longer combine their unsecured debts by taking out a new loan by borrowing against their homes, debt defaults are going to rise.

That is why I say that debt consolidation loans may start playing hard to get.

The important relationships to consider

Below is a chart displayed in the CAIRP press release which I have reproduced here. debt consolidation 3

CAIRP came to some interesting conclusions about interest rates and consumer insolvencies, based on the trends shown in these charts. However, I believe they overlooked what I think is the central issue.

In the top chart, it shows that insolvency filings increased in the 2009-2010 years. CAIRP surmised that there was a lag between the time interest rates rose in the years 2006 through 2008 and the increased filings. This is true. However, the increase in filings mirrors the increase in unemployment in the 2009-2010 period. My personal view is that the more important finding is that the unemployment rate lagged the interest rate increase and it is the increase in the unemployment rate that produced a higher level of insolvencies.

With higher interest rates, corporations are paying more on their debt. Corporations want to show a steady increase in their profits year over year. If debt costs rise, companies have to find other costs to save. One cost that can be reduced in the short-term is labour costs. The forecast shows that as employees are terminated, the unemployment rate rises. Not everyone can find new work in the same time frame. This leads to increased consumer insolvency filings. In my view, the unemployment rate is a more important relationship to consumer insolvency filings.

Looking at 2019 and 2020

The bottom chart shows the relationship between household debt to income and the inflation rate. As you can see, the household debt to income ratio has kept a steady climb in 1996 through 2017 years. This steady climb has continued in 2018 and is forecast to rise even more in 2019 and 2020. The forecast also shows that inflation will nudge up to the 3% rate in 2020. So prices are expected to rise with inflation, and the household debt to income ratio is expected to rise also. This will put more pressure on Canadians trying to keep up with their debt payments.

The upper chart shows us that in 2019-2020, the forecast is that GDP stays flat, while interest rates continue to rise. In the same time frame, the downward trend in the unemployment rate bottoms out and begins to rise. Again, more unemployment and higher interest rates lead to problems for people trying to pay off debts. If you agree with my hypothesis that Canadians won’t be able to merge debt by borrowing more against their homes, this will lead to more financial problems and presumably an increase in consumer insolvency filings.

What you can do now

All is not doom and gloom. There are many things a person with a lot of debt can do now before things get out of control. There are many things that you can do right now to avoid a disaster down the road. My 5 steps for anyone who wants to resolve debt issues now are:

Review your household budget now and cut spending on “wants” vs. “needs”. If you don’t have a household budget, develop a realistic one NOW!
Rework the budget so that you spend less each month than you are currently spending. Look for ways to economize. Use that extra cash to paying down debt.
Start paying more than the minimum monthly payment on your credit card and other unsecured debt. The more you can pay, the faster you can pay it off.
Pay down the debt with the highest interest rate first. The less you pay in interest the better. That means more is going to pay down the principal debt.
Perhaps you need to consider taking on a part-time extra gig to bring in more income.

What if I can’t pay off my debts?

For Canadians that discover themselves not able to handle their debt on their own, there is a range of alternatives to take into consideration:

striking a deal with each of your major unsecured creditors through an informal debt settlement negotiation;
don’t give up on trying to combine all unsecured financial debts into one regular monthly payment;
a more formal debt settlement strategy with a consumer proposal; or
bankruptcy.

Identifying which choice is most appropriate depends upon a person’s scenarios as well as their unique asset and liability structure.

Debt consolidation: How we can help you

Licensed Insolvency Trustees (formerly called bankruptcy trustees) are the only experts accredited, licensed and supervised by the federal government to handle debt restructuring. As a licensed insolvency trustee, our personalized strategy will assist you to recognize all of your alternatives. The alternative you pick based on our recommendations will take away the stress and pain you are feeling because of your debt problems.

The Ira Smith Team has decades and generations of experience people and companies in financial trouble. Whether it is a consumer proposal debt settlement plan, a larger personal or corporate restructuring proposal debt settlement plan, or as a last resort, bankruptcy, we have the experience.

Our approach for each file is to create an end result where Starting Over, Starting Now takes place. This starts the minute you are at our front door. You’re simply one phone call away from taking the necessary steps to get back to leading a healthy, balanced hassle-free life. Call us today for your free consultation.

debt consolidation

Tags bank of canada, Bankruptcy, bankruptcy trustee, CAIRP, Canadian Association of Insolvency and Restructuring Professionals, consumer insolvency, Consumer Proposal, Credit, Debt, debt consolidation, debt consolidation loan, higher interest rates, insolvency, interest rates, Ira Smith Trustee, licensed insolvency trustee, unemployment rate

Brandon Blog Post

MORTGAGES FOR SENIORS CANADA: APPARENTLY NOT A PROBLEM

Post author By Brandon Smith
Post date September 24, 2018

mortgages for seniors canada

Mortgages for seniors Canada: Introduction

TransUnion Canada’s most recent TRANSUNION Q2 2018 INDUSTRY INSIGHTS REPORT found that borrowing for mortgages was reduced in Canada in 2018. A troubling statistic exists for mortgages for seniors Canada. In this Brandon’s Blog, I discuss this and certain other issues arising from the TransUnion Canada report.

Secured home loans for older folks Canada: Home mortgage borrowing decreases throughout Canada

Home mortgage lending has reduced throughout Canada in the first half of 2018. Generally, there was a 3.4% decline in the variety of brand-new home loans in Q1 2018 as compared to Q1 2017; this comes after an 8.8% year-over-year decrease in Q4 2017. This pattern seems to prove that the brand-new home loan guidelines might be affecting customers that are either not qualifying or are not able to obtain the level of home mortgage they want. It is unclear if this decrease in home mortgage demand means that there are fewer people looking for a home mortgage, or if there are more people sitting on the sidelines trying to figure out a way to qualify.

HELOCs for retirees Canada: Seniors bucking the trend

The exception to the decrease in home mortgage originations in Canada in 2018 is older generation Canadians. Canadians in the 73-93-year-old age group saw a substantial year-over-year boost (63%) in the number of home mortgages taken out. Baby Boomers in Canada, those in the 54-72-year-old age group saw an 18% increase. These statistics beg the question, why are Baby Boomers, and those in the Boomers’ parents’ age range, refinancing their mortgages or taking out new mortgages? Although not disclosed in the TransUnion Canada report, presumably a lot of the retirees are taking out reverse mortgages, as they too can’t qualify for a traditional mortgage on their retirement income.

Mortgages for seniors Canada: Seniors use of funds

The TransUnion report does not delve into the uses seniors are putting the new mortgage funds to. However, if I was to speculate, I would think that the funds were being used for:

Baby Boomers –

Seniors debt consolidation
Helping children pay for education.
Giving or loaning their children sufficient funds for the house down payment so they could now qualify for a traditional home mortgage under the new stress test rules.

The 73-93-year-old age group –

Helping children with paying off debts – Baby Boomer’s debt consolidation loans.
.Their own debt consolidation.
Gifts or loans to grandchildren – sufficient funds for the house down payment so they could now qualify for a traditional home mortgage under the new stress test rules.

Real estate loans for baby boomers Canada: Why I believe parents and grandparents are helping children buy their home

The TransUnion Canada report says that the greatest decreases in home mortgage applications were amongst the more youthful generations. There was a year-over-year decrease of greater than 22% amongst Gen Z as well as 19% amongst Millennials.

No doubt some of the decreases is a result of the younger generations’ changing lifestyle habits where homeownership may not be as important as it was to the generations before them. However, I would expect that Millennials as a group would by this point want home ownership, where Gen Z may not see it right now as being important.

Main mortgage changes by location

The biggest downturn in mortgage originations remained in Toronto, with a decrease of 17.6% in Q1 2018 from the previous year. Vancouver stayed reasonably level with an increase of only 0.8% over the previous year. The biggest increase in the home mortgage business was in Ottawa, with a boost of 8.4% over the previous year. Montreal had a 5.2% boost over the previous year.

Mortgages for seniors Canada: Risk distribution

Mortgage originations in the super prime risk tier increased 4.4% year over year in Q1 2018. All other risk tiers combined registered an 8% decrease in originations. TransUnion Canada reported that the decrease has been most significant in the below-prime risk buckets.

It is interesting that the higher risk subprime market mortgages have increased. No doubt private lenders, including the shadow lenders, dominate this market as the borrowers could not qualify for a home mortgage loan from a traditional bank or mortgage lender.

The decrease of new mortgages in the lower risk categories tells me that the new stress test qualifying rules combined with successive increases in mortgage rates have contributed negatively to those who perhaps as recently as last year could have qualified for a traditional mortgage. However, now they can’t be based on affordability.

Do you, your children or your grandchildren have too much debt?

Are your children or grandchildren coming to you for financial help for debt consolidation? Is going into debt the best option for you? Can you afford to carry your new debt in retirement? Is giving away your home equity through a reverse mortgage the right move? Will you need the money you are about to give away for your healthcare?

If debt consolidation is the reason why your children or grandchildren need your financial help, look at other options first. They need the help of a professional trustee. Call the Ira Smith Team. We will listen to your issues and provide you with our thoughts and recommendations for free. That’s right; a free initial consultation. So why not?

We will advise them whether or not we think they are a candidate for either a debt consolidation consumer proposal or bankruptcy. If we feel they can solve their financial problems without an insolvency process, we will tell them straight. Make sure that the money you give for debt consolidation will fix all of their problems. It is possible that with our help, you’ll need to provide just a fraction of what they are asking for.

The Ira Smith Team understands the stress they and you are under and the pain it is causing you and your loved ones. We can eliminate their pain. I guarantee that they and you will start feeling better right away after our free initial consultation. Taking action after that will put you on the right path, Starting Over Starting Now.18

Tags baby boomers debt, baby boomers in canada, debt consolidation, debt consolidation loans, home mortgage applications, Ira Smith Trustee, Millennials, mortgage lender, mortgages for seniors, mortgages for seniors canada, professional trustee, refinancing, seniors debt consolidation, shadow lenders, toronto, TransUnion, transunion canada, TRANSUNION Q2 2018 INDUSTRY INSIGHTS REPORT

Brandon Blog Post

DEBT RELIEF CANADA: CAN YOU DIPLOMATICALLY AVOID BANKRUPTCY?

Post author By Brandon Smith
Post date June 27, 2018

Debt relief Canada: Introduction

This is always a hot topic. I am asked often how does debt relief Canada work? I recently wrote blogs about professional athletes who made a lot of money in their careers and who are now broke, or worse, bankrupt.

I am going to tell you about former tennis star Boris Becker. He is trying to avoid bankruptcy, diplomatically.

First some background information. The inviolability of diplomats is among the oldest rules of international law. During the Greek Empire, it was unlawful to abuse, apprehend or detain a country’s agent. In contemporary times, there is polite resistance from court territory as a matter of global regulation. The purpose of this is to make certain the reliable efficiency of diplomatic features preventing the holding authority from intervening with the diplomat’s job.

Debt relief Canada: Diplomatic immunity

Diplomatic immunity separates into 3 categories. The resistance of the consular office properties and residential properties. The buildings, cars, archives and diplomatic communications. While the holding authority has a task to shield the diplomatic properties from any type of damages, the embassy remains immune from any kind of law enforcement actions. The authorities cannot enter the consular office other than to safeguard human life for instance of a severe emergency.

The 2nd kind is within the premises. The resistance of the employees functioning in the consular office from the local court’s jurisdiction. Mediators are immune from any kind of type of law enforcement like arrest, search as well as apprehension.

The 3rd kind is that the diplomat, as well as his/her family members, are additionally immune in the hosting country from paying taxes other than the settlement for solutions like electricity or water.

Article 29 of the Vienna Convention on Diplomatic Relations states that diplomatic immunity could only be forgoed by the sending out government.

Debt relief Canada: The Boris Becker story

It likely raised a few eyebrows when Boris Becker revealed he was pursuing a 2nd profession in diplomacy In April 2018 as the Central African Republic’s attaché for Sports/Humanitarian/Cultural Affairs in the European Union.

The statement came while Becker had a claim made against him over a loan he presumably owes to exclusive financial institution Arbuthnot Latham, after the sports celebrity’s bankruptcy in 2017. His lawyers claim that his diplomatic function grants him immunity under the 1961 Vienna Convention on Diplomatic Relations. They state this indicates he cannot be subject to any kind of lawful procedure in the courts of any nation. Additionally, they say this protection is for as long as he stays an identified diplomatic representative.

The Boris Becker method of debt relief

His legal representatives have also provided those claims to Britain’s High Court, saying that British Foreign Secretary Boris Johnson in addition to the Central African Republic would need to decide whether any kind of suits could continue. This takes the bankruptcy of a previous tennis star transforming it into a politically delicate matter. The Court process against Becker might lead various other countries can potentially make use of the situation. In the same fashion British diplomats abroad could lose immunity if certain countries wished to make a point.

Becker’s defence method has actually likewise set off inquiries over his motivations as well as timing in accepting a polite duty with the Central African Republic— a nation in the midst of a bloody civil conflict and humanitarian situation. It appears now the Republic has more important matters to focus on. Its social and sporting activities ties to Europe cannot be a current priority.

The former tennis champ condemned the choice to start bankruptcy procedures versus him as unjustified and unjust and introduced he would look for payment for the totally unneeded affirmation of bankruptcy that he was pushed into.

Debt relief Canada: The precedent story of Sheikh Walid Juffali

The Article 29 of the Vienna Convention on Diplomatic Relations I previously referred to, has actually long been controversial. In 2014, the little Caribbean island of Saint Lucia named Saudi business owner Sheikh Walid Juffali its irreversible representative. Moreover, this appointment occurred after his former spouse Christina Estrada separated from him and instituted divorce proceedings.

Britain’s High Court ruled that his diplomatic status was totally fabricated. Britain’s Foreign Office slammed the judgment when stating it can result in problems with British diplomats’ immunity abroad. The Court said that Sheikh Walid Juffali, a permanent resident of Britain, is not protected by his diplomatic status. Estrada’s award was about $100 million.

Applying the very same reasoning in Becker’s instance would negate any diplomatic immunity claim by the long-time British homeowner.

What if you can’t claim diplomatic immunity?

Boris Becker’s uses a very novel and entertaining defence to avoid lawsuits to recover debts. However, most of us don’t have the ability to get diplomatic status from a country and then claim immunity. We deal with creditors suing us on our debts. We have to take a less dramatic and more common sense approach. Here is my list of options for those looking for debt help in Canada.

Debt relief Canada: Credit counselling

This addresses debt troubles without bankruptcy and supplies you with the skills to live debt totally free. Credit counselling solutions consist of budgeting, just how to use debt intelligently, restoring credit as well as debt management programs.

Debt management programs are developed to aid you to settle your debt. You enlist willingly in a debt monitoring program; the court did not mandate it. When you enlist a credit counsellor will call your financial institutions and ask for their collaboration in minimizing your debt. Your creditors could agree in ways like minimizing the amount of debt owing. A debt management program cannot cover all debts. It cannot cover secured debts. A mortgage, line of credit registered against your home or an auto loan are examples of debts not covered.

Debt relief Canada: Debt consolidation

Debt consolidation is getting a loan that enables you to settle your financial debts to a number of or all your unsecured creditors, leaving you with simply one loan. Usually, this approach is ideal to deal with your unsecured debts. The theory is that the debt consolidation loan will have a lower annual interest rate than many of your unsecured debts.

Debt relief Canada: Proposals

Consumer proposals and Division 1 proposals are alternatives to bankruptcy. Although similar in many areas, there are some major distinctions. Consumer proposals are readily available to people whose overall financial debts do not go beyond $250,000, not consisting of debts secured by your house. Division 1 proposals are for both companies as well as people whose financial obligations go beyond $250,000 (excluding the mortgage on their primary residence).

Proposals are governed by the Bankruptcy and Insolvency Act (BIA). Collaborating with a licensed insolvency trustee you make a proposal to:

✥ Pay your creditors a percentage of what you owe them over a certain
amount of time, without any interest

✥ Extend the time you need to repay the debt

✥ Or a mix of both

Proposal payments are made to your trustee. The trustee uses that money to pay each of your creditors. You can take up to 5 years to complete a proposal.

The last resort: Bankruptcy

As a last resort, you can declare bankruptcy. The Government of Canada licences and supervises us. We can look at your circumstance and discuss with you the options available to you to avoid bankruptcy. We can also advise you what is involved in the bankruptcy option and administer it for you.

Do you have too much debt?

I can’t provide you diplomatic immunity from your debts. However, If you’re thinking about a consumer proposal or are looking for ways to end your financial debt, or you need CRA debt forgiveness, call Ira Smith Trustee & Receiver Inc. We understand the stress and pain your financial problems are causing you. We feel your pain and we can end it for you.

Our strategy for every single person is to develop a result where Starting Over, Starting Now comes true, starting the minute you walk through our door. You’re just one call away from taking the necessary actions to get back on the road to leading a healthy and stress-free life.

debt relief canada

Tags bankrupt, Bankruptcy, Bankruptcy and Insolvency Act, BIA, boris becker, Consumer Proposal, cra debt forgiveness, credit counselling, Debt, debt consolidation, debt relief, debt relief canada, How Does Debt Relief Canada Work, Ira Smith Trustee, proposal, proposals, trustee

Introduction

Are you insolvent?

What are my options?

How does bankruptcy in Canada work?

What does declaring bankruptcy mean in Canada?

Personal bankruptcy Canada

Introduction

What is debt consolidation?

Getting that new loan

How does debt consolidation affect my credit score?

The side benefits

It is not the same as debt settlement

Filing for bankruptcy

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

Canadian debt relief: What is debt relief Canada?

Canadian debt relief: The Scotiabank findings

How debt relief works in Canada

Canadian debt relief: Do credit card companies ever forgive debts?

Canadian debt relief: Informal options

Debt consolidation

Credit counselling

Debt settlement

Canadian debt relief: What about “Government Approved” debt programs?

Canadian debt relief summary

Introduction

What is the smartest way to consolidate debt?

Is it a good idea to get a debt consolidation loan?

Should I get a loan to pay off my credit cards?

What happens when you consolidate your debt?

How does debt consolidation affect your credit score?

Does a debt consolidation loan look bad?

The disadvantages of debt consolidation in Canada

Home equity line of credit

A credit card balance transfer at a promotional interest rate

An unsecured loan

Do consolidation loans work?

What can you do now that a debt consolidation is no longer an option?

Credit counselling and budgeting

A consumer proposal or Division I Proposal

Summary

Introduction

The concerns

Public consultation

Why not just go see a Trustee first?

I don’t do government approved and free

Corporate financial problems

Personal financial problems

Are you ready to talk about finances now and get some real credit counseling?

If you would prefer to listen to the audio version of this my bills Brandon’s Blog, please scroll to the bottom and click on the podcast

My bills are high: Introduction

First thing – household budget

The 4 corners

Balance the rest of your expenses

Second thing – rebuilding credit

Third thing – credit counselling

Fourth thing – debt consolidation

Fifth thing – consumer proposal

Sixth thing – bankruptcy

My bills are high: Do you have too much debt and need help?

If you would rather listen to the audio version of this bankruptcy help Brandon’s Blog, scroll down to the bottom and click on the podcast.

Bankruptcy help: Introduction

Bankruptcy help: 10 signs that you need help

Bankruptcy help: How we provide debt help

Bankruptcy help: What are some possible solutions

Bankruptcy help: Do you have too much debt?

Introduction

A perfect storm is brewing

The important relationships to consider

Looking at 2019 and 2020

What you can do now

What if I can’t pay off my debts?

Debt consolidation: How we can help you

Mortgages for seniors Canada: Introduction

Secured home loans for older folks Canada: Home mortgage borrowing decreases throughout Canada

HELOCs for retirees Canada: Seniors bucking the trend

Mortgages for seniors Canada: Seniors use of funds

Real estate loans for baby boomers Canada: Why I believe parents and grandparents are helping children buy their home

Main mortgage changes by location

Mortgages for seniors Canada: Risk distribution

Do you, your children or your grandchildren have too much debt?

***Credit counselling* *and budgeting***