Tag: debt settlement companies

CANADIAN REAL ESTATE BUBBLE BURST: WHEN?

Post author By Brandon Smith
Post date June 12, 2014

Will the Canadian real estate bubble burst has been the subject of several articles in the newspapers recently quoting Canadian and American economists. So far from what I have read, half of the economists quoted say there is not a Canadian real estate bubble, with statistics to show that there is a healthy real estate market and therefore we will not have a Canadian real estate bubble burst.

The other half of the economists, provide statistics to show that there is a Canadian real estate bubble, it has reached the same unsustainable levels as was the case in 2008 in the United States and that there will be a Canadian real estate bubble burst to drag all of us down.

Although my Firm has done many real estate receiverships, the most famous so far being the Court-appointed receivership of the highly publicized The Suites at 1 King West, built by Harry Stinson, my crystal ball is no better than yours. I cannot tell you if:

a Canadian real estate bubble burst will not happen since we are in a safe real estate market where Canada is attractive to immigrants from around the world looking for a safe haven for their money, and they truly believe Canadian real estate is it; or
real estate prices are unreasonably high and that there will be a Canadian real estate bubble burst.

As far as the economist’s statistics, which are being used to prove both sides of the argument, all I can do is quote British Prime Minister Benjamin Disraeli when he said there are “Lies, damned lies, and statistics“, to describe the persuasive power of numbers, particularly the use of statistics, to bolster weak arguments.

In our recent blog, FINANCIAL CRISIS IN CANADA: CAN REAL ESTATE PRICES TRIGGER ONE?, we reported that:

7.5% of the Canadian workforce is in the construction industry, while 7% of the Canadian economy is based on residential construction – both record highs;
the Canadian unemployment rate rose from 6.9% to 7.2%;
the Canadian debt-to-income ratio has soared to a record 164%, above levels experienced in the U.S. before the financial crisis; and
the Canadian Bankers Association reports that 70% of all household debt in Canada is made up of residential mortgage debt.

But there is one certainty I can tell you about. Even if there is a slowdown in the Canadian real estate industry, and not a Canadian real estate bubble burst, residential construction workers and real estate agents will suffer. A slowdown in residential construction, and less residences being sold, does not bode well for these two groups. So it will be the severity of the slowdown, and the effect on real estate prices, to know whether or not there actually is to be a Canadian real estate bubble burst.

So, what can they do to stop a Canadian real estate bubble burst? The answer is nothing. However, they should always have arranged their affairs so when there is a slowdown, they were always:

living within their means by spending less than they earn so that they would not have problems living paycheque to paycheque;
using proper budgeting techniques to make sure they were paying down a portion of their debt with every pay;
paying themselves first by maintaining a program to make sure that they were putting away a portion of every pay into savings for investment so that they would be able to weather any downward blips in their income;
making sure their income tax was paid up on time so that they would not have any large amounts outstanding from past years in a time when their incomes were reduced;
only charging to credit cards what they would be able to pay off in full every month so as not to incur credit card debt with high interest costs; and
reviewing their credit report to make sure their credit rating was accurate, and if they were experiencing any credit problems availing themselves of a proper credit counselling agency, NOT one of the debt settlement companies.

So as you can see, there is no magic pill that you can take to solve your financial problems if there is a Canadian real estate bubble burst, an illness, an emergency, or when life just throws a curve ball at you. The best time to have guarded against financial challenges, if you truly were worried about a Canadian real estate bubble burst, was before it happened.

If you’re financial well-being, and that of your entire family depends on the value of your real estate always rising, and you will be doomed if there is a Canadian real estate bubble burst, whether you wish to admit it or not, you have serious financial problems. Before disaster strikes as a result of a Canadian real estate bubble burst or otherwise, contact Ira Smith Trustee & Receiver Inc.

We can review your situation with you, in a no charge initial consultation meeting, and provide you with real options. If we meet early enough, we can discuss various bankruptcy alternatives such as credit counselling, debt consolidation or consumer proposals, all in order to avoid personal bankruptcy. We will go over all of your options, and encourage and help you to implement the one that is right for you.

Together we can solve your problems with immediate action and the right plan so that Starting Over, Starting Now will become your reality.

Brandon Blog Post

NEGOTIATING DEBT VS BANKRUPTCY

Post author By Brandon Smith
Post date April 8, 2014

Negotiating debt vs bankruptcy. Of course you would not pick bankruptcy as your first choice. If you are considering the options of negotiating debt vs bankruptcy, you must be mired in serious financial difficulty and have few options available to you.

You need the help of a professional, licensed trustee now! Don’t be seduced by the bogus claims of debt settlement companies who promise to negotiate with your creditors for pennies on the dollar and get you out of debt in no time flat. Although you are being bombarded with messages like this on radio, television and online, don’t fall prey to these scam artists.

Debt settlement companies have already been banned in the United States and now several Canadian provinces have introduced strict regulations in the debt settlement industry. A professional trustee will evaluate your individual situation fairly and in an even-handed manner, and present you with a solid financial plan for moving forward and getting out of debt, including all of the advantages and disadvantages of negotiating debt vs bankruptcy.

According to the Office of the Superintendent of Bankruptcy Canada, consumers continue to opt in large numbers for negotiating debt vs bankruptcy.

Negotiating debt – Consumer proposals rose by 4.8% in from January 31, 2012 to January 31, 2013.
Bankruptcy – Consumer bankruptcies decreased by 4.1% in the same 12 month period.

What are the alternatives to bankruptcy? There are 3 Formal Bankruptcy Alternatives:

Credit Counselling
Credit counselling is in reality debt counselling. Professionals provide assistance with a host of issues related to debt including budgeting, finding debt solutions, working with your creditors and rebuilding credit.
Debt Consolidation
Debt consolidation is a single loan that allows you to repay your debts to several or all of your creditors at once, leaving you with only one outstanding loan.
Consumer Proposals
Consumer proposals are formal offers made to your creditors under the Bankruptcy and Insolvency Act (BIA) to modify your payments. e.g. paying a lesser amount each month for a longer period of time and paying a total lesser amount than you owe. In a consumer proposal you are choosing not to go bankrupt so this is actually negotiating debt vs bankruptcy.

Ira Smith Trustee & Receiver Inc. is a professional, licensed trustee who can help you get back on the road to financial health Starting Over, Starting Now. A licensed trustee can properly advise you on negotiating debt vs bankruptcy. If you wish to do some self-study, please review our bankruptcy FAQS. But don’t delay. Contact us today.

Brandon Blog Post

DEBT SETTLEMENT COMPANIES FINALLY TAKEN TO TASK IN ONTARIO

Post author By Brandon Smith
Post date December 17, 2013

Debt settlement companies have been preying on consumers for far too long. We’ve warned you about them in two previous blogs – Beware of Debt Settlement Companies and The Latest on Debt Settlement Companies. In 2010, after a decade of massive growth in the U.S. debt settlement industry, the FTC brought in new regulations that effectively banned debt settlement companies and forced many of them to migrate north of the border. Currently there are 18 companies and 34 credit counselling providers offering debt settlement services in Ontario. With ever mounting numbers of complaints about unsuspecting consumers being taken advantage of by unscrupulous debt settlement companies, the Ontario government has finally taken action and passed Bill 55.

What will Bill 55 do? It creates new standards of conduct for debt settlement companies:

Banning them from charging upfront fees
Limiting the amount of fees consumers are charged and prohibiting the payment of fees before services are provided
Requiring clear, transparent, and detailed contracts that include information about the effect of the contract on the consumer’s credit rating
Requiring credit counsellors to disclose information to the consumer about how their organization is funded
Establishing a 10-day cooling-off period, providing consumers more time to consider their agreements with companies
Allowing the licences of non-compliant companies to be revoked

Bill 55 is certainly a great step toward protecting consumers from debt settlement companies. Hopefully it will be restrictive enough that they will disappear from the landscape as they did in the U.S.

Please stay away from debt settlement companies! If you are having serious debt problems, contact Ira Smith Trustee & Receiver Inc. We are professionals, federally regulated, licensed and subject to a strict code of ethics. Our fees are regulated by the Federal Government and are usually much less than the debt settlement companies who make unsubstantiated claims. We can help. Starting Over, Starting Now you can live a debt free life.

Tags Bill 55, credit counsellors, debt settlement, debt settlement companies, debt settlement industry, debt settlement services, trustee

Brandon Blog Post

THE LATEST ON DEBT SETTLEMENT COMPANIES

Post author By Brandon Smith
Post date August 7, 2013

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

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

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

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

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

Tags Bankruptcy, bankruptcy alternative, Consumer Proposal, credit counselling, debt consolidation, debt negotiation, debt reduction, debt relief, debt settlement, debt settlement companies, toronto, Vaughan

Brandon Blog Post

Beware Of Debt Settlement Companies – Read this blog to find out why

Post author By Brandon Smith
Post date February 5, 2013

You may have noticed that every time you turn on the radio or television there is another advertisement for a debt settlement company making outlandish claims about how they can solve your debt problems with a quick fix for pennies on the dollar. There is a very good reason that Canadians are now being inundated with these ads – the U.S. Federal Trade Commission effectively shut down debt settlement companies across the United States. Now the only place for debt settlement companies to troll for victims is in Canada.

“There is evidence of harmful practices used by some debt settlement companies and that is why our government is taking steps to protect consumers. We want to put a stop to abusive practices in the marketplace. Consumers should know their rights before they sign contracts and they should make no payments until they get results.” Margarett Best, Minister of Consumer Services.

There are over 20 debt settlement companies operating in Ontario and the Ontario Association of Credit Counselling Services receives over 100 complaints about debt settlement companies a month. Finally the Ontario government is responding to this very serious issue and is taking steps to regulate debt settlement companies. Alberta, Manitoba and Nova Scotia have already introduced regulations to crack down on them.

When something appears too good be true it usually is; and in the case of debt settlement companies their promises are always too good to be true. There is no instant or quick fix for serious debt issues. “Essentially, debt settlement companies have charged huge fees, sometimes in the thousands, made broken promises to settle debts for consumers and not followed through on their claims to be able to work with creditors,” wrote Laurie Campbell, CEO of the not-for-profit charity, Credit Canada Debt Solutions (CCDS) in a recent blog.

Beware of debt settlement companies that say:

Their program is government approved. Not true; the government doesn’t approve debt settlement programs.
They can stop collection calls and negotiate debt settlements. Not true; there is no legal protection for you if you choose to deal with a debt settlement company.
They will negotiate with your creditors for pennies on the dollar. Not true; there is no guarantee that your creditors will negotiate with the debt settlement company, especially for pennies on the dollar. You may very well end up in a much worse position than where you started off from.

What can you do when you have debt issues to contend with? Deal with professionals. Contact Ira Smith Trustee & Receiver Inc. for sound, professional advice. We are federally regulated and licensed and subject to a strict code of ethics. Our fees are regulated by the Federal Government and are usually much less than the debt settlement companies who make unsubstantiated claims.

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Tags Bankruptcy, Consumer Proposal, Credit, Debt, debt settlement companies