Tag: Debt

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HOW BINGE BORROWING RAISES CANADA’S HOUSEHOLD DEBT BURDEN

orrowing binges, household debt, binge borrowing, household debt burden, debt, disposable income, consumer debt, credit-market debt, consumer credit, mortgage debt, personal lines of credit, car loans, Canada's household debt burden, household debt burden, Canadian household debt , ira smith trusteeBinge borrowing raises Canada’s household debt burden

We worry about binge eating and binge drinking, but it appears that we are not paying enough attention to Canada’s latest problem – binge borrowing. Incredibly low interest rates and sky high house prices have contributed to this trend. The Bank of Canada, the federal government and many economists have long been concerned that consumers who have been binge borrowing are now exposed to risk in the event of an economic shock or significant downturn.

Just when we thought Canada’s household debt burden couldn’t go higher!

Just when we thought that Canada’s household debt burden was at its peak, in the third quarter of 2015 Canada’s household debt burden hit another record high. This means that Canadian’s debts grew faster than their incomes. According to Statistics Canada:
• The ratio of household credit-market debt to disposable income rose to 163.7% in the three months ended September 30, up from 162.7% in the second quarter (this means the average household had nearly $1.64 in debt for every dollar of disposable income)
• This was the highest ever reading in this key ratio for gauging consumer debt loads
• Debt rose 1.4% in the quarter, while disposable income increased by 0.8%
• Total credit-market debt reached $1.89-trillion in the third quarter, also a record
• Mortgage debt was $1.23-trillion
• Consumer credit – credit cards, car loans, personal lines of credit and other personal loans – totalled $572-billion

What will your debt do in 2016?

Unfortunately Canadians ended 2015 with more debt than they started off with and this is a trend that expected to continue into 2016. Are you ready to stop binge borrowing and get control of your finances before you are facing a financial crisis? Professional help is just a phone call away. Contact Ira Smith Trustee & Receiver Inc. As a firm of professional trustees we’re experts on dealing with debt. Our approach for every file is to create an outcome where Starting Over, Starting Now becomes a reality, beginning the moment you walk in the door. Call us today and take the first step towards living a debt free life.

 

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#VIDEO: DOES SURPLUS INCOME IN BANKRUPTCY SOMETIMES MAKE YOU FEEL STUPID?#

If you don’t know what surplus income in bankruptcy is don’t feel that you aren’t as smart as the next person because most people don’t know what it means or how it is even possible. We hope this short video will explain things easier for you.

We have previously written about surplus income in bankruptcy in our blogs:

On the list of items that generally seems to be difficult for many individuals to understand is how there can be surplus income in bankruptcy. The reason for the confusion is because it has nothing to do with the normal usage of the word “surplus”, being “more than what is needed or used; excess”.

What is surplus income in bankruptcy?

Within a personal bankruptcy, the context is a measure of what a bankrupt has to pay to the Trustee month-to-month. It is one of the aims of the Canadian bankruptcy system to balance the discharge of one’s personal debt with the expectation of the creditors that they should be paid.

To allow Canadians to keep a basic standard of living during the personal bankruptcy procedure, the government features collection thresholds on income (after income tax as well as certain deductions) meant to enable the bankrupt to keep a basic standard of living while contributing an amount to the Trustee for the benefit of his or her creditors.

Exactly how is the surplus income in bankruptcy payment determined?

The surplus income payment is determined according to a prescribed surplus income calculation mandated by the federal government, without any distinction for the area somebody lives in. To learn exactly what your surplus income in bankruptcy obligation would be, if any, you need to speak to a Trustee.

Surplus income in bankruptcy thresholds are structured based on national “poverty line” stats and the thresholds are set regardless of what part of the country or city that you live in. Surplus income in bankruptcy has nothing to do with what you have left over in funds every month. It is a federal solution which takes your monthly after-tax wages or salary, allows for a specific number of non-discretionary expenses, and takes into account your family size. Your Trustee then inputs this information into the government mandated formula, to calculate your surplus income in bankruptcy obligation.

If you have too much debt, contact us

If you are an individual or company who needs to free themselves from the stress and strain of too much debt, and especially if you have been told your situation is hopeless, Ira Smith Trustee & Receiver Inc. can prepare and carry out the plan made just for you, to free you from the burden of your financial challenges to go on to live a productive, stress-free, financially sound life.

If you’re experiencing serious debt issues with the CRA, or for any reason, contact a professional trustee for a free, no obligation consultation. The Ira Smith Team does not try to write new insolvency law or tax law. Rather, we will evaluate your situation within the existing statutes, 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. Starting Over, Starting Now you can be debt free with the help of a professional, licensed trustee in bankruptcy. Contact us today.

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CORPORATE BANKRUPTCY SERVICES: WHO WILL GET ON THE 2016 LIST?

corporate bancruptcy services, bancruptcy, corporate bankruptcy services, Canadian industries, oil and gas industry, automotive industry, construction industry, bankruptcy, bankruptcy leader, lines of credit, home-equity loans, car leases, credit cards, mortgages, debt, ira smith trustee, starting over starting now, corporate bankruptcyWhich industries may require corporate bankruptcy services in 2016?

Canada and Canadians are facing serious economic challenges, and certain industries have been much harder hit than others. Oil and gas, automotive and construction have taken the biggest hit and there are no clear signs of recovery any time soon. They may very well require corporate bankruptcy services (sometimes misspelled corporate bancruptcy services) in 2016. And, according to Statistics Canada, accommodation and food services, transportation and warehousing, and information and cultural industries experienced the biggest increase in insolvencies.

Our list of the top candidates for corporate bankruptcy services in 2016

  • The oil and gas industry: According to Bloomberg business, the oil price crash is taking a heavy toll on Canada and the worst is yet to come. As a result, Calgary is taking the brunt of it with crime on the rise, house prices falling rapidly and food banks being overwhelmed. “We all know someone who has lost a job,” Naheed Nenshi, the city’s mayor, said in a speech this month, lamenting the “funeral”-like atmosphere in the business community. The bloodletting isn’t over yet. Already 40,000 oil and natural gas positions have been lost in the last 18 months and many more job cuts are predicted in 2016.
  • The automotive industry: The auto industry is on very shaky ground. Mexico and Tennessee have replaced Michigan and Ontario as the North American auto industry’s manufacturing hubs. Canada’s auto trade has gone from a surplus of $15-billion in 1999 to a deficit of $18-billion in 2013; half of which came from trade with Mexico. Production commitments made by General Motors Co. (GM), including those made within the corporate bankruptcy services that created “Old GM” and “New GM”, and Chrysler Group LLC as part of their $13.7-billion bailouts, are set to expire at the end of 2016, leaving them free to close plants and lay off workers if they see fit. According to Charlotte Yates, dean of social sciences at McMaster University and head of the new Canadian Automotive Policy Partnership, if Canada is determined to keep trying to compete in today’s globalized auto industry, it can’t do it without subsidies.
  • The construction industry: The construction industry is a corporate bankruptcy services leader. Industry Canada’s July bankruptcy statistics have ranked the construction industry as one of the leaders in bankruptcies and experts attributed the statistics to a risky business with poor management and cash-flow monitoring.

Canadians and their debt

Canadian consumers are the most indebted in the world according to Tom Bradley of Steadyhand funds, “Lines of credit, home-equity loans, car leases, credit cards, high-ratio mortgages—they’re well-versed in them all. The level of consumer debt will make it difficult to attain the growth and employment levels of previous cycles; past purchases were borrowed from the future. Extensive use of leverage will also make Canadian families and the overall economy vulnerable in the next economic slowdown”.

If you’re like many Canadians and Canadian corporations experiencing serious financial problems, now is the time to deal with them. The Ira Smith Team will tackle your financial issues head on and with immediate action and a solid plan you can be on your way to a debt free life Starting Over, Starting Now. Contact us today.

 

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#VIDEO: AVERAGE STUDENT LOAN DEBT: REASONS WHY WE PITY YOU#

The rise of average student loan debt

Average student loan debt is getting out of control. Post-secondary education is effectively a need for today’s labour market. According to the Canadian Federation of Students in its paper titled: “The Impact of Student Debt”, unfortunately, since the demand for education has inflated, public funding did not keep up. Public funding shortfalls have resulted in the increased cost of post-secondary education being borne by students.

The growth in average tuition fees

From 1990 to 2014, the national average tuition fees have seen an inflation adjusted increase of over one hundred and fifty per cent (150%). In Ontario, tuition fees have grown over one hundred and eighty percent (180%). For most students—often having spent very little time active within the workforce, other than for part-time work—funding their education has become more and more troublesome.

Students now taking on higher levels of average student loan debt

Many students are now taking on increased levels of debt for their education. Students requiring a Canada Student Loan currently graduate with an average student loan debt of over $28,000. Keep in mind that this is an average, with the costs of graduate education resulting in higher debt levels. Relying on debt to finance education suggests that there is a delay in the full impact of high tuition fees till after graduation—when interest begins to be charged.

Societal issues caused by rising average student loan debt statistics

This impact is now exacerbated by the effects of the most recent recession and the rising trend of precarious, and even unpaid, employment. The broader effects of high levels of student debt on both the person and the general economy are now resulting in various issues:

  • Young Canadians (15-24) accounted for over half of job losses over the last 5 years;
  • Un and under-employment can cost the Canadian economy over $22 billion by 2031;
  • In 2014, youth un and under-employment was twenty-seven per cent (27%);
  • Thirty per cent (30%) of medical students expect to graduate with over $100,000 in student debt;
  • Under-employment and work outside one’s field of study results in talent degradation, falling behind in ability, and lost networking opportunities;
  • Canada has seen a fifteen per cent (15%) growth in Canadians under the age of 30 who still live in their parent’s home since 1981;
  • Those with student debt have a fewer assets, savings or investments compared to debt-free peers.

Average student loan debt causes affect the Canadian economy

Starting out with huge debt and facing a weak labour market, this prevents graduates to fully take part within the Canadian economy. Student debt impacts career selections, even among professional school graduates in medicine and law. An estimate of unpaid internships is in the range of 300,000 graduates working with no pay.

Do you have too much debt? Then contact us now

If you are an individual or company who needs to free themselves from the stress and strain of too much debt, and especially if you have been told your situation is hopeless, Ira Smith Trustee & Receiver Inc. can prepare and carry out the plan made just for you, to free you from the burden of your financial challenges to go on to live a productive, stress-free, financially sound life.

Student loan debt has its own set of unique rules and complexities within the Canadian insolvency scheme. If you’re experiencing serious debt issues, contact a professional trustee for a free, no obligation consultation. The Ira Smith Team does not try to write new insolvency law or tax law. Rather, we will evaluate your situation within the existing statutes, 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. Starting Over, Starting Now you can be debt free with the help of a professional, licensed trustee in bankruptcy. Contact us today.

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ARE HOUSE PRICES CANADA’S NEW SUCCESSFUL BIRTH CONTROL?

house prices, debt, millennials, baby boomer, housing market, Ira smith trustee

Sky high house prices are the delight of one generation and the doom of another. Baby boomers’ happiness directly correlates with the increase in house prices. They can cash out and live the retirement they dreamed of while the younger generations are handcuffed from creating the family life that they dreamed of.

The high cost of buying into the housing market is causing many couples to delay having a family. A new survey from RateSupermarket reports that:
> 56% of respondents said their ability to start or expand their family has been impacted by house prices in their region
> 72% of millennials said their ability to start or expand their family has been impacted by house prices in their region
> 52.8% of respondents said they couldn’t expand their family in their current home
> 49.4% said the costs involved have caused thesm to change their minds about the size of their family

The house prices in Toronto and Vancouver are not for the faint of heart, with the average single-family home in both cities currently above $1 million. It’s virtually impossible for a young couple to buy into the housing market today so with few options, condos are becoming more attractive to young couples and young families.

The study from the Canadian Centre for Policy Alternatives (CCPA) senior economist David Macdonald estimates that:
A 20% decline in house prices across Canada would put 169,000 families under age 40 “underwater” on their mortgages. That’s one in 10 families in that age group. If prices fell 30% – in line with the maximum by which the Bank of Canada says Canadian house prices are overvalued – there would be 294,000 underwater families under 40, or one in seven

It doesn’t seem right that young couples feel that they can’t start a family because they can’t afford to buy a house. Or even worse, they chase their dreams, buy a house that they really can’t afford and land up deep in debt. If you’re struggling financially, seek professional help as soon as possible. The Ira Smith Team approaches every file with the attitude that financial problems can be solved given immediate action and the right plan. Contact us today so that Starting Over, Starting Now you can put your financial problems behind you and plan your future.

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MEDICAL DEBTS? DON’T BE FOOLED BY UNIVERSAL HEALTHCARE

medical debts, free healthcare, universal healthcare, healthcare debt, disability, long-term care, prescription drugs, medical debt, medical debt assistance, medical dental, medical bills, debt, ira smith trustee, starting over starting nowMedical debts? Don’t we have free healthcare?

As Canadians we pride ourselves on our universal healthcare system, which we view as free healthcare. We therefore assume that medical debts cannot arise. However, when I read that Pamela Bowes, manager of the Money Matters and workplace programs at Wellspring in Toronto recently said, “I have had more people tell me they worry more about money than they worry about cancer”, I was quite frankly shocked. Clearly Canadians don’t understand that even though we have universal healthcare, we can get into serious financial problems due to medical debt.

Medical debts without enough private insurance coverage

Here’s the reality of healthcare debt in Canada. According to a 2014 BMO Wealth Institute Report:

  • Without private coverage, Canadians can expect to spend an average of $5,391 a year on out-of-pocket medical dental costs after 65
  • Disability poses a large threat: Between ages 65 to 74, 26.3% will be become disabled
  • If the disability is mild, there may be a need for changes to a home, such as electric wheelchairs ($2,050 and up) and other devices such as scooters ($1,000-$5,000) and walkers ($150 and up)
  • If a person is severely disabled, he/she may need a personal care worker at a cost of $16 to $30 an hour or a registered nurse at a cost of $24 to $76 an hour

Medical debts for long-term care

Long-term care is another area where Canadians are totally unprepared. Stephen Frank, vice-president of policy development and health at Canadian Life and Health Insurance Association reports that 75% of Canadians have no long-term financial plan for long-term care if they need it. Long-term care isn’t covered under the Canada Health Act. Home care may be covered, partly covered or not covered at all depending on the province you reside in and our annual income. According to Statistics Canada there is about a:

  • 10% chance of needing long-term care by age 55
  • 30% chance by 65
  • 50% chance by 75

A nursing home in Ontario can cost between $14,000 and $132,000 annually, while long-term care averages $20,800 to $29,300 (Senioropolis). Add to this the cost of certain medical treatment and the medical bills could pile up. Provincial plans cover most prescription drugs for seniors 65 years of age and older, but younger retirees have to pay for their medications unless they have an extended healthcare plan. And, then there are certain drugs that are not covered under the provincial plans, regardless of your age. This may leave a Canadian with thousands of dollars of medication debt.

Do you have too much debt? Contact us

If you are an individual or company who needs to free themselves from the stress and strain of too much debt, and especially if you have been told your situation is hopeless, Ira Smith Trustee & Receiver Inc. can prepare and carry out the plan made just for you, to free you from the burden of your financial challenges to go on to live a productive, stress-free, financially sound life.

If you’re struggling with a mountain of unexpected medical debts and need medical debt help, or any serious debt issues, help is just a phone call away. Starting Over, Starting Now we can help you deal with what seems like insurmountable debt and breathe easy again. Contact the Ira Smith Team today.

 

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COLLECTION AGENCIES NOT SO SECRET SOCIAL MEDIA TRICKS

debt, collection agencies, social media, social media sites, Facebook, Google Chrome, Marauder’s Map, InstagramDon’t say anything online that you wouldn’t want plastered on a billboard with your face on it.

Erin Bury

Collection agencies have internet access too

So true! Once something is out there in cyberspace you can’t get rid of it. There is no delete button. Therefore, it can be no surprise that collection agencies are using social media to track debtors. The amount of personal information that we give up on social media sites is shocking.

Collection agencies can read social media postings

Did you know that Facebook tracks the location of all of your messages? Facebook’s Messenger app uses location data. And, with a Google Chrome extension called Marauder’s Map, a person’s exact location is revealed if their location settings are enabled. Instagram also collects specific data about users’ locations based on where they post images.

It’s no wonder that collection agencies have realized the value of social media in tracking down debtors. “Normally, collectors use social media to locate people or see if there are any assets that might be collectable,” notes Joel Winston with the Federal Trade Commission.

Collection agencies look to see if your social media backs up your story

Before you go ahead and post information on any of the social media sites, stop and think first. Posting photos of your recent trip to Tahiti while you’re pleading poverty to the debt collector is never a good idea. Remember that every time you post an item on a social media site you’re giving up personal information.

What to do if collection agencies are hounding you

If you’re been chased by collection agencies you need professional help and you need it now. Contact Ira Smith Trustee & Receiver Inc. today. There are a variety of options we can discuss including a bankruptcy alternative like credit counselling, debt consolidation or a consumer proposal or bankruptcy, if ultimately that’s the best course of action for you. Starting Over, Starting Now you can be on your way to living a debt free life.

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THE THREE THINGS GREY DIVORCE SUPPORT GROUPS NEED TO DO

debt, gray divorce, gray vs grey, grey divorce, grey divorce support groups, grey divorcees, professional trustee, trustee in bankruptcy, bankruptcy alternative, credit counselling, debt consolidation, consumer proposal, bankruptcy, retirement, retirement savingsGrey divorce support groups need to show you the sticker shock!

According to Statistics Canada, “grey divorce” has been steadily growing among those 55 and over and “gray divorce” has been growing for Americans 50 and older. Regardless of the gray vs grey spelling, the issues are the same on both sides of the border.

Canadians are struggling with debt, even those that are married and have the advantage of two incomes. However, once you separate your finances from one another and create two independent lives and lifestyles, the sticker shock sets in.

Grey divorce support groups know this only too well from their experience of counselling many who have come down this path before you. Housing is the most expensive item to fund and maintain on your own; and all of the other expenses that were essentially shared, are now the financial burden of one instead of two.

Grey divorce support groups need to teach you what Investors Group has to say

According to Investors Group:

  • 80% of grey divorcees (people who divorced at the age of 50 or older), say they will delay retirement because they need to work longer than planned
  • 62% say their post-divorce savings and investments will no longer be adequate to fund their retirement
  • 54% of those who divorced at or past the age of 50 found it difficult to make financial decisions surrounding their divorce
  • 53% had to adjust their retirement plans
  • 47% will have to scale back on their anticipated retirement lifestyle
  • 26% no longer have enough retirement savings

Grey divorce support groups need you to understand your true income needs

As a result of grey divorce many Canadians are not only to delaying their retirement plans, they are falling into debt and dealing with it by accumulating more debt. This is a recipe for financial disaster.

Contact us today

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

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# VIDEO – FINANCIAL INFIDELITY HELP: USE THESE SECRET STRATEGIES TO SAVE YOUR MARRIAGE #

Financial infidelity meaning

Financial infidelity occurs when couples with joint finances lie to each other about money. For example, one partner may hide significant debts in a separate account while the other partner is unaware.

Couples need financial infidelity help

The media describes the topic of financial infidelity often. We have also written about financial infidelity help advice in the past:

Studies show for financial infidelity help

The noted UK publication, The Guardian, recently published its article “Financial infidelity: how to prevent money secrets from hurting a marriage”. In the article, they noted that:

  • in 2011, the National Endowment for Financial Education discovered that 31% of Americans who responded to a poll admitted lying to their partners about their finances
  • 67% of respondents said the secrets – when revealed – led to arguments, 42% said it damaged trust, and 16% said it even led to divorce
  • their updated survey in 2013 showed an increase from 31% to 33% of respondents

9 signs that financial infidelity help is required

Entrepreneur Magazine recently published an article titled “9 Signs of Financial Infidelity”. That article listed them as:

  • New spending patterns
  • Excessive shopping
  • Fat brokerage statements
  • Moodiness
  • Sudden changes in compensation
  • Recent purchases of art or antiques
  • Newly opened accounts
  • Signing documents without review
  • Lack of communication

We can provide financial infidelity help to get you out of debt

When it comes to marriage finances, honesty is the best policy. If you have committed financial infidelity or have been the victim of financial infidelity, you may be in serious financial jeopardy. Don’t wait until you are out of options. Contact a professional trustee as soon as possible. The Ira Smith team is a full service insolvency and financial restructuring practice serving companies and people throughout the Greater Toronto Area (GTA) facing financial crisis or bankruptcy that need a plan for Starting Over, Starting Now. We can help. Call today.

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CREDIT SCORE CHART MATCHMAKING SECRETS

budgetingX CreditX credit scoreX credit score chartX credit score rangeX credit scoresX DebtX Federal ReserveX financial healthX financial stressX money managementX starting over starting nowThe Federal Reserve uses the credit score chart for matchmaking?

Did you ever envision that your credit score chart would provide the key to successful matchmaking? From newspaper columnists to Dr. Phil, everyone is a relationship guru; but you may be surprised to learn that the Federal Reserve is also dispensing relationship advice.

Economists Jane Dokko, Geng Li and Jessica Hayes believe that the credit score range contained in a credit score chart has an important role to play in predicting the stability and potential longevity of a relationship. This is what they discovered:

  • People with credit scores at the higher end of the credit score chart are more likely to be in a committed relationship and stay together
  • People tend to form relationships with others who have a similar credit score as them
  • The strength of the match, both in the headline credit score and its details, is predictive of whether or not a couple are more likely to break up for observable reasons pertaining to finance and household spending
  • Credit scores are indicative of trustworthiness in general, and couples with a mismatch in credit scores are more likely to see their relationships end for reasons not directly related to their use of credit

Better budgeting and better ranking on the credit score chart leads to better relationships

Echoing these findings, in a recent survey by Ally Bank 55% of respondents said that a strong budgeting and saving strategy was the most appealing money-related quality a partner or potential partner could have. In addition, 75% of the respondents to this survey said it was moderately or highly important to find a partner with a similar approach to money and budgeting.

Get your rightful place on the credit score chart now

Financial stress and poor money management can ruin your relationship, but it doesn’t have to. Don’t be afraid of debt. Face it head on with the help of the Ira Smith Team. We can help you restore your life to financial health Starting Over, Starting Now. Contact us immediately so that we can create your personalized plan to get you your better place on the credit score chart. Give us a call today.

Call a Trustee Now!