Tag: financial plans

WHEN YOUR FINANCIAL PLAN NEEDS A LEGAL SHIELD: NAVIGATING GTA DEBT AND THE INSOLVENCY SURGE

Post author By Brandon Smith
Post date December 1, 2025

Financial Plan Introduction: The Urgent Need to Shift from Conversation to Action

November’s Financial Literacy Month encouraged Canadians to “Talk Money”, create a financial plan and break the stigma around debt. That conversation is vital. Talking openly about money helps reduce shame and encourages people to seek help. But for many households in the Greater Toronto Area (GTA), talk alone is no longer enough.

During Financial Literacy Month, the Office of the Superintendent of Bankruptcy (OSB) and the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) issued a joint statement encouraging Canadians to take proactive steps toward financial wellness. The release urges those facing unmanageable debt to speak openly about their financial challenges and to seek early support through trusted resources—such as the OSB’s Debt Solutions Portal, CAIRP’s Navigating Financial Distress page, and regulated professionals like Licensed Insolvency Trustees (LITs), who are legally authorized to guide individuals through formal debt relief options.

On November 12, 2025, our national association, CAIRP, issued a media release indicating that there were 36,256 consumer insolvency filings in Q3 2025. Their media release stated that these latest insolvency statistics, as disclosed in the CAIRP media release, confirm what many families already feel: consumer insolvencies surged to their highest quarterly volume since the 2009 global financial crisis. For GTA residents already stretched by housing costs and rising living expenses, this is not just a statistic—it’s a wake-up call.

For many GTA residents, their 2026 budget process to create their updated or new budget must go beyond budgeting. It requires expert intervention from a Licensed Insolvency Trustee, the only professional legally authorized to administer authorized and Bankruptcies in Canada.

Building Your Personal Financial Foundation: The Core Components

A strong financial plan is like a well-built home—it starts with a solid foundation. Whether you’re just starting to assess or you are reassessing your finances after a turbulent year, understanding the core components of financial planning is essential.

Understanding Your Current Financial Snapshot

Begin by taking stock of your income, expenses, assets, and liabilities. This snapshot helps you see where you stand and what needs attention. Use tools like net worth calculators or budgeting apps to get a clear picture.

The Cornerstone: Budgeting and Emergency Savings

Budgeting your cash flow is the bedrock of any financial plan. It helps you allocate funds for essentials, savings, and goals. Aim to build an emergency fund covering 3–6 months of expenses. This buffer protects you from unexpected costs like car repairs or job loss.

Defining Your Financial Goals

Set short-, medium-, and long-term goals. These might include paying off debt, saving for a home, funding your child’s education, or retiring comfortably. Clear goals guide your decisions and keep you motivated.

Charting Your Future: Key Financial Planning Areas

Once your foundation is set, expand your plan to include growth, protection, and legacy strategies.

Smart Investing for Growth

Investing helps your money grow over time. Consider RRSPs, TFSAs, and diversified portfolios. Understand your risk tolerance and time horizon, and seek professional advice if needed.

Protecting What You Have: Insurance and Risk Management

Insurance safeguards your income, health, and assets. Life, disability, and home insurance are key components. Risk management also includes having legal documents like powers of attorney in place.

Securing Your Later Years: Retirement Planning

Retirement planning ensures you can maintain your lifestyle after you stop working. Contribute regularly to your RRSP and consider employer pension plans. Estimate your retirement income needs and adjust your savings accordingly. Make use of all retirement accounts available to you. The Government of Canada and others provide a Canadian Retirement Income Calculator.

Planning Your Legacy: Estate Planning Essentials

Estate planning isn’t just for the wealthy. It ensures your wishes are honoured, and your loved ones are protected. Create a will, designate beneficiaries, and consider trusts if appropriate. Legal advice is always recommended for estate planning needs.

Optimizing Your Finances: Tax Strategy

Smart tax planning can save you thousands. Use deductions, credits, and registered accounts to minimize your tax burden. Stay informed about changes in Canada’s tax laws and consult a tax professional when needed.

Your Financial Plan as a Shield: Mitigating Risks

Even the best financial plan can be undermined by external threats. In 2025, Canadians face rising risks that demand more than traditional planning.

Protecting Against Frauds and Scams

Financial scams are on the rise. Be cautious with unsolicited calls, emails, and offers for different investment accounts. Use secure passwords and monitor your accounts regularly. The Canadian Anti-Fraud Centre offers resources to stay informed.

Safeguarding Against Financial Abuse

Financial abuse—especially among seniors—is a growing concern. Watch for signs like unexplained withdrawals or pressure to sign documents. Protect yourself by involving trusted professionals and maintaining control over your finances.

The Turning Point: When a Financial Plan Requires Legal Intervention

Despite best efforts, many Canadians are finding that traditional financial planning is no longer enough. The latest data confirms a troubling trend:

Q3 2025: 36,256 consumer insolvency filings, the highest since 2009
48% of Canadians are within $200 of insolvency each month. This reality dates back to an Ipsos poll conducted in 2016. This statistic has not gotten better with ongoing polls up to today.
On November 26, 2025, Rental Market Trends reported that GTA rent averages around $2,350.
The Canadian Bankers Association reports that residential property mortgages make up 74-75% of household debt.

These figures reveal a structural crisis. Budgeting and saving can’t solve insolvency. When debt becomes unmanageable, your financial plan must evolve into a legal solution.

Why a Licensed Insolvency Trustee Is the Expert Your Financial Plan Needs

A Licensed Insolvency Trustee is the only professional legally authorized to administer Consumer Proposals and Bankruptcies in Canada. LITs are impartial officers of the court, required to review all options before recommending a formal filing.

Consumer Proposals: The Preferred Path for GTA Clients

Asset Protection: Keep your home and car if secured payments continue
Fixed, Interest-Free Payments: One predictable payment over up to five years
Immediate Legal Peace: Stops wage garnishments and creditor calls
Credit Recovery Advantage: Removed from your credit report three years after completion

This is not failure—it’s financial maturity. A Consumer Proposal is a regulated financial plan designed for recovery.

Frequently Asked Questions (FAQs)About Your Financial Plan

Q1: Why is having a strong financial plan so urgent right now?

While talking openly about money is important, taking action on your financial plan is now crucial for many households, especially in the Greater Toronto Area (GTA). Data confirms that consumer insolvency filings surged to their highest point in Q3 2025 since the 2009 global financial crisis. High living costs, such as average GTA rent around $2,350, and large household debts (with residential property mortgages making up 74-75% of that debt), reveal a structural problem. For many, budgeting alone is no longer enough to manage these risks.

Q2: What are the core components that build a strong financial plan?

A strong financial plan is like a well-built home—it needs a solid foundation. The core components involve:

• Understanding Your Current Snapshot: You must first take stock of your assets, liabilities, income, and expenses to see where you stand.

• Budgeting and Emergency Savings: Budgeting your cash flow is the bedrock of the plan. You should aim to build up an emergency fund that covers 3 to 6 months of expenses to protect you from unexpected costs like job loss or car repairs.

• Defining Your Financial Goals: Set clear goals for the short-, medium-, and long-term, such as paying off debt or saving for retirement. These goals help guide your decisions.

Q3: How does a financial plan cover long-term growth and protection?

Once the foundation is set, your financial plan should expand to cover growth, protection, and legacy strategies. Key areas include:

• Smart Investing: This helps your money grow over time using tools like Tax-Free Savings Accounts (TFSAs) and Registered Retirement Savings Plans (RRSPs).

• Protecting What You Have: This involves insurance (like life, disability, and home insurance) and ensuring you have legal documents, such as powers of attorney.

• Retirement and Estate Planning: You need to regularly contribute to retirement savings. Estate planning ensures your wishes are honored and your loved ones are protected through documents like a will.

Q4: What should I do if my financial plan cannot handle unmanageable debt?

If debt becomes unmanageable, even the best traditional financial plan may fail. When debt becomes overwhelming, especially in the high-cost GTA market, your plan must shift into a legal solution.

You should seek early support through trusted resources. If budgeting and saving are not working, it is time to speak with a Licensed Insolvency Trustee (LIT). An LIT is the only professional legally authorized to administer formal debt relief options, such as Consumer Proposals and Bankruptcies, in Canada.

Q5: What is a Consumer Proposal, and how does it help recovery?

A Consumer Proposal is a regulated financial plan that is designed for recovery when you are overwhelmed by debt. For many people in the GTA, it is the preferred path.

Key benefits of a Consumer Proposal include:

• Immediate Legal Peace: It stops creditor calls and wage garnishments right away.

• Fixed Payments: You make one predictable, interest-free payment over a period of up to five years.

• Asset Protection: You can keep assets like your home and car, provided you continue making secured payments.

A Consumer Proposal is seen as an effective tool for getting out of debt, protecting assets, and starting fresh. Speaking with an LIT allows them to evaluate your specific situation and options.

Conclusion: From Planning to Protection

So, following the lead of November’s Financial Literacy Month, just talking about finances will not be good enough for most GTA residents’ financial future. Your financial plan should grow with your needs. Heading into 2026, that means recognizing when traditional tools aren’t enough. If you’re overwhelmed by debt, especially in the high-cost GTA market, it’s time to speak with a Licensed Insolvency Trustee.

Debt is incredibly common in Canada. Rising living costs, expensive housing, long vehicle loans, unexpected emergencies—these things affect real people every day. If you’re struggling, you’re not alone, and there’s no shame in seeking help.

A consumer debt proposal isn’t a magic solution, but for many Canadians, it’s an effective tool to get out of debt, protect assets, and start fresh. The key is getting proper advice from a Licensed Insolvency Trustee who can evaluate your unique situation.

Whether you ultimately file a proposal, pursue another option, or find you don’t need insolvency proceedings at all, the important thing is taking that first step. Understanding your options is empowering.

If you’re in the Greater Toronto Area and want to discuss your situation, I’m here to help. At Ira Smith Trustee & Receiver Inc., we’ve been helping GTA consumers, entrepreneurs and their companies with debt problems for years. Our consultations are free, confidential, and pressure-free.

You don’t have to figure this out alone. Reach out today and let’s talk about your path to financial freedom, Starting Over, Starting Now.

The time to act is now.

Contact Ira Smith Trustee & Receiver Inc. today:

905.738.4167

Toronto line: 647.799.3312
brandon@irasmithinc.com or ira@irasmithinc.com
https://irasmithinc.com/

Disclaimer: This analysis is for educational purposes only and is based on the cited sources and my professional expertise as a licensed insolvency trustee. The information provided does not constitute legal or financial advice for your specific circumstances.

Every situation is unique and involves complex legal and factual considerations. The outcomes discussed in this article may not apply to your particular situation. Court decisions are fact-specific and depend on the particular circumstances of each case.

Please contact Ira Smith Trustee & Receiver Inc. or consult with qualified legal or financial professionals regarding your specific matter before making any decisions.

About the Author: Brandon Smith is a Licensed Insolvency Trustee and Senior Vice-President at Ira Smith Trustee & Receiver Inc., serving the Greater Toronto Area. With years of experience helping Canadians overcome debt challenges, Brandon provides practical, compassionate guidance for people seeking financial relief. For a free consultation, visit irasmithinc.com.

Brandon Blog Post

SAVING FOR AN EMERGENCY FUND: HEALTHY SIMPLE STEPS TO MAKE SURE YOU HAVE MONEY TO DEAL W1TH AN EMERGENCY EXPENSE

Post author By Brandon Smith
Post date August 30, 2021

saving for an emergency fund

We hope that you and your family are safe, healthy and secure during this COVID-19 pandemic.

Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

If you would prefer to listen to an audio version of this Brandon Blog, please scroll to the very bottom and click play on the podcast.

Do I really need to be saving for an emergency fund?

Saving for an emergency fund is important for safeguarding your family’s financial future. When an emergency occurs, what happens if you haven’t saved some money in advance? Should you use all your money to pay down debts or should something be set aside for a rainy day? With the COVID-19 pandemic, we have learned that you never know when and how you might be affected by a health issue.

There are times when people need to tap into their rainy day fund because of a financial emergency. There are always unexpected expenses. The idea of “emergency savings” is easy to understand. Rainy day funds: what are they and how do they work? In this Brandon Blog, I explain the importance of having an emergency fund and how you should go about saving for an emergency fund.

What are examples of emergency expenses?

Emergency savings are intended for emergencies, as its name implies. Life is full of unexpected events:

breakdown of the car or repairs because of that fender bender;
there’s a problem with the fridge;
in a recession or when the economy shuts down you lose your job, with the resulting loss of income, as we have seen;
emergency medical expenses.

In the absence of emergency fund money to cover such expenses, you could end up paying your bills with a credit card, relying on payday loans, or heavily utilizing your secured or unsecured line of credit. These are very expensive ways to meet your urgent expenses. Saving for an emergency fund so that you have funds on hand is a much better strategy.

How do I start saving for an emergency fund?

Planning your personal finances begins with a monthly budget to be able to track monthly income and monthly expenses. It can be as simple as looking at your bank accounts and credit card statements to get a handle on what your monthly income and expenses are and writing it down on a piece of paper. Or, you can get fancier and use electronic budgeting worksheets, budget apps or an online budget calculator.

You should follow three main steps when building an emergency fund.

Keep a daily record of your household expenses and categorize them as discretionary or non-discretionary.
Take an average of all your expenses over several months to get a feel for a true average monthly amount.
In addition to taking stock of your expenses, this exercise should be used to weed out all unnecessary expenditures. You can begin to save money by redirecting those unnecessary expenses into savings.

An emergency can last for any number of months, so plan ahead by setting aside enough money to last at least six months. Individuals, couples, or families have different requirements. Is it a single-income family or a double-income family? The length of time it takes to save an emergency fund, as well as the amount needed, will be determined by this.

How much savings should I have when saving for an emergency fund?

There are some rules of thumb that a financial expert would recommend when deciding how to go about creating financial plans and saving for an emergency fund. You can use the 6 months of expenses calculated in your current budget as a general rule of thumb to set up a six-month emergency fund.

A six-month benchmark for emergency funds is a good place to start, but it’s not foolproof. COVID-19 has shown that even a six-months emergency fund cannot cover your household expenses if your income is dropped for an extended period of time. Depending on your financial goals, this can be extended. Harvard University found that 46% of households in the United States that lost their jobs as a result of the pandemic spent all or most of their emergency savings.

If you are saving for an emergency fund, consider things like:

your household’s number of people;
income of the household members;
the minimum amount needed to cover your monthly household expenses; and
How stable is each income source is and is there any additional income source that can be created or you may have just not thought about, such as a side gig to create business income or income tax refunds.

Ideally, your emergency fund should be proportionate to your earning potential and reflect how much you can save. It should also represent an amount that feels comfortable for you. A very important thing not to overlook is that you need to consider your income on an after-tax basis, not gross so that you have accounted for paying your income tax on time.

5 normal questions about saving for an emergency fund during the COVID-19 pandemic

Two of the five questions we have already dealt with: (i) how do I start saving for an emergency fund?; and (ii) how much savings should I have when saving for an emergency fund?

The next 3 standard questions and answers, I list below.

Where is the best place to put your emergency fund?

An emergency fund serves as a safeguard when you are faced with a true emergency. You will feel more at ease if you can fund your expenses from your emergency account in case of unforeseen circumstances. Make sure the emergency fund is separate from the other accounts. Keeping your emergency fund liquid is essential. Avoid investments that require a long-term commitment.

I recommend that you keep a certain portion liquid in an interest-bearing savings account (is there such a thing anymore as a high-yield savings account?). Right now interest rates are low, but something is better than nothing. As I already stated, keep it separate from your other funds.

To be able to automatically save without thinking about it, set up an automatic payment each pay period from your chequing account into this saving for an emergency fund savings account. Finally, put the balance of your emergency funds into a short-term GIC that can be cashable on demand. That way, it will earn something but is also liquid if needed.

**I have a line of credit – should I still be saving for an emergency fund?**

Keeping an emergency fund is always a good idea, as mentioned above. It’s good to have a line of credit, especially if it has a low-interest rate. However, I wouldn’t use it as my first line of defence. If you don’t have enough money in your emergency fund to cover the immediate needs, you can always use your line of credit to supplement your emergency fund. In the event that you borrow to meet those expenses, you should aim to repay the borrowed funds as soon as possible.

Should I use my emergency fund to pay off debt? Should I pay down debt before saving for an emergency fund?

Yes, it is true for some people. You might want to start paying down debt before saving for an emergency fund if you have a large amount of debt and no way to repay it. When an emergency comes up, however, you will have less money on hand if you do that.

Isn’t it better to repay your debt before you start an emergency fund if you’re in debt? Yes, the answer is yes! It does not have to be done at once. It is important to pay off the smallest balance first so that you can spend more on essentials and cut back on unnecessary expenses. This strategy only works if you are disciplined enough to stick with it.

It also depends on what kind of debt. High-interest credit card or payday loan debt should definitely be paid down first. As I previously wrote in a recent Brandon Blog, those with a poor credit score have been able to pay down massive amounts of their credit card debt. However, in order to not run that credit card statement back up, the next step should be saving for an emergency fund.

Saving for an emergency fund summary

I hope that you found this saving for an emergency fund Brandon Blog informative. Unexpected emergencies, by their very nature, are not pleasant and could have the effect of adding significantly to your debt load. There are several insolvency processes available to a person or company with too much debt. You may not need to file for bankruptcy.

If you are concerned because you or your business are dealing with substantial debt challenges, you need debt help and you assume bankruptcy is your only option, call me.

It is not your fault that you remain in this way. You have actually been only shown the old ways to try to deal with financial issues. These old ways do not work anymore.

The Ira Smith Team utilizes new modern-day ways to get you out of your debt difficulties with debt relief options as an alternative to bankruptcy. We can get you the relief you need and so deserve. Our professional advice will create for you a personalized debt-free plan for you or your company during our no-cost initial consultation.

The tension put upon you is big. We know your discomfort factors. We will check out your entire situation and design a new approach that is as unique as you and your problems; financial and emotional. We will take the weight off of your shoulders and blow away the dark cloud hanging over you. We will design a debt settlement strategy for you. We know that we can help you now.

We understand that people with credit cards maxed out and businesses facing financial issues need a realistic lifeline. There is no “one solution fits all” method with the Ira Smith Team. Not everyone has to file bankruptcy in Canada. The majority of our clients never do as we know the alternatives to bankruptcy. We help many people and companies stay clear of filing an assignment in bankruptcy.

That is why we can establish a new restructuring procedure for paying down debt that will be built just for you. It will be as one-of-a-kind as the economic issues and discomfort you are encountering. If any one of these seems familiar to you and you are serious about getting the solution you need to become debt-free, contact the Ira Smith Trustee & Receiver Inc. group today.

Call us now for a no-cost consultation.

We hope that you and your family are safe, healthy and secure during this COVID-19 pandemic.

Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

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