Tag: financial restructuring

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FINANCIAL LITERACY BOOKS ARE GREAT BUT MAY NOT BE YOUR BEST RESOURCE

Financial literacy books: Introduction


The power of today’s technology enables one to discover ways to learn without needing to look very hard for it. The Internet has changed the ways we learn and in general, approach life. To gain financial literacy, financial literacy books are now merely one of many ways we can use to improve our financial acumen.

The academic system, for the most part, still uses classical teaching methods. As a standard, literacy is defined as the ability to write and read. Financial literacy is the ability of people to learn and understand basic financial concepts, strategies and information.

Unfortunately, financial literacy is not so common after all. With 21st century education, financial reading and financial writing can be used to make financial liberty. Financial literacy ought to not be a far-flung idea for people, starting at a very young age.

Financial literacy books: Think differently

In his best-selling book “What I Didn’t Learn in School however I Wish I Had“, author Jamie McIntyre talks about the relevance of financial literacy and 21st-century education. From the title of his book, he freely tells us that we are not discovering what could have been general information for success. The standard view forces the most people to be and follow a structure in a system before all the modern tools available to us today.

As a self-made millionaire, Jamie McIntyre advocates that to be a financial success, people need to be doing the opposite of what others have actually been doing for so long. By being financially literate, we can find reasons why people fail and discover ways to avoid these factors.

Financial literacy transcends the standard read-write approach. By having a different method or viewpoint to one’s life, financial literacy can be used to establish various monetary strategies with the hope of accomplishing financial flexibility.

Financial literacy books: There are many methods to increase financial literacy

To become financially literate, there are many ways people historically have learned about finance, with some new ones. I think some people would say that we can take financial courses or try to get the best financial advice from the best financial advisor. Others may suggest to read the best financial advice books of all time or go to the most popular money advice websites.

However, a research paper released in September 2018, may just give us a glimpse into a different way of gaining financial literacy.

Financial literacy books: What is financial literacy?

Financial literacy is the ability of people to get an understanding when it comes to standard monetary strategies and information. With 21st century education, financial reading and monetary writing can be used to obtain monetary flexibility. Financial literacy needs to not be a far-flung idea for individuals of any age.

Financial literacy books: A new research study

A brand-new research study discovered that people with reduced financial knowledge have a tendency to find out more and make far better choices about money if they are helped by peers that have comparable degrees of financial expertise. This is the case more than if they read financial literacy books or got financial advice from people with much more financial experience and knowledge.

The study, Peer Advice on Financial Decisions: A case of the blind leading the blind?, was released in September 2018. The research showed that the majority of university undergrads with little financial acumen learned better after looking for help from a peer that was in a similar way unenlightened and not somebody having a lot more financial savviness.

While this may strike you as being strange, the study described why it makes good sense. Learning was better between people who can understand and had the patience for each other’s learning gaps stated Professor Sandro Ambuehl, a co-author of the research and an assistant prof at the University of Toronto’s Rotman School of Management. His fellow researchers are B. Douglas Bernheim of Stanford University, Fulya Ersoy of Loyola Marymount University and Donna Harris of the University of Oxford.

Financial literacy books: A new way of learning

What this suggests to me is that one of the best ways to teach financial literacy is to start in the elementary schools and continue it throughout high school. Let groups of students interact with their peers to learn together on age proper financial and investment definitions, terms, subjects and strategies. The study suggests that and not leaving it up to people to try to learn it for themselves, promoting learning in peer groups, may be the easiest and most efficient way for learning financial literacy.

Our provincial governments should be taking the lead in encouraging our teachers to start teaching financial literacy to children at a very young age. The study indicates that by having peers work in groups to learn about financial matters, may just be the way for us to have more financially literate adults and a society that has great financial literacy. Peer groups working together to increase their financial knowledge may just be the best resource.

Financial literacy books: Do you have too much debt?

Do you feel that you don’t have sufficient financial literacy? Do you believe that the lack of knowledge has led to you making financial mistakes? Have these mistakes caused you to now have too much debt? Is the pain and stress of too much debt now negatively affecting your health?

If so, contact the Ira Smith Team today. We have decades and generations of helping people and companies in need of financial restructuring and counselling. As a licensed insolvency trustee (formerly known as a bankruptcy trustee), we are the only professionals licensed and supervised by the Federal government to provide debt settlement and financial restructuring services.

We offer a free consultation to help you solve your problems. We understand your pain that debt causes. We can also end it right away from your life. This will allow you to begin a fresh start, Starting Over Starting Now. Call the Ira Smith Team today so that we can begin helping you and get you back into a healthy, stress-free life.financial literacy books

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FORM 31 PROOF OF CLAIM: HOW TO PROPERLY COMPLETE THE PROOF OF CLAIM

Form 31 proof of claim: Introduction

In last week’s vlog, I reviewed why it is important to complete a form 31 proof of claim truthfully, and the penalties for filing a false claim. For both personal and corporate insolvency files, creditors call asking how to complete the document. I discuss in this vlog why it needs to be completed properly. I also provide a link in this blog that you can click on to see how to properly complete the form step by step.

The reference to “form 31” is merely the number of the form given to the form 31 proof of claim form under the Canadian Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) (“BIA”).

What is the form 31 proof of claim form?

Completing and returning form 31 is the second phase in the bankruptcy process. They are included with the notice of bankruptcy documents mailed out by the licensed insolvency trustee (formerly known as a bankruptcy trustee) (the “Trustee”) to formally notify the creditors of the bankruptcy.

When properly completed and filed by each creditor, they are what a Trustee uses to compare the debt as listed on the debtor’s bankruptcy sworn Statement of Affairs. The amount claimed by a creditor is normally different than the amount of the debt listed on the bankruptcy schedules. The reason for this is normally because the creditor’s records are accurate to the penny, while the bankrupt’s records are usually not up to date.

The process is the same whether you are filing a secured claim, an ordinary unsecured claim or a priority claim, which is also unsecured, under s.138 of the BIA. What is important is that you need to have a provable claim.

If the Trustee determines that you have either an unliquidated claim or a contingent claim, there will be additional steps you will need to take for the Trustee to be able to ascribe a value and for you to have a properly proved claim.

Form 31 proof of claim: Form 31

In every:

the Trustee will supply to all creditors form 31 document. If the debtor who intends to restructure first files a Notice of Intention To Make a Proposal, a claim form is not sent out at that stage. It will be sent with the actual restructuring proposal and other related documents.

The same document contains both where you can make your claim as well as complete the proxy form, if applicable. Creditors may experience difficulty completing the document. So, the Trustee provides instructions on how to complete the claim form and proxy. That is also why I have provided a step-by-step instruction sheet from the link below so you can follow exactly how to complete the form.

form 31 proof of claim
form 31 proof of claim

Form 31 proof of claim: Acceptability of proof of claim

It is important to properly complete the document. It must be completed fully and properly. The claim must include all necessary details called for under the BIA. Below is a link to an example on how to properly complete the form 31 proof of claim. A Trustee is required to review all proofs of claim received.

The purpose of this is to know what claims are acceptable to be admitted for voting at the First Meeting of Creditors. Also, all proofs received either before or after the creditors’ meeting must also be reviewed carefully to make sure that they are acceptable if there is a dividend to be paid on the claims in the insolvency proceeding.

The Chair of the creditors meeting has the power to admit or disallow claims for the purpose of voting at the meeting. The Trustee has the same power for the proofs of claim for dividend purposes. Most times the Trustee will also be the Chair at the meeting of creditors.

It is incumbent on the Trustee to communicate with creditors whose claims the Trustee believes to be deficient. The purpose is to obtain additional information to make a final determination. The Trustee has to decide whether to admit or disallow a specific claim.

As you can see, completing the document properly is essential.

Does a creditor have to file a claim?

Nobody will force a creditor to file a claim in a bankruptcy estate. A creditor’s claim becomes valid when the creditor files it and the Trustee accepts it. . When a creditor files a claim against a bankruptcy estate, the creditor is making a claim that the Trustee should record and count their claim so that the creditor will be entitled to receive their pro-rata share of any dividend payments that may be made.

The Trustee will issue the maximum payment each creditor is entitled to when the bankruptcy estate is liquidated. When a creditor files a claim, the creditor also becomes an interested party in the bankruptcy case. An interested party is a person who has a vested interest in the bankruptcy case. If the claim is filed before the First Meeting of Creditors in bankruptcy, then the creditor has the right to participate in and vote at the meeting.

Form 31 proof of claim: My example

CLICK HERE TO SEE AND DOWNLOAD PROPERLY COMPLETED

FORM 31 PROOF OF CLAIM

form 31 proof of claim
form 31 proof of claim

Can I file a proof of claim after the deadline?

There are really only two important deadlines when it comes to filing a claim. The first is before the First Meeting of Creditors. As mentioned above, if you wish to participate in that meeting, then you need to have filed a properly completed valid claim before the start of the meeting. However, if you don’t file it by then, although you won’t be able to vote at the meeting, you have not lost out on anything else.

Once all the realization of assets of the bankrupt has been completed, being both the current assets, fixed assets, and possibly even intangible assets, if the Trustee has sufficient funds to issue a dividend payment, then the Trustee has to review all the claims filed. The Trustee also has to compare the claims register containing all of the creditor claims filed against the names and amounts listed in the bankrupt’s sworn Statement of Affairs.

If any creditors have not yet filed, and there will be a payment made to the unsecured creditors, the Trustee has to send a specific notice pursuant to the requirements of the BIA to each such creditor. The notice in writing says that a dividend will be paid, and if you don’t file your claim by a specific date, then you will be barred from receiving any payment.

How do I object to a form 31 proof of claim?

First, you have to be a creditor with a proven claim accepted by the Trustee. The BIA states that any creditor can inspect the claims filed. So if you have personal knowledge that a party listed on the sworn Statement of Affairs is really not a creditor, then you would be assisting the Trustee by reviewing the claims filed and pointing out any claims you believe are invalid, and why. However, it is very unusual for a creditor to take the time to do so.

The next opportunity and really the only time it matters, for a creditor to object to a claim filed by a creditor is if a dividend distribution is going to be made and the Trustee sends out the Final Dividend Sheet. If you think there are errors, then you can object to the approval of the Trustee’s Final Statement of Receipts and Disbursements and the Dividend Sheet.

Reasons that you may feel one or more claims are incorrect could be:

  • You do not believe that someone that has filed as a secured creditor can provide adequate proof of security with their claim.
  • You feel that the compromise of claims being proposed is improper.
  • There may be details of payments received by a creditor are missing and therefore their claim is overvalued.
  • The priority of claims listed is improper.
  • The priority of payment as listed in the Trustee’s Final Statement is incorrect.
  • Some of the more complicated claims, such as the claim of lessor, a claim by wage earner, claim by farmer or another claim for employees have been incorrectly calculated by the Trustee.

If you have any concern that there is an error with the amounts being claimed, or if you believe that there are circumstances where one or more claims are not valid, you should immediately communicate this to the Trustee.

Keep in mind that once the Trustee issues the Final Statement with Dividend Sheet and has the intention of making a payment to all creditors with valid claims, you have to file your own objection within 30 days of the date on which the notice was issued.

Form 31 proof of claim: Do you need help?

Do you or your company have too much debt? Is a financial restructuring or debt settlement plan necessary but you just don’t know where to start? If so, then you need the help of a professional trustee.

The Ira Smith Team has years of experience of helping individuals and companies successfully complete their restructuring proposal debt settlement plans. 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 door.

form 31 proof of claim
form 31 proof of claim

You’re simply one phone call away from taking the necessary steps to get back to leading a healthy, balanced hassle-free life, recover your money and move on to the next investment opportunity. Call us today for your free consultation.

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COMPANY RESTRUCTURING PROCESS CASE STUDY: HOW WE USED BUSINESS RESTRUCTURING IN CANADA TO SAVE THE BUSINESS AND JOBS

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Company restructuring process: Introduction

Over the last two weeks, we have provided you with real case studies from our files. This week’s case study is about our involvement with a company restructuring process so its business could continue to serve its clients and maintain most of the jobs.

Two weeks ago we described a personal insolvency case study, CLAIM BANKRUPTCY IN ONTARIO CASE STUDY: SHE REALLY WANTED TO BUT WE STOPPED HER AND SOLVED HER PROBLEMS, was about the surgeon who became insolvent because of a failed business venture and a divorce. The events leading up to the doctor’s insolvency convinced her that she had to go bankrupt. We then described the steps we took to restructure her affairs so she could avoid bankruptcy. She completed a successful Proposal under the Bankruptcy and Insolvency Act (Canada). More importantly, she regained her confidence, we eliminated her pain points and she is once again thriving emotionally, physically and financially.

Last week, we described a situation where we used our skill set in a different way. In our case study, COURT APPOINTED ESTATE TRUSTEE CASE STUDY: IF IT WAS EASY YOU WOULDN’T NEED US, we described how we ended a war between the two beneficiaries under a Will and monetized the assets for their benefit. In that situation, the Court appointed us as the court appointed estate trustee.

Company restructuring process: The social media agency

The company was a social media agency. Their clients were some of the largest household names in North America. The company made sure that their clients’ websites were eye-catching, technologically advanced using leading search engine optimization (SEO) and search engine marketing (SEM) techniques. In short, their clients had to show up on page 1 of an online search and that their websites were eye-popping and functional. The company was a Canadian and North American leader.

Company restructuring process: Life got in the way

The sole shareholder and Director experienced some health issues with a family member; that required her attention. She was tending to that emergency and it took her away from the business for lengthy periods of time. Experienced senior staff ran the business in her absence. The entrepreneur felt she could deal with business matters by telephone. They established a process where she signed documents and cheques prepared by staff members using couriers.

Company restructuring process: Senior staff were not trustworthy

WRONG!! Although she trusted the senior staff, they turned out not to be trustworthy. They made mistakes and assured the owner that the documents and cheques they prepared were correct.

They also provided her status reports assuring her that all client activities and projects were all on schedule. The reality was that certain senior staff were plotting to establish their own agency, to steal clients. The sole Director felt something was not right, but she could not pinpoint from afar what the issues were. She returned to the office and discovered that her worst fears were her new reality.

Company restructuring process: How bad was it?

Things were very bad. Billings were way behind. Cash flow had dried up. As a result of the lack of cash flow, the company was now behind in rent and had collected but did not remit source deductions totalling over $300,000. The unremitted source deductions formed a trust claim over all the company’s assets, ahead of the company’s bank. Learning all this information made the bank very uneasy and unwilling to lend any more money.

Company restructuring process: The short-term steps in financial restructuring

The sole Director and shareholder of the company contacted us. She was operating in panic mode. We assessed the situation. Our preliminary assessment was that catching up on the billings and the clients paying them in the normal course, good cash flow would return. There was also a good book of projects to start on; just not as many as normal. Thankfully, no clients had left yet.

The short-term plan we developed had 7 steps:

  1. Fire the staff involved in the attempt to start-up their own firm and steal clients. Pay their normal wages and vacation pay, but not pay in lieu of notice.
  2. File immediately a Notice of Intention To Make a Proposal (NOI) to invoke the stay of proceedings (Stay Period) so that no creditor could take action against the company.
  3. Immediately bill all unbilled projects and begin collection efforts on any outstanding invoices.
  4. Reach out to all major clients to reassure them that the entrepreneur was in control after returning from the family emergency and that she would personally be supervising all work performed.
  5. Prepare a crisis cash flow model that thankfully showed that the company could cash flow itself since the amounts owing to the unsecured creditors was not caught in the restructuring.
  6. The company required fresh capital. Luckily, the entrepreneur had enough funds to inject.
  7. Meet with the company’s banker to explain the situation and share the emergency cash flow to show that the company did not need any new funds from the bank and that the principal was going to inject the temporary funds necessary. This gave the banker the assurance that the bank line would not be pressed any further, and that the entrepreneur was willing to put her money where her mouth was.

    ISI 4
    company restructuring process

Company restructuring process: The long-term plan

Now that the situation was stabilized, we worked with the company to look at longer term restructuring needs. It needed a business debt restructuring process. We determined that the company had too much space. As it did not need to immediately replace the terminated staff, it now did not need as much space. Certain space could be given up without affecting the main space and the business.

The landlord of course was not happy about this, but was willing to work with the company. If the landlord was not cooperative, the backup plan was to repudiate the unnecessary space through the formal restructuring plan.

The terminated employees retained legal counsel, who made himself known. Various issues arose from this. Were they going to seek leave of the bankruptcy court to launch litigation for damages against the company? What counterclaim could the company prove? Should we agree to attempt to value what claims they may have without litigation and include them in the restructuring plan?

Company restructuring process: The need for more time

Upon the filing of the NOI, the company obtained a first 30 day stay where its creditors could not pursue it and to file the real restructuring proposal. The company had to run for at least a few weeks to assess if the real performance was similar to the cash flow forecast developed on day 1.

Therefore, the company’s lawyers went to bankruptcy court to seek a 45 day extension for the company to file its bankruptcy protection restructuring plan. As Trustee, we had to prepare and file our report with the court to attest to the fact that:

  1. an extension of the Stay Period is required to enable the company to continue to run in the ordinary course and complete its restructuring proposal;
  2. the company continues to act in good faith and with due diligence; and
  3. no creditor would be materially prejudiced by the extension of the Stay Period.

The Court granted the extension for this company restructuring process.

Company restructuring process: The corporate debt restructuring process

We could now finish the real corporate restructuring proposal through this bankruptcy protection process. Given the unknown of the final valuation of the terminated employees’ claims, if any, we had to build in further protection for the company. We decided that the company’s bankruptcy protection plan would be what is known as a “basket proposal”. The amount of funds available for the unsecured creditors would be a fixed amount. So, whatever the claims ended up being, the size of the pot never changed.

Under the bankruptcy laws in Canada for a corporation undergoing a corporate restructuring, we had to ensure that there were sufficient funds for the unsecured creditors to share in “the pot”. The amount had to be realistic, to get the required majority of unsecured creditors voting in favour of the corporate restructuring plan. We also had to ensure that the bank was not being compromised in the proposal and that we communicated that clearly to the bank.

Company restructuring process: The government trust claim

As stated above, the unremitted source deductions were a trust claim. The restructuring bankruptcy laws in Canada state that such a claim has to be repaid in full within 6 months of Court approval of the restructuring proposal. We revisited the company’s cash flow. Although the company was on track, over the next year, money was needed to reinvest in the business.

The entrepreneur had no more money from her own resources. Therefore, after allowing for operations and the payment of the past unremitted source deduction amount of about $300,000, we could only offer the unsecured creditors roughly 5 cents on the dollar of the proven claims from future operations. The company promised to pay that amount within 6 months of retiring the government trust claim amount. So, within 1 year of Court approval, the unsecured creditors would get their money from the corporate restructuring plan.

Company restructuring process: Solving the terminated employee claims

Seeing this, the terminated employee group did not wish to spend funds on litigation, only to receive 5% of whatever claim they may have from the restructuring plan. We ended up agreeing to a very modest amount to represent their claims in the proposal.

The meeting of creditors was held and we obtained the required majority of creditors voting in favour of the business restructuring proposal. The creditors realized it was a better outcome than if they voted the company into bankruptcy. They voted in favour of the company restructuring process. We then obtained the necessary Court approval.

Company restructuring process: The result

The company turned its operations around. It survived the coup by the terminated employees. The company produced enough cash profits to retire the government trust claim debt within 6 months of court approval. It also paid the proposal fund amount to us as Trustee on time, to be distributed to the unsecured creditors.

The company successfully restructured and operated profitably afterwards. The entrepreneur was able to sell her company several years later and retire.

Company restructuring process: The financial restructuring process

The financial restructuring process is complex. The Ira Smith Team understands how to do a complex corporate restructuring. However, more importantly, we understand the needs of the entrepreneur. You are worried because your company is facing significant financial challenges. Your business provides income not only for your family. Many other families rely on you and your company for their well-being.

The stress placed upon you due to your company’s financial challenges is enormous. We understand your pain points. We look at your entire situation and devise a strategy that is as unique as you and your company’s problems; financial and emotional. The way we dealt with this problem and devised a corporate restructuring plan, we know that we can help you and your company too.

We know that companies 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 company restructuring process as unique as the financial problems and pain it is 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 your company back on the road to healthy stress free operations and recover from the pain points in your life, Starting Over, Starting Now.

COMPANY RESTRUCTURING PROCESS 11
company restructuring process
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FINANCIAL INFIDELITY: DON’T WAIT FOR YOUR SPOUSE TO CHEAT BEFORE DISCUSSING MARRIAGE FINANCES

financial infidelity, financial deception, credit card, credit score, budget, balanced budget, trustee, financial restructuring, bankruptcy, starting over starting now

Financial infidelity: Introduction

Financial infidelity is on the rise and for some strange reason marriage finances is a taboo subject for many married people. Spouses are lying to each about how much they earn. Forty percent (40%) could not correctly identify which salary range their spouse falls into. Couples are not being honest about what they spend, what they spend it on and the amount of debt that they are carrying. As you will see below, financial infidelity is a major issue. Couples break their promise of being financially faithful to each other.

Financial infidelity: What some studies say

A new study from the National Endowment for Financial Education conducted with Harris Interactive reports:

  • 33% of people who have joint accounts said they have committed financial infidelity
  • 35% said they have been the victim of their spouse’s financial deception

According to CreditCards.com:

  • 2 million Americans have a bank account or credit card that their spouse doesn’t know about
  • 20% of Americans have hidden a purchase of $500 or more from their significant other

Financial infidelity: We can help get you back on the right path

Financial infidelity can be a “recipe for disaster,” said Matt Schulz, a senior analyst at CreditCards.com. “It’s incredibly difficult to keep a household budget when you don’t know how much money is coming in and out, he said. It could lead to late bill payments, which can harm your credit score”. As we have previously discussed, a balanced budget is to financial health what a balanced diet is to physical health.

When it comes to marriage finances, honesty is the best policy. If you have been either the perpetrator or 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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NON-COMPETE CLAUSE; DON’T IGNORE IT

non-compete clause, enforceable non-compete clause, non-compete, owed wages, bankruptcy, owes you wages, debt, Bankruptcy and Insolvency Act, financial restructuring, trustee, starting over starting now
Courtesy of RocketLawyer.com

Ignoring a non-compete clause can be very tempting, especially if you left your employer feeling that you weren’t given proper notice or that you were owed wages or commissions. Don’t let this type of situation cloud your better judgement because ignoring an enforceable non-compete clause can be very costly. Even bankruptcy won’t discharge you of this debt.

Recently there was an action that demonstrates clearly why not to ignore a non-compete clause. An employer terminated its agreement with one of its associates. Although a non-compete clause was in place, the associate chose to ignore it and continued doing business with several of his former boss’s customers or former customers. The employer brought action against his former associate to recover losses allegedly sustained as a result of the former associate ignoring the non-compete clause in his contract and therefore breaching his agreement with his former employer.

The claim under the judgement the employer obtained against the former associate for loss of profits was not discharged by the former associate’s bankruptcy, given that it was ruled to be a debt incurred for breach of fiduciary duty, which is a type of debt not discharged under section 178(1) of the Bankruptcy and Insolvency Act (Canada).

Don’t let your emotions cloud your better judgement. Even if you think your former employer owes you wages, ignoring an enforceable non-compete clause is not the answer. As you can see by this action, whether you leave an employer voluntarily or otherwise, if there is an enforceable non-compete clause in place, and you take customers away from your former employer during the non-compete period, not only can they obtain a judgement for the lost profits, bankruptcy also won’t discharge you of that debt.

For more information on this or any issue related to insolvency or bankruptcy contact Ira Smith Trustee & Receiver Inc. We’re an insolvency and financial restructuring practice for individuals and companies in the Greater Toronto Area (GTA) facing financial crisis. Our speciality is serving individuals and the private company entrepreneurial market, regardless of size. If you’re experiencing financial difficulties, we can help you recover financially Starting Over, Starting Now.

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DON’T BE MISLEAD BY ADVERTISING GIVING FINANCIAL ADVICE

tax lawyer, trustee, trustee in bankruptcy, bankruptcy trustee, bankruptcy, bankruptcy alternatives, credit counselling, debt consolidation, consumer proposals, financial restructuring, bankruptcy faqs, insolvency, tax lawyer in canadaHave you heard the radio advertising spots by a tax lawyer in Canada who is trying very hard to make you believe that he is The Rock Star in the world of tax problems and that he and only he can help you? One commercial ends with, “Don’t call a Trustee, call me”. Isn’t it amazing that without knowing anything about you and without a consultation, he knows exactly what your problems are and how to fix them? And, he has no way to know if a Trustee is all you require to solve your serious debt issues. However, fear based advertising must be working for him because he spends fortunes on it.

Don’t take advice from an advertisement. If you have legal issues, absolutely you need a lawyer in Canada. But, the reality is that Canadian bankruptcy law doesn’t differentiate between tax debts and other kinds of unsecured debt, therefore most people can declare bankruptcy on taxes owing. In fact, 50% of the people who file a consumer proposal or declare personal bankruptcy include some form of tax debt. If you are experiencing serious debt problems you must consult with a Trustee before declaring bankruptcy; no doubt you will have many questions about the bankruptcy process. The Trustee will evaluate your case and advise you on all of your alternatives – credit counselling, debt consolidation, consumer proposals, and bankruptcy. Bankruptcy and consumer proposals are administered by a Bankruptcy Trustee, not a lawyer. In fact you cannot declare bankruptcy through a lawyer unless the lawyer is also a Trustee in Bankruptcy.

There are cases in which you may need a lawyer:

  • Tax debts are generally discharged in bankruptcy like other debts. However, if you have tax debts and the CRA (Canada Revenue Agency) is opposing your discharge, it is recommended that you seek legal assistance.
  • In most cases Trustees do not act as your advocate. If you believe you need an advocate, you should consult a lawyer. Communication between you and your lawyer is confidential and privileged.

This is not an advertisement and we’re not telling you that we are Rock Stars. Ira Smith Trustee & Receiver Inc. is a full service insolvency and financial restructuring practice serving companies and individuals throughout the Greater Toronto Area (GTA) facing financial crisis or bankruptcy that need a plan for Starting Over, Starting Now. We approach every file with the attitude that corporate or personal financial problems can be solved given immediate action and the right plan. Our bankruptcy law is complicated. Canada (Superintendent of Bankruptcy) v. 407 ETR. Also check out our bankruptcy faqs. If you’re having serious debt issues, and yes, even tax debt, contact us today. We can provide you with realistic choices for practical decision-making.

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CORPORATE RESTRUCTURING PART 1

corporate restructuring, financial restructuring, proposal, restructuring, richmond hill, richmond hill bankruptcy, toronto bankruptcy, trustee, trustees, vaughan, vaughan bankruptcy, woodbridge, woodbridge bankruptcy, company bankruptcyMany companies are experiencing financial difficulties as a result of the current climate of economic uncertainty, fast-moving markets, increased competition and outdated business models. As Trustees & Receivers we are often involved in corporate restructuring, a process which many clients find confusing.

We know there is confusion about the meaning of the terminology, the roles played by the various stakeholders and professionals, and the difference between a restructuring business plan and the Proposal. I’ll attempt to demystify it for you.

What is corporate restructuring

Corporate restructuring is a strategy to move from financial harm and return to a financially viable state.

When to consider restructuring

When a company is having trouble making payments on its debt and this situation is one that may lead to the company’s collapse, corporate restructuring should be considered.

Corporate restructuring increases a business’ efficiency – reducing costs, increasing profits – and therefore avoiding closure.

When is a company eligible for restructuring

There is a general principle we use in determining if a business is a good candidate for financial restructuring. It is that they must have a core business that is viable. First they must shed themselves of their debt which is weighing them down. They must also develop a business plan and model that will be profitable. Then they will be able to continue to run.

When should you contact a trustee?

If your company is experiencing serious financial difficulties, the sooner you contact a trustee, the better.

Contact Ira Smith Trustee & Receiver Inc. We will evaluate your situation and create an effective restructuring plan that will help your company to become financially sound, Starting Over, Starting Now. We will help you avoid a company bankruptcy.

Watch for our next blog – Corporate Restructuring Part 2 – when we’ll be addressing the key players, stakeholders and roles in a corporate restructuring.

Call a Trustee Now!