Tag: insolvency

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BANKRUPTCY TRUSTEE SAYS A BALANCED BUDGET IS TO FINANCIAL HEALTH WHAT A BALANCED DIET IS TO PHYSICAL HEALTH

balanced budget, bankruptcy trustee, budget, financial health, debt, bankruptcy, proposal, credit card debt, trustee, starting over starting nowIn our last bankruptcy trustee blog A Balanced Budget Is To Financial Health What A Balanced Diet Is To Physical Health – Part 1, we discussed the importance of a budget to help you establish your spending limits, reduce your spending and if you stick to your budget, live within your means. This week in A Balanced Budget is to Financial Health What a Balanced Diet is to Physical Health – Part 2, we’ll be discussing a case from our files and explaining how important a balanced budget is when working with a bankruptcy trustee.

When we consult with a consumer debtor, one of the most important things for them to have is a balanced budget. In the cases of bankruptcy or proposal, a balanced budget is not optional; it is a requirement that they present us with a balanced budget as it needs to be filed in the public domain as part of their bankruptcy or proposal. In fact I will not sign off on one that doesn’t balance (except in extenuating circumstances). There are several reasons that a bankruptcy trustee says a balanced budget is a requirement for bankruptcy or proposal:

1. An insolvency filing cuts off access to credit for the debtor so they have to live within their means.
2. It is a requirement of the Act to show rehabilitation.
3. Living off credit is a likely contributor to the financial difficulty in the first place. While a proposal or bankruptcy will settle the present debts, if the lifestyle changes aren’t made the greater problem, chronic debt, won’t be solved. A bankruptcy trustee has the duty to ensure that rehabilitation has taken place.

From the files of Ira Smith Trustee & Receiver Inc.: Brian and Julie are married with no children. They can no longer afford their present lifestyle based on their income. Brian works limited part-time hours (and clings to the belief that he needs to be home at all times to work on call so he can work his way up in the ranks). Julie lost her full-time job and is having trouble finding one with equivalent hours/pay. This has been going on for over 2 months now and they have not readjusted their budget to account for the change in income. Although they do not live an extravagant lifestyle, they have become reliant on credit to maintain their lifestyle. Now they are caught in a viscous cycle; they are taking on new debt at a time they are seeking relief from the old debt they can’t pay. The reality is that until they balance a budget, even on a temporary basis, as a bankruptcy trustee, we can’t help with the old debt as they cannot live on their combined family income without incurring more debt. Therefore, they are stuck in limbo.

There are many ways to get into debt, but getting out of debt is not a do-it-yourself project. If you’re experiencing serious debt issues you need professional help from a bankruptcy trustee as soon as possible. Contact Ira Smith Trustee & Receiver Inc. today. Starting Over, Starting Now we can put you back on track to financial health.

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RESTRUCTURING AND TURNAROUND OF CORPORATIONS SAVES JOBS & COMPANIES

restructuring and turnaround, corporate restructuring and turnaround, restructuring and turnaround proposal, debt, bankruptcy, trustee, insolvency and restructuring plan, bankruptcy and insolvency act, BIA, starting over starting nowRestructuring and turnaround services can produce great benefits as long as the company recognizes early enough that it has problems. As the holidays approach, we want to hear feel good stories. Here is a great feel good story.

There are good news financial stories out there and here is one from the files of Ira Smith Trustee & Receiver Inc. If caught early enough, we can save companies and jobs through corporate restructuring and turnaround services, and avoid bankruptcy.

The Company: Professional services company which had been in business for 16 years and was in need of restructuring and turnaround services.

Hard Assets: Negligible.

How The Company got Into Trouble: The principal’s husband was travelling on business for an extended period and she decided to take leave from her business. Rather than using technology, both new and old, to supervise the business while travelling and maintaining financial control throughout, she delegated all responsibility to senior management and senior staff. In the principal’s absence the senior management made a series of decisions that put the Company in serious jeopardy:

  • They leased extra space expecting the need to hire more staff to meet the anticipated increased business, but that business never came.
  • Their rent and staffing costs were too high.
  • Notwithstanding the increased staffing and staffing costs, they also outsourced more work than before.
  • The total costs and liabilities were increasing rapidly while revenue was declining.
  • They neglected to pay the payroll source deductions throughout and a secured claim to CRA arose in excess of $500,000.

Through a combination of incompetence and foul play, the senior management and staff encumbered the business with too much debt and had created a situation where many of the firm’s top clients were about to bolt. Without the intervention of a well planned yet swiftly implemented restructuring and turnaround plan, the company would surely die.

Upon the principal’s return, she sought the advice of her accountant and lawyer and was referred to us. The principal suspected the senior management’s actions were taken with a view to harm the company so that certain members of the senior management team could start their own firm and take certain staff members with them. It became clear to us that this company was a candidate for a restructuring and turnaround, not a candidate for bankruptcy. Working with the principal, we quickly devised and began implementing the restructuring and turnaround using a Proposal under the Bankruptcy and Insolvency Act (Canada) (“BIA”).

Restructuring & Turnaround: The Company was in the BIA Restructuring and Turnaround Mode for about 1.5 years.

  • The principal worked very diligently through the Proposal process to maintain the trust of key customers.
  • She was able to give back a portion of the premises to the landlord, thereby reducing premises leasing costs.
  • She terminated unnecessary staffing, including those senior staff that was responsible for the decline of the company. The staff did launch a wrongful dismissal suit but that litigation was settled within the Proposal process.
  • After about 1 year the Company was able to change Banks and obtain a more favourable financing package.

The restructuring and turnaround plan was in place and working!

The Result: Through the Restructuring and Turnaround Proposal, the company was able to amass sufficient cash to pay off in full the source deduction trust claim in excess of $500K and they successfully completed their Proposal by paying an additional amount of $250,000 to compromise $1.2 million of unsecured debt. The Company to this date continues to operate profitably, provides employment and also contributes in other ways to the community. The restructuring and turnaround plan worked!

Serious financial problems don’t have to mean the end for a company. There are solutions other than bankruptcy. Corporate restructuring and turnaround is one of them. Contact Ira Smith Trustee & Receiver Inc. today. If caught early enough, we can save companies and jobs through corporate restructuring and turnaround services, and avoid bankruptcy Starting Over, Starting Now.

Are you, or your company in need of a restructuring and turnaround? If so, don’t procrastinate; contact Ira Smith Trustee & Receiver Inc. now!

 

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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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HIGH EARNERS LIVING PAYCHEQUE TO PAYCHEQUE

living paycheque to paycheque, living paycheck to paycheck, bankruptcy, alternatives to bankruptcy, credit counselling, debt consolidation, consumer proposals, starting over starting now, trustee, high earners, norma walton, ronauld waltonIt may surprise you to learn that high earners, earning a six figure salary is not a guarantee of financial stability or security. A big house, luxury cars and exotic vacations frequently don’t tell the real story. You may be looking at a lot of smoke and mirrors. Often these high earners become victims of their own success.

The costs of maintaining a high flying lifestyle eventually becomes too great and a debt spiral begins. No one is immune. Famous actors and actresses, lawyers, doctors and captains of industry file for bankruptcy just like the working poor living paycheque to paycheque. According to the Wall Street Journal “some high earners end up leading a lifestyle that they can barely afford, saving little or nothing for retirement and living paycheck to paycheck”.

This problem appears to be global, with no sign of letting up. In fact we reported on it last year in two blogs titled “Is Canada’s 1% Immune from Insolvency or Bankruptcy?” and Famous Celebrity Bankruptcies Happen Too. A recent study at Princeton University calls this phenomena “wealthy hand-to-mouth”. The study reports that the wealthy hand-to-mouth behave in many respects like households with little or no net worth. So, whether you’re a high earner or have little or no net worth, if you’re living paycheque to paycheque, you’re in the same boat and your options are the same.

If you are one of the high earners, or just a normal person, the time to end the spiral of debt is now. There is no time to waste. Debt doesn’t go away on its own. You need professional help and a sound plan for moving forward. Contact Ira Smith Trustee & Receiver Inc. We’re 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.

There are alternatives to bankruptcy – credit counselling, debt consolidation and consumer proposals or ultimately bankruptcy may be the answer – for both high earners and normal people. Don’t make living paycheque to paycheque a lifestyle. Call us today and take the first step towards a debt free life.

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DEBT COLLECTORS: WHAT TO DO IF THEY ARE CALLING YOU

debt collectorsDebt collectors.

Their job is to make you so miserable that you will pay off the amount they are attempting to collect. Last week we discussed debt issues that become so serious they’re referred to collection agencies. For many Canadians living paycheque to paycheque, any unexpected expense that comes up can disturb a very delicate balance and before you know it, you’ve missed a payment or defaulted on a loan. This triggers an unfortunate series of events and now in addition to the serious debt, you are being pursued by debt collectors from the collection agency. Some of them can make your life very unpleasant but you do have rights.

What are your rights? Collection agencies are regulated and each province has its own rules and regulations. In Ontario, the Ministry of Consumer Services regulates collection agencies through the administration of the “Collection Agencies Act”. If a collection agency behaves inappropriately, file a complaint with the Ministry. You have rights:

  • You must be notified in writing through the mail (not email) that your file has been given to a collection agency before they can start calling
  • The notice must include the name of the creditor (the person or business that says you owe them money), the amount the creditor says you owe, and the name of the collection agency and its authority to demand payment on behalf of the creditor
  • After sending the notice, the agency must wait 6 days before they can contact you in person or by phone.

The collection agency cannot:

  • Contact you on Sunday, except between the hours of 1 PM and 5 PM
  • Contact you on any other day of the week between the hours of 9 PM and 7 AM
  • Contact you on a statutory holiday
  • Use threatening, profane, intimidating or coercive language
  • Use undue, excessive or unreasonable pressure

The collection agency cannot continue to contact you if:

  • You send a registered letter to the agency saying that you dispute the debt and suggest the matter be taken to court.
  • You (or your lawyer) send a registered letter to the agency providing your lawyer’s contact information and notifying the collection agency to communicate only with your lawyer.
  • You have told them that you are not the person they are looking for unless they take reasonable precautions to ensure you are that person.

What should you do? The best thing to do about a collection agency and its debt collectors calling you is to deal with not only the people from the collection agency are trying to collect, but all of your debts. The best time to deal with them ideally is once you sense there is a problem and before they are referred to a collection agency.

If the debt collectors are calling you, it’s not too late to call a trustee. Ira Smith Trustee & Receiver Inc. is 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. Contact us today for a solid plan for dealing with your debts so that you can get back on track to living a debt free life.

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PAYDAY LOANS TORONTO NO CREDIT CHECK

payday loans toronto no credit check, bankruptcy, debt, financial institution, financial institutions, financial plan, interest rate, interest rates, living paycheque to paycheque, payday loan, payday loan companies, payday loans, starting over starting now, the cash store, trusteeHere is a very funny bit from “Last Week Tonight with John Oliver” on HBO regarding the predatory lending practices of payday loan companies. It is very sad, but true. It is well worth watching this video because among the humour, are some very good lessons as to why not to get involved with payday loan companies and their related very high cost of lending.

Although it applies to the US payday loan industry, it is equally applicable to Payday Loans Toronto No Credit Check also. We also have written other blogs on the dangers of the Payday Loan Industry, including:

And now, click on the video to listen to this very funny bit by John Oliver.

Instead of perpetuating the cycle of debt, we encourage you to see a professional trustee. Contact Ira Smith Trustee & Receiver Inc. for a no fee, no obligation appointment. We’re 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. It’s time to end the cycle of debt. Say NO to payday loan companies. Say YES to a solid financial plan for moving forward to a debt free life.

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SMALL BUSINESS LOANS CANADA BAD CREDIT: NEED IT?

small business loans Canada bad credit, bad credit, payday loans, payday loan companies, personal loans for bad credit, subprime loans, subprime lending, bankruptcy, small business loansWe are seeing small businesses with poor or bad credit being turned away by the traditional lenders because they require small business loans Canada bad credit. We’ve written several articles on personal loans for people with bad credit – Payday Loan Companies: There Are Options, Canadian Payday Loans No Credit Check: Too Good To Be True!, Payday Loans Are Not The Answer To Your Financial Problems, Personal Loans For Bad Credit: Interested?, Bad Credit Loans Online Attack The Already Vulnerable and others.

However searching for loans with bad credit is not the exclusive domain of individuals; there are also many small businesses who find themselves in the same predicament. And, there are a plethora of companies out there offering to give small business loans Canada bad credit or with actually no credit. Although they are not payday loan companies, they operate in exactly the same way. They are predatory lenders offering subprime loans that are not regulated and are not protected by the same laws that cover the traditional lenders.

If you’re looking for small business loans Canada bad credit, subprime loan companies will hurt your company, not help it. Caveat emptor! Buyer beware! The websites of these business loan companies look very official and several feature the Canadian flag giving the impression that they are affiliated with the federal government. Others have websites with a .org extension also giving the impression that they are government affiliated. Make no mistake; these are for profit companies with no government affiliation or association.

The subprime lending industry is exploding and is now estimated at more than $3 billion in loans a year. According to an article recently published in Bloomberg Businessweek, one of the companies specializing in subprime lending, also referred to alternative lending, is World Business Lenders. “The firm’s representatives pitch their high-rate loans to small business owners who have trouble borrowing elsewhere. World Business Lenders seizes collateral such as vehicles and other assets when borrowers can’t pay, and press legal action where World Business sues companies for missed payments, often sending them into bankruptcy. In fact, 20 percent of World Business’s borrowers were forced to close down last year, according to former executives”. Lenders specializing in small business loans Canada bad credit are no different.

If your business is experiencing financial difficulties, rather than looking for small business loans Canada bad credit, contact Ira Smith Trustee & Receiver Inc., not a subprime lender.Whether you are a small company, an entrepreneurial corporation, or a multi-faceted complex organization, our experienced bankruptcy, insolvency and restructuring team will work with you to solve problems in your financially challenged environment. Starting Over, Starting Now you can get your business back on track.

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PAYDAY LOAN COMPANIES: THERE ARE OPTIONS

payday loan, payday loans, payday loan companies, living paycheque to paycheque, interest rate, interest rates, trustee, bankruptcy, debt, financial institution, financial institutions, financial plan, the Cash Store, VanCity, starting over starting nowFinally a financial institution has stepped up to the plate and is offering a viable alternative to payday loan companies. Sadly, people who typically turn to payday loan companies are low income earners who are barely surviving and living paycheque to paycheque. Payday loan companies are not helping them; they are creating higher debt loads and holding them hostage with insane interest rates.

The Cash Store, a payday loan company, offers a $300 loan for 14 days for $69, which is an annual interest rate 599.64% on their payday loans product. Vancity, Canada’s largest community credit union with branches in Metro Vancouver, the Fraser Valley, Victoria and Squamish, launched a new financial product to combat payday loans, called Vancity Fair & Fast Loan. If a credit union member borrows $300 for minimum term of two months and pays it off in two weeks, it would cost $2.20, a 19% annual percentage rate.

The Canadian Payday Loan Association says as many as two million Canadians take out payday loans every year. There has been a lot of talk about “cleaning up the payday loan industry” but if more financial institutions follow Vancity’s lead, payday loan companies would disappear from our landscape without further government regulations.

Don’t wait for payday loans to disappear before searching out more permanent solutions. Instead of perpetuating the cycle of debt, we encourage you to see a professional trustee. Contact Ira Smith Trustee & Receiver Inc. for a no fee, no obligation appointment. We’re 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. It’s time to end the cycle of debt. Say NO to payday loan companies. Say YES to a solid financial plan for moving forward to a debt free life.

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THE CASH STORE ONTARIO: THIS PAYDAY LOAN OUTFIT NEEDED HELP AND CALLED A TRUSTEE!

Real Payday Loan Help, payday loan, payday loans, payday loan companies, guaranteed bad credit loans Toronto, bad credit loans Toronto, bad credit loans online, trustees, licensed trustees, trustee, debt, The Cash Store OntarioDo you need help-The Cash Store Ontario Payday Loan? Any other payday loan? Contact a Trustee. THEY DID!! They are currently in formal bankruptcy protection restructuring proceedings and had to stop making loans in certain provinces, including Ontario!

Payday loans such as The Cash Store Ontario payday loan are an ongoing problem and we’ve reported on this very serious issue in a number of blogs – Legit Companies Don’t Guarantee Bad Credit Loans Toronto, Beware Of Payday Loan Companies Targeting You With Mobile Apps!, Bad Credit Loans Online Attack The Already Vulnerable, Payday Loans Are Not The Answer To Your Financial Problems, and Ontario Cracks Down On The Cash Store Payday Loan Company.

Companies and products just like The Cash Store Ontario payday loan prey on the already vulnerable, people looking for guaranteed bad credit loans. I thought that things couldn’t get worse for the consumer, until I saw a television commercial from a company called Real Payday Loan Help. This company is selling educational courses, taking advantage of people who have already been taken advantage of yet are continuing to look for companies advertising “guaranteed bad credit loans Toronto”. This is not a Canadian company; they are based in Florida. They are not professional, federally licensed trustees. They can’t offer you any help with your serious debt issues. The only thing they can do is help you create more debt.

It’s not surprising that payday loan companies and products like The Cash Store Ontario payday loan and companies like Real Payday Loan Help are moving into Canada. The United States has been cracking down on payday loan companies. Currently there are 12 states where payday loans are completely banned, but there are many more in which the industry is restricted in some way or another. In fact, only six states have no cash advance interest ceiling whatsoever. The Federal Trade Commission (FTC) enforces many laws to protect consumers in this area and they have filed many law enforcement actions against payday loan companies.

When you have serious debt issues you need help from a licensed trustee. Bad credit loans online will only help you get caught in a debt spiral. So, if you are involved with a company or product such as The Cash Store Ontario payday loan, you do need help. The Cash Store Ontario had to go to a licensed trustee and you should too. You need Ira Smith Trustee & Receiver Inc. We will evaluate your situation and provide you with a solid plan for moving forward so that Starting Over, Starting Now you can live a debt free life.

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CREDIT REPORT: CHECK IT TO IMPROVE A POOR CREDIT SCORE OR A BAD CREDIT SCORE

credit report, credit score, bad credit score, credit bureau, TransUnion, Equifax, credit reporting agencies, poor credit score, trustee, insolvency, bankruptcy, starting over starting nowHave you checked your credit report lately? Everyone I know does not wish to have either a poor credit score or worse, a bad credit score, but many Canadians pay little or no attention to their credit report and that’s a mistake that can seriously impact your life.

According to the Public Interest Advocacy Centre:

  • 17% of Canadian adults had checked their credit reports in the prior three years
  • Of those who checked, 18% found inaccuracies in their credit reports
  • 10% believed they were denied access to financial services because of report inaccuracies

In fact, some credit bureau watchers estimate that there are errors in 10% to 33% of credit files. You may be surprised to know that one of the biggest sources of conflict isn’t fraud, it’s cell phone providers who send overdue accounts to collection. We reported on one such story in a blog titled Your Credit Rating Can Be Ruined Even If You Don’t Do Anything Wrong. Mr. Dave Johnson of Pembroke, Ontario had his credit rating ruined by Rogers even though he never had a Rogers account and he has spent three years fighting a Rogers Bill that isn’t his. “That one derogatory record has a substantial impact on credit score and it stands out on the credit report,” says Tim Ashby, a vice-president of personal solutions for Equifax. If your credit is not in good standing you will most likely be denied a loan or mortgage. It can also affect your ability to rent housing or get hired for a job.

How often should I check my credit report?

According to the Financial Consumer Agency of Canada, check your credit report at least once a year. Review it carefully for errors and signs of identity theft. Order your credit report from both credit reporting agencies. Consider requesting your report from one agency and then waiting six months before you order from the other agency. By spacing out your requests in this way, you may be able to detect any problems sooner.

Who are the credit reporting agencies and how can I contact them to get my credit report?

The credit reporting agencies are TransUnion and Equifax. By clicking on the links you will be taken to their websites where you can access their phone numbers, fax and email in addition to information on how you get your credit report.

Should you discover that you have a poor credit score or a bad credit score, you may need professional help to return to financial health. 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. Contact us today.

Call a Trustee Now!