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TORONTO CONDO MARKET: FROM RETIREMENT DREAMS TO DISTRESS SALES – A COMPLETE 2025 LOOK AT THE DECLINE

The Toronto condo market in 2025 has become a harsh teacher for many investors. What once seemed like a sure path to retirement wealth has turned into financial stress for thousands of people across the Greater Toronto Area.

As a licensed insolvency trustee firm with decades of experience, we’ve seen firsthand how real estate investments can go wrong. The stories I hear every day show just how quickly the Toronto condo market can change lives – and not always for the better. In my practice at Ira Smith Trustee & Receiver Inc., I’ve helped families navigate the aftermath of failed real estate investments.

The current situation reminds me of other market crashes we’ve witnessed. But this one feels different. It’s not just about market cycles – it’s about people who made what seemed like smart financial decisions that have now turned into their worst nightmares.

Toronto Condo Market: The Reality Behind the Numbers

Let me share what’s really happening in Toronto’s condo market right now. The numbers tell a clear story of a market under serious pressure, but behind each statistic is a real person facing real financial stress.

In August 2025, condo prices in Toronto decreased by 7% compared to the same month the previous year. According to its Toronto Housing Market Outlook 2025, Nesto Mortgage Experts reported that the average condo now sells for $571,500 in the city. The Toronto Regional Real Estate Board (TRREB) reveals that July saw GTA’s condo prices hit a four-year low, with the average condo selling for $651,000. Across the entire Greater Toronto Area, the average condo price fell to $642,000, down 5% from 2024. While this might sound like good news for buyers, it’s creating serious problems for people who bought at higher prices.

Here’s what makes this situation unique: there are now over 9,100 active listings for condos for sale in the Toronto area. That’s the highest number ever recorded for August. When the market trend is too many condos and not enough buyers, prices fall. It’s basic supply and demand, but the human cost is enormous.

The sales numbers tell an even more troubling story. According to TRREB, in the first quarter of 2025, Toronto condo sales dropped by 21.7% compared to the same period in 2024. That’s not a small dip – it’s a market in serious decline.

What really concerns me about this real estate market as a financial professional is the “months of supply” number. Right now, there are over seven months of available condo inventory. In a healthy market, you’d see about three to four months of supply. Such oversupply inventory levels mean sellers are competing desperately for the few buyers who are still active.

Toronto Condo Market: Understanding the Human Impact

Every week, I meet with people whose lives have been turned upside down by the Toronto condo market crash. These aren’t reckless speculators – they’re teachers, nurses, small business owners, and retirees who thought they were making smart investments.

Take Maria (not her real name), a 52-year-old teacher who came to see me last month. She bought a pre-construction condo in Mississauga in 2021 for $750,000, putting down $75,000 of her savings. The building was supposed to be finished in 2024, but construction delays pushed the completion to 2025. When she finally got the keys, similar units in the building were selling for $600,000.

Maria reluctantly was able to put down the extra cash needed in order to complete the purchase when her mortgage lender reduced the amount they were prepared to lend, given the lower value. The condo is rented out, but she still can’t afford all the monthly payments the rent doesn’t cover on her teacher’s salary, and she can’t sell without taking a massive loss. The stress has affected her health, her relationships, and her ability to do her job effectively.

Or consider James and Patricia (not their real names), who bought three pre-construction condos as their retirement plan. They figured they’d rent them out for income or sell them for profit. Instead, they’re facing monthly carrying costs that, even with all the rental income, don’t come close to covering their expenses. They’re burning through their retirement savings just to keep the properties.

These stories repeat in my office almost daily. Good people who made what seemed like reasonable financial decisions are now facing bankruptcy, divorce, and depression.

Toronto condo market crisis illustration showing a couple's transition from retirement investment dreams to real estate debt problems requiring insolvency trustee assistance
toronto condo market

Toronto Condo Market: When Dreams Turn Into Debt – The Basios Story

Take the publicly reported story of Dmitri Basios and his wife. Their story shows how quickly things can change in real estate. In 2020, they put money down on a small Toronto condo for $884,000. They planned to use it for their retirement – either as rental income or by selling it for a profit.

The plan seemed solid. Toronto condos had been rising in value for years. Interest rates were low. The future looked bright. They put down their deposit and waited for the building to be completed.

But when it came time to complete the purchase in 2024, everything had changed. Interest rates had gone up from near zero to over 5%. They couldn’t get financing based on the full purchase price, and even if they could, the monthly payments would have been crushing.

They had no choice but to sell their contract, known as an assignment sale. But they weren’t alone. Many other buyers in similar situations were all trying to sell their contracts at the same time. This flooded the market with desperate sellers.

Their $884,000 condo sold for just $590,000. That’s a loss of almost $300,000. But it gets worse – they’re still legally responsible for the difference. The developer can come after them for the shortfall, plus legal costs and interest.

Basios said it best:

“It’s causing stress and distress and misery.”

This isn’t just one person’s story. I see similar cases every week in my practice. People who thought they were making smart investments now face serious debt problems that could take decades to resolve.

Toronto Condo Market: The Ripple Effect Through Families

What many people don’t realize is how real estate debt affects entire families. When parents face financial ruin from bad condo investments, it impacts their children’s education plans, their ability to help with grandchildren, and their family relationships.

I’ve counselled families where parents lost the family home due to real estate debt. I’ve seen marriages end because of the stress of owing hundreds of thousands of dollars on properties worth far less.

The psychological impact is just as real as the financial impact. People feel ashamed, embarrassed, and angry with themselves. They often isolate themselves from friends and family, making the problem worse.

But here’s what I always tell my clients: you’re not alone, and this isn’t entirely your fault. The real estate industry, the media, and even the government promoted the idea that property values only go up. Many smart, successful people believed this message and made decisions based on it.

Toronto condo market crisis illustration showing a couple's transition from retirement investment dreams to real estate debt problems requiring insolvency trustee assistance
toronto condo market

Toronto Condo Market: Why the Toronto Condo Market Crashed

Several things happened at once to create this crisis. Understanding these factors helps explain why so many people are now in financial trouble.

Interest Rates Rose Fast The Bank of Canada raised interest rates from 0.25% in early 2022 to 5% by 2023. That’s one of the fastest rate increases in Canadian history. This made it much harder and more expensive to get a mortgage.

For someone buying a $700,000 condo, the difference between a 2% mortgage rate and a 5% rate is significant in payments. Many buyers simply couldn’t afford the higher payments.

The rate increases also affected developers. Building costs went up dramatically as financing became more expensive. Many projects became financially unviable, leading to construction delays and cancellations.

Too Many Condos, Not Enough Buyers When times were good, developers started building everywhere. The number of new condo projects reached record levels. Everyone assumed the demand would continue forever.

But demand didn’t just slow down – it collapsed. By 2025, there were over 24,000 unsold new condos in the Greater Toronto Area. That’s enough supply to last for years at current sales rates.

Some developers have cancelled projects entirely. In 2024 and 2025 combined, at least 23 major condo projects were cancelled, affecting thousands of buyers and billions of dollars in investments.

Investors Disappeared Many condo buyers were investors, not people planning to live in the units. Some estimates suggest that investors made up 60% or more of pre-construction condo sales during the boom years.

When prices started falling, these investors stopped buying. Without investor money, the whole system broke down. Developers couldn’t get the pre-sales they needed to secure construction financing. The market went into a downward spiral.

The investors who were already committed to purchases found themselves in terrible positions. Many are now trying to get out of their contracts, flooding the assignment market and driving prices down even further.

Economic Uncertainty People are worried about their jobs and the economy. Unemployment has been rising, and many industries are struggling. Even with lower interest rates now, many potential buyers are waiting to see what happens next.

This creates a vicious cycle. The more people worry about the economy, the fewer people buy condos. The fewer people who buy, the lower the prices fall. The more prices fall, the more people worry.

Toronto Condo Market: The Pre-Construction Trap – How It Really Works

One of the biggest problems I see involves pre-construction condos. This is when you put down money for a condo that hasn’t been built yet. For many people, this seemed like a great way to get into the market, but it’s turned into a financial disaster.

Here’s how it used to work: You’d put down a deposit of 15-20% of the purchase price, spread over several payments during construction. You’d wait for the building to be finished, then either move in or sell for a profit. Many people treated this like a sure thing.

The appeal was obvious. You could control an $800,000 condo with just a $120,000 deposit. If the condo went up in value by 20% during construction, you’d make $160,000 on your $120,000 investment. That’s a great return if it works.

But now, many of these deals are falling apart. When the condo is finally built, it’s worth less than what buyers agreed to pay years earlier. Some buyers owe hundreds of thousands more than their condo is worth.

Let me give you a real example from my practice. A client bought a pre-construction condo in 2019 for $950,000. He put down $190,000 in deposits over two years. The building was finally completed in 2024, but similar units in the building were selling for $750,000.

He had a choice: complete the purchase and immediately lose $200,000, or walk away and lose his $190,000 deposit. Either way, he was facing a massive loss. The legal term for this is being “underwater” on your mortgage. It’s a serious financial problem that can lead to bankruptcy if not handled properly.

Toronto condo market crisis illustration showing a couple's transition from retirement investment dreams to real estate debt problems requiring insolvency trustee assistance
toronto condo market

Toronto Condo Market: Assignment Sales – The Last Resort

When people can’t complete their pre-construction purchases, they often try to sell their contract to someone else. This is called an assignment sale. The original buyer assigns their purchase contract to a new buyer, hopefully for more than they originally paid.

During the boom years, assignment sales were profitable. People would buy pre-construction, then sell their contract for a quick profit before the building was even finished. Some people made this their full-time business.

But now, assignment sales have become desperation sales. The market is flooded with people trying to get out of contracts they can’t afford to complete. Prices for assignment sales are often 20-30% below the original contract price.

This creates a terrible situation for the original buyers. They’re not only losing their deposits, but they are also responsible for the difference between their original contract price and what the assignment buyer pays.

The legal implications can be complex and expensive. Many buyers don’t understand their rights and obligations, leading to even bigger financial problems down the road.

Toronto Condo Market: Warning Signs You’re in Trouble

As a licensed insolvency trustee, I’ve learned to spot the warning signs early. The sooner you recognize these signs, the more options you’ll have to protect your financial future.

Here are red flags that your real estate investment might be causing financial problems:

Financial Warning Signs:

  • You can’t make your mortgage payments without borrowing money
  • You’re using credit cards or loans to cover property expenses
  • You’re borrowing from retirement savings to cover real estate costs
  • You’re considering taking money from your children’s education funds
  • You’re thinking about getting a second mortgage on your family home

Emotional and Physical Warning Signs:

  • You can’t sleep at night because of money worries
  • You’re avoiding calls from your lender or real estate lawyer
  • You’re fighting with your spouse about money
  • You’re feeling depressed or anxious about your financial situation
  • You’re avoiding friends and family because you’re embarrassed

Legal and Practical Warning Signs:

  • You’re thinking about walking away from a deposit or purchase
  • You’ve received legal notices about your real estate contracts
  • You’re considering bankruptcy as your only option
  • You’re being threatened with legal action by developers or lenders
  • You’re thinking about lying on mortgage applications to qualify for loans

If any of these sound familiar, it’s time to get professional help. Don’t wait until your options are limited.

Toronto condo market crisis illustration showing a couple's transition from retirement investment dreams to real estate debt problems requiring insolvency trustee assistance
toronto condo market

Toronto Condo Market: What This Means for Different People

The Toronto condo market crash affects different groups of people in different ways. Understanding where you fit can help you make better decisions about your next steps.

For Current Condo Owners If you own a condo and can afford the payments, you might be okay in the long run. Toronto’s population is still growing, and people need places to live. The city isn’t going anywhere, and neither is the long-term demand for housing.

But if you’re struggling with payments, don’t wait until it’s too late to get help. The sooner you act, the more options you’ll have. Consider speaking with a licensed insolvency trustee before you fall behind on payments.

Some current owners are in situations where they owe more than their condo is worth, but they can still afford the monthly payments. In these cases, it might make sense to stay put and wait for the market to recover, even if that takes several years.

For Potential Buyers This might actually be a good time to buy if you plan to live in the condo for many years and you have a stable income. Prices are lower, and there are more choices than we’ve seen in years.

But make sure you can truly afford the payments, even if interest rates go up again. Don’t stretch your finances just to get into the market. The recent crash shows that property values can fall as well as rise.

First-time buyers now have some advantages. The government has increased the insured mortgage cap to $1.5 million, allowing more people to buy with less than 20% down. But remember, a smaller down payment means higher monthly payments and mortgage insurance costs.

For Investors in Trouble If you’re facing losses on real estate investments, you have options, but time is crucial. Don’t let pride or shame stop you from getting professional advice. The sooner you act, the more options you’ll have.

Some investors are trying to “ride it out,” hoping the market will recover quickly. But this strategy can be dangerous if you’re using credit or depleting savings to cover carrying costs. Sometimes it’s better to cut your losses and protect your family’s financial future.

For Pre-Construction Buyers If you have money tied up in pre-construction projects, you need to understand your rights and obligations. Some contracts allow you to walk away with minimal penalties, while others hold you responsible for the full purchase price.

Don’t assume that a project cancellation is necessarily bad news. In some cases, getting your deposit back might be better than completing a purchase that will result in immediate losses.

Toronto Condo Market: The Broader Economic Impact

The Toronto condo market crash isn’t just affecting individual investors – it’s having broader economic consequences that will be felt for years.

Construction Industry Collapse New condo construction starts in Toronto fell to their lowest level since 2009 in the first half of 2025. This means thousands of construction workers, contractors, and suppliers are losing work.

The construction industry employs over 400,000 people in Ontario. When condo construction slows down, the effects ripple through the entire economy. Equipment suppliers, material manufacturers, and service providers all feel the impact.

Municipal Revenue Shortfalls Cities rely on development charges and property taxes from new condos to fund infrastructure and services. With fewer new projects and lower property values, municipal budgets are under pressure.

This could lead to higher taxes for all residents, reduced services, or delays in important infrastructure projects. The fiscal impact will be felt for years to come.

Banking Sector Stress Banks and other lenders have billions of dollars tied up in real estate loans. While Canadian banks are generally well-capitalized, the scale of the condo market problems is creating stress in the system.

Some smaller lenders and mortgage investment corporations are facing serious difficulties. This could lead to tighter lending standards and reduced credit availability, making it even harder for the market to recover.

Toronto condo market crisis illustration showing a couple's transition from retirement investment dreams to real estate debt problems requiring insolvency trustee assistance
toronto condo market

Toronto Condo Market: Government Response and Policy Changes

Various levels of government have implemented policies to try to address the housing crisis, with mixed results.

The federal government has made several changes to mortgage rules, including increasing the insured mortgage cap to $1.5 million and extending amortization periods for some buyers.

Federal Government Initiatives They’ve also implemented stress tests for mortgages, requiring buyers to qualify at higher interest rates than their actual mortgage rate. While this protects borrowers from getting in over their heads, it also reduces the number of qualified buyers.

Provincial Measures The Ontario government has tried to increase housing supply through zoning changes and streamlined approval processes. They’ve also implemented rent control measures and foreign buyer taxes.

However, many of these policies take years to have an effect, and some may have unintended consequences that actually reduce housing supply.

Municipal Actions Toronto and other GTA municipalities have been trying to speed up the approval process for new developments and reduce development charges. But municipal budgets are tight, and there are limits to what they can do.

The reality is that government policies alone can’t fix the fundamental supply and demand imbalances in the market.

Toronto Condo Market: Getting Help Before It’s Too Late

The most important thing to understand is that you don’t have to face financial problems alone. Many people wait too long to get help because they’re embarrassed or hope things will improve on their own.

As a licensed insolvency trustee with decades of experience, we work with people to find solutions before their situation becomes desperate. Sometimes this means negotiating with creditors. Other times it involves formal insolvency proceedings like consumer proposals or bankruptcy.

Consumer Proposals: An Alternative to Bankruptcy Many people do not know about consumer proposals. These can be a good alternative to bankruptcy for people with real estate debt problems.

A consumer proposal allows you to negotiate with your creditors to pay back a portion of what you owe, typically over five years. The rest of the debt is forgiven. This can be especially helpful for people facing large shortfalls on real estate investments.

For example, if you owe $300,000 more than your condo is worth, a consumer proposal might allow you to pay back $100,000 over five years and have the rest forgiven. Your credit will be affected, but much less than with bankruptcy.

Bankruptcy: Sometimes the Best Option While bankruptcy is never anyone’s first choice, sometimes it’s the best way to get a fresh start. If you’re facing overwhelming real estate debt with no realistic way to pay it back, bankruptcy might be the right choice.

The bankruptcy process typically takes nine months for first-time filers, and it eliminates most debts, including real estate shortfalls. While there are consequences, including impacts on your credit rating, it allows you to start rebuilding your financial life.

Early Intervention: The Key to More Options The earlier you seek help, the more options you’ll have. If you’re still current on your payments but struggling, we might be able to negotiate with lenders or restructure your debts.

If you’ve already fallen behind, there are still options, but they become more limited as time goes on. Don’t wait until you’re facing legal action or foreclosure proceedings.

Toronto condo market crisis illustration showing a couple's transition from retirement investment dreams to real estate debt problems requiring insolvency trustee assistance
toronto condo market

What Comes Next for the Toronto Condo Market

Looking ahead, the Toronto condo market faces some serious challenges that will affect its recovery timeline.

Supply Pipeline Concerns Builders have cancelled many projects, which means fewer new condos will be available in the coming years. While this might eventually help prices recover by reducing supply, it also means Toronto isn’t building enough housing to meet its growing population needs.

The city needs to add about 40,000 new housing units per year to keep up with population growth. In 2025, it’s on track to build fewer than 25,000 units. This supply shortage will eventually push prices up again, but it might take several years.

Interest Rate Environment The Bank of Canada has started cutting interest rates again. But rate cuts do not work well when people worry about job security and the economy.

Lower rates help with affordability, but they don’t address the fundamental problem of too much supply and too little demand. The market needs time to absorb the excess inventory before any meaningful recovery can begin.

Demographic Trends Toronto’s population keeps growing. Immigration and people moving from other provinces cause this growth. This creates long-term demand for housing, but it might take several years for this demand to absorb the current oversupply.

The federal government has announced plans to reduce immigration targets, which could further slow housing demand in the short term.

Toronto Condo Market: Taking Control of Your Financial Future

If you’re dealing with real estate debt or other financial problems, remember that taking action is always better than doing nothing. Every day you wait, your options become more limited and your problems often get worse.

At Ira Smith Trustee & Receiver Inc., we’ve helped thousands of people in the Greater Toronto Area deal with debt problems. We understand that behind every case is a person or family trying to build a better future.

The consultation process is confidential and free. We’ll review your situation, explain your options, and help you understand the consequences of different choices. There’s no pressure to proceed with any particular course of action – our job is to give you the information you need to make the best decision for your situation.

What to Bring to Your Consultation When you come for a consultation, bring:

  • Recent statements for all your debts
  • Information about your real estate contracts and current property values
  • Your most recent tax return
  • Documentation about your income and monthly expenses
  • Any legal notices you’ve received

The more information you can provide, the better we can assess your situation and recommend appropriate solutions.

Protecting Your Family One of the most important things to remember is that your financial problems don’t have to destroy your family’s future. With proper planning and professional help, you can often protect important assets like your family home while dealing with problem investments.

Many people are surprised to learn that bankruptcy doesn’t necessarily mean losing everything. There are provincial exemptions that protect basic assets, and in many cases, people can keep their primary residence while eliminating other debts.

Toronto condo market crisis illustration showing a couple's transition from retirement investment dreams to real estate debt problems requiring insolvency trustee assistance
toronto condo market

Toronto Condo Market: Learning from the Market – Lessons for the Future

The Toronto condo market troubles in 2025 offer important lessons for everyone, whether you’re currently dealing with real estate debt or thinking about future investments.

Diversification Matters Many people put too much of their wealth into one investment. While real property can be a good investment, putting all your eggs in one basket is risky, no matter what that basket is.

A balanced approach might include some real estate, but also stocks, bonds, and other investments. This helps protect you if any one investment category performs poorly.

Understand What You’re Buying Pre-construction condos are complex financial instruments, not simple real estate purchases. They involve development risk, market risk, and legal risks that many buyers don’t fully understand.

Before making any major investment, make sure you understand all the risks involved, not just the potential returns. If you can’t afford to lose the money, you probably shouldn’t invest.

Have an Exit Strategy Many investors I meet never planned for what would happen if their investments didn’t work out. They assumed prices would always go up and never considered how they would handle losses.

Before making any investment, think about what you’ll do if it doesn’t work out. How much can you afford to lose? What’s your backup plan? Having these conversations before you invest can save you from financial disaster later.

Get Professional Advice Real estate transactions involve complex legal and financial issues. The cost of professional advice from lawyers, accountants, and financial advisors is usually much less than the cost of making expensive mistakes.

Don’t rely on advice from real estate agents, developers, or other people who have a financial interest in your purchase. Get independent professional advice before making big financial decisions.

Frequently Asked Questions About Toronto Condo Market Problems

Q: I owe more on my condo than it’s worth. What are my options?

A: You have several choices, and the best one depends on your specific situation. If you can afford the monthly payments, you might choose to stay and wait for the market to recover. If you can’t afford the payments, options include selling at a loss, negotiating with your lender, filing a consumer proposal to cover any shortfall to the lender (and to deal with any other unsecured debts), or in extreme cases, bankruptcy. The key is to get professional advice before making any decisions.

Q: Can I just walk away from my pre-construction condo contract?

A: It’s not that simple. Walking away usually means losing your deposit, but you will also be legally responsible for the difference between your contract price and what the developer eventually sells the unit for. This could be hundreds of thousands of dollars. Before walking away, you need to understand your full legal obligations. Some contracts have escape clauses, while others hold you fully responsible.

Q: What’s an assignment sale, and should I try one?

A: An assignment sale is when you sell your pre-construction contract to someone else before the building is finished. Right now, most assignment sales are happening at big losses because there are so many desperate sellers. You might recover some of your deposit money, but you’ll likely still face a significant loss. It might offer a better result than completing the purchase at full price, but you need legal advice to understand the implications.

Q: Will filing bankruptcy get rid of my real estate debt?

A: Yes, bankruptcy will eliminate any shortfall on your real estate debt, including a shortfall from the condo sale. However, bankruptcy has serious consequences, including impacts on your credit rating and potential effects on your employment. Before considering bankruptcy, explore alternatives like consumer proposals, which might achieve similar debt relief with fewer long-term consequences.

Q: What’s a consumer proposal, and how does it work for real estate debt?

A: A consumer proposal lets you negotiate with creditors to pay back a portion of what you owe over up to five years. The rest is forgiven. For example, if you owe $200,000 more than your condo is worth, you might negotiate to pay back $60,000 over five years and have the remaining $140,000 forgiven. It’s often a better option than bankruptcy for people with real estate debt problems. A consumer proposal will only deal with your shortfall to the lender after the condo is sold. It cannot deal with valid mortgage security debt.

Q: My developer cancelled my project. Is that good or bad?

A: It depends on your situation. If you would have lost money by completing the purchase, a cancellation might actually save you from bigger losses. You’ll get your deposit back, though it might take time. However, if you were counting on the condo for housing or investment, you’ll need to find alternatives in a difficult market. The key is understanding what the cancellation means for your specific situation.

Q: Should I use my retirement savings to cover condo losses?

A: Generally, no. Your retirement savings are often protected in bankruptcy and insolvency proceedings, so using them to cover real estate losses could make your overall financial situation worse. Before touching retirement funds, speak with a licensed insolvency trustee about protecting these important assets while dealing with your real estate debt.

Q: Can my spouse be affected by my condo debt problems?

A: If your spouse co-signed the mortgage or pre-construction contract, they’re equally responsible for the debt. Even if they didn’t sign, your debt problems can affect household finances and credit applications. However, each situation is different, and there are strategies to protect innocent spouses from their partner’s real estate debt problems.

Q: How long does the consumer proposal process take?

A: Once filed, a consumer proposal typically takes up to 45 days for creditors to vote on it. If accepted, you’ll make payments for up to five years. The entire process, from initial consultation to completion, usually takes about five to six years. During this time, you’re protected from creditor actions, and interest on your debts stops accumulating.

Q: Will I lose my family home if I file bankruptcy or a consumer proposal?

A: Not necessarily. There are provincial exemptions that often protect your primary residence, especially if there’s little equity in the property. The goal is usually to help you keep essential assets while dealing with problem debts. Each province has different rules, so you need advice specific to Ontario law and your particular situation.

Q: What happens to my credit rating after real estate debt problems?

A: Your credit will be affected, but the impact varies depending on what you choose to do. Missing mortgage payments hurts your credit. Consumer proposals appear on your credit report for three years after completion. Bankruptcy appears for six years after discharge. However, many people are surprised to find they can start rebuilding credit sooner than they expected, especially with professional guidance.

Q: Is it better to try to work things out with the developer or lender on my own?

A: While it’s always worth trying to communicate with creditors, real estate debt problems are complex legal and financial matters. Developers and lenders have teams of lawyers and financial experts working for them. You need professional representation to make sure your rights are protected and you’re getting the best possible outcome.

Q: Can I buy another property after dealing with real estate debt problems?

A: Yes, but it will take time to rebuild your credit and financial capacity. People who file consumer proposals often qualify for mortgages within 2-3 years of completion. Those who file bankruptcy might wait 2-4 years after discharge. The key is working with professionals who can help you rebuild your financial life properly.

A: Don’t ignore legal notices – they have strict deadlines that could affect your rights. Bring any legal documents to your lawyer immediately. They can help you understand what the notices mean and what options you have to respond appropriately.

Q: Is there any way to predict when the Toronto condo market will recover?

A: Nobody can predict market timing with certainty, but recovery will likely take several years. The market needs to absorb the current oversupply, and economic conditions need to improve. More importantly for people in financial trouble, you can’t wait for market recovery if you’re facing immediate debt problems. Focus on protecting your financial future now rather than hoping for market improvements.

Toronto condo market crisis illustration showing a couple's transition from retirement investment dreams to real estate debt problems requiring insolvency trustee assistance
toronto condo market

Conclusion: Hope After the Toronto Condo Market Storm

The Toronto condo market troubles in 2025 have caused real pain for many people, but there’s also hope in these stories. Markets are cyclical, and Toronto remains one of the world’s most desirable places to live and work.

People who get professional help early often find ways to protect their financial future and move forward with their lives. The key is recognizing when you need help and being brave enough to ask for it.

If you’re struggling with real estate debt or other financial problems, don’t wait. The sooner you act, the more options you’ll have. There’s no shame in asking for help – in fact, it’s one of the smartest things you can do.

Your current financial problems don’t define you or your future. What matters is how you respond to them. With the right help and the right plan, you can get through this crisis and build a stronger financial foundation for the future.

Remember, you’re not alone in this struggle. Thousands of people across the Greater Toronto Area are facing similar challenges. The difference between those who recover and those who don’t is often simply reaching out for professional help when they need it most.

At Ira Smith Trustee & Receiver Inc., we’re here to help you navigate these difficult times and find a path forward. Contact us today for a free, confidential consultation. Your future self will thank you for taking action now.

The information provided in this blog is intended for educational purposes only. It is not intended to constitute legal, financial, or professional advice. Readers are encouraged to seek professional advice regarding their specific situations. The content should not be relied upon as a substitute for professional guidance or consultation. The author, Ira Smith Trustee & Receiver Inc., and any contributors do not assume any liability for any loss or damage.


Brandon Smith is a Licensed Insolvency Trustee with Ira Smith Trustee & Receiver Inc., helping individuals and businesses overcome financial challenges. Brandon is a Senior Vice-President at Ira Smith Trustee & Receiver Inc. He serves the Greater Toronto Area. He gives kind and professional help to people with debt problems. He has helped many families navigate financial crises and build stronger financial futures. If you’re struggling with real estate debt or other financial issues, contact our office at (647) 799-3312 for a complimentary consultation.

Toronto condo market crisis illustration showing a couple's transition from retirement investment dreams to real estate debt problems requiring insolvency trustee assistance
toronto condo market
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THE STRUGGLE IS REAL, CANADIAN COST OF LIVING ON THE RISE: NAVIGATING DEBT IN CANADA’S NEW REALITY

Introduction: Understanding Canada’s Cost of Living Landscape

Life in Canada used to mean certain dreams were within reach: a comfortable home, food on the table, and savings for a secure future. But for many Canadians, due to the cost of living over recent years always rising, those dreams feel further away than ever. The Canadian cost of living has skyrocketed, placing immense pressure on families, individuals, and businesses alike. It’s a reality that’s leaving millions of Canadians feeling squeezed, stressed, and struggling with debt.

At Ira Smith Trustee & Receiver Inc., we see firsthand how the rising cost of living affects everyday people and companies. It’s not just a feeling; the numbers prove it. More than four out of ten Canadians (45%) say the cost of living is their number one concern. This isn’t just about small worries; it’s about basic survival. When the price of food, housing, and everything else goes up, and wages don’t keep pace, something has to give. Often, that “something” is financial security, leading to a reliance on credit and, eventually, a heavy debt burden.

This Brandon’s Blog explores the deep impact of Canada’s rising cost of living on consumers, entrepreneurs, and businesses. We’ll look at the unsettling statistics that show just how close many are to financial breaking point, their inability to save for the future, and the struggle to afford even the most basic necessities. More importantly, we’ll discuss practical steps and real solutions for managing debt and finding a path to financial stability, no matter how tough things seem.

The Everyday Battle: Cost of Living and Financial Survival

Imagine trying to keep your head above water when the tide keeps rising faster than you can swim. That’s how many Canadians feel about the cost of living. In 2025, a family of four in Canada needs between $4,000 and $6,000 each month just to cover basic expenses, and in big cities like Toronto or Vancouver, that can jump to $6,500 to $7,500. For someone living alone, monthly costs are often $2,000 to $3,500, possibly reaching $3,900. These aren’t luxury budgets; this is the cost of living for normal people’s housing, food, and transportation.

The main reason for this financial strain is inflation – meaning prices for goods and services keep going up; this causes the rising cost of living. This has led to something called “consumer debt,” which hit a whopping $2.5 trillion in late 2024 and kept climbing to $2.58 trillion by mid-2025. This isn’t just people buying new cars or big screen TVs; many are using credit cards to pay for groceries or their utility bills. The average non-mortgage debt per person reached $22,147 in mid-2025.

Younger Canadians, those under 36, are feeling this cost of living pain even more. They’re racking up higher credit card debt and are more likely to miss payments on their loans. Nearly 1.4 million Canadians missed a credit payment in the second quarter of 2025, a noticeable jump from the year before. This isn’t just about money; it’s also taking a huge toll on mental health. In 2024, nearly 4 out of 10 Canadians (38%) felt mental health struggles because of financial stress, and almost half (49%) were losing sleep worrying about money. When you’re constantly worried about how to pay for basic life necessities, it’s hard to feel secure or healthy.

This constant rising cost of living financial worry also affects how people feel about their future. Many Canadians are losing hope that they’ll ever get ahead. They might feel embarrassed or alone, but it’s important to remember that this is a widespread problem. Three out of five Canadians say their stress and anxiety come from debt. This makes it clear that the high cost of living isn’t just an economic issue; it’s a social and personal crisis affecting the well-being of millions.

A woman entrepreneur with their head in their hands sits on the ground, surrounded by a huge pile of crumpled bills and paper, with red, downward-trending charts around them, symbolizing financial stress and debt due to the high cost of living. The background is a dark, urban cityscape. On the right, a bright path of light extends from a lighthouse on the sea to a hand representing a licensed insolvency trustee reaching out to help the woman, with green, upward-trending charts in the air, symbolizing hope and a path to financial recovery.
cost of living

Living Paycheque to Paycheque: A Widespread Reality

The idea of living “paycheque to paycheque” means that all the money you earn goes directly to your bills and expenses, with little to nothing left over. For many Canadians, this isn’t just a saying; it’s their daily reality. A recent survey from H&R Block Canada in spring 2025 painted a stark picture: 85% of Canadians are living paycheque to paycheque. This is a huge leap from just a year before, when 60% reported the same. This dramatic increase shows how quickly things are changing and how deeply the rising costs are affecting people’s ability to save and feel financially safe.

Other studies back this up. A Leger poll in late 2023 found that 47% of Canadians were in this situation, and the Canadian Payroll Association previously reported it was around 48%. Regardless of the exact number, the message is clear: almost half, and possibly much more, of working Canadians are spending everything they earn, with no wiggle room.

Why is this cost of living problem happening? It’s a mix of things:

  • Inflation: As mentioned, prices for everything are going up.
  • Rising Interest Rates: If you have loans or a mortgage, the cost of borrowing money has increased, meaning more of your paycheque goes towards interest payments due to the increase in loan and mortgage costs.
  • High Rent and Home Prices: Housing costs are a massive expense for most, taking a huge bite out of income.
  • High Taxes: Taxes also reduce the amount of money people have left to spend or save.

Many Canadians, 82% in fact, are worried that their income simply isn’t growing fast enough to keep up with these rising costs. Some even say their paycheque isn’t enough to cover their basic expenses. This isn’t just a problem for people with lower incomes; it’s affecting middle-class families, young professionals just starting out, and even retirees who thought they were prepared.

When you’re living paycheque to paycheque, there’s no room for unexpected cost of living problems. A sudden car repair, a dental emergency, or a lost job can quickly send someone into a deep financial hole. It’s a cycle that’s hard to break, and it fuels stress and anxiety, making it even harder to make clear financial decisions.

No Emergency Savings: A Dangerously Thin Safety Net

When you’re living paycheque to paycheque, building an emergency fund feels impossible. And the statistics show that for many Canadians, it truly is. Around 41% to 50% of Canadians do not have an emergency fund at all. This means they have no savings to fall back on if something unexpected happens. To put it another way, about 46% of Canadians don’t have enough emergency savings to cover three months of essential expenses. This number has worsened over time, dropping from 64% in 2019, who had a three-month buffer, to 55% in 2024.

This lack of savings makes Canadians incredibly vulnerable. What happens if your car breaks down and needs a $500 repair? What if you have a sudden medical bill?

  • In late 2022, about one-quarter of Canadians (26%) said they couldn’t cover an unexpected $500 expense. This was more common for women (29%) than men (24%).
  • Around half of all Canadians (50% to 51%) would struggle to cover a surprise $1,000 expense. Some even admit their budget is so tight they couldn’t handle any unexpected bills.
  • Canadians are worried they couldn’t handle unexpected costs of $1,000 or more.

This is a terrifying situation. It means that a small bump in the road can become a financial disaster. Instead of savings, many Canadians are forced to rely on high-interest credit cards or loans when an emergency hits, digging themselves deeper into debt. More than one-third (35%) of Canadians would use a small loan or credit card for an emergency, and 27% are taking on debt just to cover their basic monthly needs.

The reasons for this are clear:

  • High Cost of Living: With so much money going to rent, food, and other necessities, there’s simply nothing left to save.
  • High Debt Levels: Many Canadians are already carrying record levels of personal debt, leaving little room for saving.
  • Lack of Financial Know-How: Some people struggle with budgeting and planning, even if they have some money left over.
  • Job Insecurity: The fear of losing a job also makes people hesitant to save, as they might need that money sooner rather than later.

It’s a vicious cycle where a lack of savings leads to more debt, making it even harder to build up savings in the future.

A woman entrepreneur with their head in their hands sits on the ground, surrounded by a huge pile of crumpled bills and paper, with red, downward-trending charts around them, symbolizing financial stress and debt due to the high cost of living. The background is a dark, urban cityscape. On the right, a bright path of light extends from a lighthouse on the sea to a hand representing a licensed insolvency trustee reaching out to help the woman, with green, upward-trending charts in the air, symbolizing hope and a path to financial recovery.
cost of living

The Retirement Dream Fades: Unable to Save for the Future

Beyond immediate emergencies, the long-term future is also a major concern for Canadians due to the high cost of living in Canada. The idea of a comfortable retirement, free from financial worry, is becoming a distant dream for many. Recent surveys show just how deep this anxiety runs:

  • Fear of Running Out of Money: A survey in August 2024 found that 61% of Canadians are worried they’ll run out of money in retirement. This worry is even higher for younger adults (ages 28 to 44, at 67%) and women (66%). Another survey in early 2025 reported that over three-quarters of Canadians (76%) share this fear because of rising prices.
  • Belief in Never Retiring: A truly concerning statistic from April 2025 showed that among Canadians who aren’t retired yet, 59% believe they will never be in a financial position to retire. And 66% think they’ll have to keep working even after they retire to make ends meet. For single Canadians, nearly half (45%) feel that saving for retirement is almost impossible.
  • Lack of Preparedness: Almost 40% of Canadians over 50 feel they aren’t financially ready for retirement. Many haven’t even started saving: 49% hadn’t put any money aside for retirement in the past year, and 39% said they had never saved for retirement.

The main reasons for this grim outlook are, again, the high cost of living and existing debt. When most of your income goes towards daily necessities and paying off bills, there’s little left to put into long-term savings like Registered Retirement Savings Plans (RRSPs). In fact, polling data from February 2025 showed that only 39% of Canadians planned to put money into their RRSP in 2025, a 10% drop from the year before. One in ten Canadians simply can’t afford to invest in their RRSP at all.

Canadians also feel they need more money to retire comfortably than ever before. Their retirement savings goal has jumped from $700,000 to $900,000 in just one year. Some even think they need $1.54 million. But the average Canadian’s retirement savings, not including pensions or home equity, is only around $272,000. This is a huge gap between what people have and what they feel they need.

This struggle to save for retirement isn’t just about numbers; it’s about peace of mind and the promise of a dignified older age. When people feel like they can never stop working, it affects their health, their relationships, and their overall happiness.

Feeding the Nation: Food Costs and Grocery Bills

When financial pressures mount, the first things to feel the squeeze are often the most basic. For a growing number of Canadians, affording these essentials has become a daily struggle.

Food Insecurity: The Empty Plate Problem

Food insecurity means you don’t have enough money to buy enough healthy food. It’s a problem that’s getting worse in Canada.

  • Millions Affected: In 2024, a staggering 10 million people in Canada’s ten provinces, including 2.5 million children, were living in households that didn’t have enough food. This means over a quarter of the population (25.5%) is food-insecure. This is the third year in a row this number has gone up, reaching a record high.
  • Rising Food Bank Use: The demand for food banks is at an all-time high. In March 2024, there were over 2 million visits to food banks across Canada. That’s a huge 90% increase compared to March 2019. Think about it: one-third of all food bank clients are children, and for the first time, nearly one in five (18.1%) food bank users are people whose main source of income is employment. This shows that even people with jobs are struggling to put food on the table.
  • Why It’s Happening: The main reason is simple: lack of money. Food prices have soared due to an increased cost of living. From 2021 to 2022, food bought from stores went up by an average of 9.8% across the country. Experts predict another 3% to 5% increase in food prices for 2025, meaning the average family of four could spend an extra $801.56 on food. When housing costs eat up so much of a budget, there’s simply less left for groceries.
  • Who Is Most Affected: Certain groups face this cost of living problem more than others. People in lone-parent families, especially those led by women, racialized groups (like Black Canadians), and Indigenous people often experience much higher rates of food insecurity. If you’re living in poverty, your chances of being food insecure are significantly higher.

Food insecurity isn’t just about hunger; it has serious impacts on health, leading to more illnesses, anxiety, depression, and even a shorter lifespan. It also affects children’s ability to learn and thrive.

A woman entrepreneur with their head in their hands sits on the ground, surrounded by a huge pile of crumpled bills and paper, with red, downward-trending charts around them, symbolizing financial stress and debt due to the high cost of living. The background is a dark, urban cityscape. On the right, a bright path of light extends from a lighthouse on the sea to a hand representing a licensed insolvency trustee reaching out to help the woman, with green, upward-trending charts in the air, symbolizing hope and a path to financial recovery.
cost of living

Decoding Housing Costs: The Biggest Budget Factor

For many Canadians, affording housing prices, like food, has become a daily struggle.

Housing Affordability: No Place to Call Home Comfortably

Housing costs are arguably the biggest driver of the cost of living and, therefore, financial stress for Canadians. Whether you own or rent, real estate prices are making it incredibly difficult to live comfortably.

  • Unaffordable Housing: In 2022, Statistics Canada reported that more than one in five Canadian households (22%) were spending 30% or more of their income on shelter. This is the widely accepted line for “unaffordable” housing. For renters, it was even worse, with 33% spending too much on rent, compared to 16.1% of homeowners. By March 2024, the average mortgage payment for a home was eating up almost half (47.9%) of the typical household’s income. In Toronto and Vancouver, it was a shocking 73.1% and 72.0% respectively!
  • Homeownership Out of Reach: The dream of owning a home is fading fast. In 2019, nearly 60% of Canadian households could afford a regular condo. By 2023, that number dropped to 45%. For a single-family home, only 26% of households could afford one. Young Canadians are particularly affected, with 72% wanting to buy a home, but nearly half (45%) feel it’s hopeless. A Habitat for Humanity Canada survey in November 2024 revealed that 70% of Canadians believe owning a home has become impossible.
  • Sacrificing Necessities for Housing: The most heartbreaking part of the housing crisis is that people are cutting back on other essentials to keep a roof over their heads. The Habitat for Humanity Canada survey indicated that 59% of Canadians, and 75% of renters, are sacrificing basic needs like food, clothing, and even education just to pay for housing.
  • Mental Health Toll: The housing crisis is also hurting people’s minds. Two-thirds of renters and one-third of homeowners say their the is negatively affected by housing costs. Young people are even considering leaving Canada or delaying starting a family because of how expensive housing is.
  • Rental Market Squeeze: If buying is impossible, renting isn’t much easier. There’s a severe shortage of affordable rental units. Since 2018, the average rent for a two-bedroom place has gone up 70% faster than wages. Renters with children are deeply worried about rent increases and even losing their homes.
  • Fear of Losing Your Home: A shocking 57% of Canadians, whether they own or rent, are afraid they might lose their home if their financial situation changes. This fear is highest among younger Canadians and low-income households.

The combination of rising food and housing cost of living creates a daily struggle for survival, pushing more and more Canadians into debt and despair.

The Ripple Effect: How Rising Costs Hurt Canadian Businesses and Entrepreneurs

It’s not just individuals who are struggling with Canada’s high cost of living and rising debt; businesses and entrepreneurs are feeling the pressure too. When consumers have less money to spend because their wages aren’t keeping up with high prices, it impacts businesses, especially small and medium-sized enterprises (SMEs).

Challenges for Businesses:

  • Rising Operational Costs: Just like families, businesses face higher costs for almost everything. This includes raw materials needed to make products, the wages they pay their employees, and energy bills. A Statistics Canada study reported that approximately 65.4% of businesses are expected to face cost-related challenges in mid-2025. The inflation rate is expected to be a major hurdle for almost half of all businesses.
  • Increased Borrowing Costs: When interest rates go up, it costs businesses more to borrow money. This makes it harder for them to repay existing loans or get new funding to grow. Many small businesses rely on lines of credit, which are directly tied to the Bank of Canada’s interest rates.
  • Rising Delinquency Rates: More businesses are falling behind on their payments. Over 56,000 businesses missed at least one financial payment in the second quarter of 2024, a 10.2% increase from the year before. The rate of businesses missing payments by 60 days or more also increased. A big reason for this is that businesses are struggling to pay back government loans they took out during the pandemic (like CEBA loans).
  • Reduced Investment and Productivity: When money is tight and borrowing is expensive, businesses often cut back on plans to buy new machinery or equipment. This affects overall business investment and can lead to lower productivity for the country as a whole.
  • Pandemic Debt Burden: Many businesses are still weighed down by debt from the COVID-19 pandemic. The average small business debt related to the pandemic was estimated at $139 billion in August 2021. With higher debt servicing costs, many are finding it hard to catch up. Business insolvencies (when a business can no longer pay its debts) jumped by over 41% in 2023, the biggest increase in 36 years. Many of these insolvencies were linked to struggles with CEBA loan repayments.
  • Sector-Specific Stress: Certain industries are feeling the pinch more than others. Transportation, construction, and retail businesses are facing major financial stress. For example, nearly 4.3% of transportation businesses missed payments for over 60 days in Q2 2024.

When individuals struggle, businesses also suffer. Less consumer spending means less income for businesses, which can lead to layoffs, reduced growth, and even business closures. It’s an interconnected web where the financial health of one group affects the other.

A woman entrepreneur with their head in their hands sits on the ground, surrounded by a huge pile of crumpled bills and paper, with red, downward-trending charts around them, symbolizing financial stress and debt due to the high cost of living. The background is a dark, urban cityscape. On the right, a bright path of light extends from a lighthouse on the sea to a hand representing a licensed insolvency trustee reaching out to help the woman, with green, upward-trending charts in the air, symbolizing hope and a path to financial recovery.
cost of living

Finding a Way Forward: Strategies for Managing Financial Hardship

Facing overwhelming debt and the rising cost of living can feel impossible, but there are always options. The key is to take action and seek professional help. You don’t have to face this alone.

For Individuals:

  1. Understand Your Money: Create a Budget: This is the first and most important step. You need to know exactly how much money is coming in and where every dollar is going. Write down all your income and all your expenses, from rent and groceries to your morning coffee. The Financial Consumer Agency of Canada (FCAC) has useful tools like a Budget Planner that can help. This step helps you see where you can cut back.
  2. Cut Down Expenses: Once you have your budget, look for areas where you can spend less. Even small changes add up. Can you cook more at home instead of eating out? Can you cancel subscriptions you don’t use? Every dollar saved is a dollar that can go towards debt or an emergency fund to meet unexpected expenses.
  3. Make a Debt Repayment Plan: Don’t just pay the minimum on your credit cards. High-interest debts are like a hole in your pocket. Focus on paying off the debts with the highest interest rates first (called the “debt avalanche” method) or tackle the smallest debts first to gain momentum (the “debt snowball” method). Having a plan makes it less overwhelming.
  4. Avoid New Debt: This might seem obvious, but it’s crucial. Before borrowing more money, think about all your other options. If you’re struggling to pay current bills, taking on more debt will only make things worse.
  5. Build an Emergency Fund (Even a Small One): Even if you can only save a small amount each week or month, start building a safety net. This fund can prevent you from using credit cards when unexpected costs arise. Aim for at least $500 to start, then work towards three months of living expenses.
  6. Talk to Your Creditors: If you’re having trouble making payments, don’t ignore your creditors. Call them. Many lenders have hardship programs or might be willing to work with you on new payment terms. It’s always better to be proactive than to let things spiral out of control.
  7. Seek Professional Advice: This is where a Licensed Insolvency Trustee (LIT) comes in. An LIT like Brandon Smith from Ira Smith Trustee & Receiver Inc. is a financial professional regulated by the Canadian government. They are the only professionals who can provide advice on all debt solutions, including the formal options under the Bankruptcy and Insolvency Act. They can help you understand your situation, explore all your options, and guide you to the best solution for you.

For Businesses:

  1. Assess Your Financial Health: Get a clear picture of all your business debts, including interest rates, payment schedules, and what you owe.
  2. Prioritize and Consolidate Debts: Focus on paying off high-interest business debts first. You might also consider consolidating multiple debts into a single, easier-to-manage loan if the terms are better.
  3. Optimize Cash Flow: Ensure you’re invoicing clients on time and following up quickly on unpaid bills. Negotiate payment terms with your suppliers if possible. Maintaining a healthy cash reserve is crucial for unexpected costs.
  4. Increase Revenue and Reduce Spending: Look for ways to boost sales, maybe by exploring new markets or introducing new products/services. At the same time, cut unnecessary costs without harming the quality of your products or services.
  5. Look for Government Programs and Grants: The Canadian government offers various programs, grants, and alternative financing options for businesses. Research what’s available that might fit your situation.
  6. Seek Professional Business Financial Advice: Just like individuals, businesses can benefit greatly from professional financial advisors. They can help create a budget, identify areas for improvement, and explore debt solutions tailored for businesses. A Licensed Insolvency Trustee also deals with corporate insolvencies and can guide formal business debt relief options.

Government Resources and Debt Relief Options

The Canadian government understands that people and businesses face financial challenges due to the cost of living. You could be excused from thinking that the government doesn’t care because you aren’t seeing any federal government programs that either reduce the cost of living or provide Canadians with more disposable income to meet the rising cost of living. The federal government does offer various resources and regulated programs to help.

Formal Debt Relief Options (Overseen by a Licensed Insolvency Trustee):

The federal government regulates two main legal solutions for debt forgiveness under the BIA. These are serious options that can offer a fresh start, but they must be managed by a Licensed Insolvency Trustee (LIT).

  • Consumer Proposal: This is a legal agreement between you and your creditors to pay back a portion of your debt over a period of up to five years. It can reduce your overall debt by up to 80%, and once accepted, your creditors cannot charge interest or penalties. It also stops collection calls and wage garnishments. A consumer proposal is a powerful tool that allows you to avoid bankruptcy while still dealing with your debts. Many Canadians find this a good way to get out of overwhelming debt while keeping their assets.
  • Bankruptcy: If a consumer proposal isn’t the right fit, bankruptcy is another legal process that provides debt relief. It’s typically a last resort, involving the surrender of non-exempt assets (some assets, like certain pension funds or tools for your job, are “exempt” and protected). Bankruptcy also stops collection actions and can provide a fresh financial start. Both consumer proposals and bankruptcy are overseen by an LIT to ensure fairness and adherence to the law.
  • Financial Consumer Agency of Canada (FCAC): This government agency offers excellent online tools and calculators, including a Budget Planner and a Financial Goal Calculator. They also have a free 12-module course called “Your Financial Toolkit” that covers a wide range of personal finance topics.
  • Government Aid Programs: For individuals facing income loss, programs like Employment Insurance (EI), the Canada Recovery Benefit (CRB), and the Canada Emergency Response Benefit (CERB) have provided crucial support during tough times.
  • Student Loan Forgiveness Programs: Some provinces offer programs to help with student loan debt, such as the BC Loan Forgiveness Program or the Quebec Loan Remission Program. It’s worth checking if your province has such initiatives.
  • CPA Canada’s Financial Literacy Program: Chartered Professional Accountants of Canada (CPA Canada) offers unbiased financial literacy education through various resources like publications, podcasts, and free in-person sessions delivered by financial professionals.
  • Bank of Canada’s Financial Education Resources: The Bank of Canada provides a list of trustworthy Canadian and international websites with financial information on topics like inflation, banking, and personal finance.

    A woman entrepreneur with their head in their hands sits on the ground, surrounded by a huge pile of crumpled bills and paper, with red, downward-trending charts around them, symbolizing financial stress and debt due to the high cost of living. The background is a dark, urban cityscape. On the right, a bright path of light extends from a lighthouse on the sea to a hand representing a licensed insolvency trustee reaching out to help the woman, with green, upward-trending charts in the air, symbolizing hope and a path to financial recovery.
    cost of living

Beyond the Numbers: Taking Control and Moving Forward

The statistics paint a challenging picture for Canadians struggling with the cost of living and debt. From living paycheque to paycheque with no emergency savings to the inability to plan for retirement or afford basic necessities like food and housing, the pressure is immense. Entrepreneurs and businesses are also caught in this financial squeeze, facing rising costs and increasing rates of delinquency.

But knowing the problem is the first step towards a solution. The most important takeaway is that you are not alone, and help is available. Ignoring debt won’t make it disappear; it will only grow and cause more stress.

Key Takeaways and Actionable Advice:

  • Acknowledge the Problem: The high cost of living is real, and it’s impacting almost everyone. Don’t feel ashamed or embarrassed by financial difficulties.
  • Take Proactive Steps: Start with a budget. Know where your money goes. Look for ways to reduce expenses, even small ones.
  • Prioritize Debt Repayment: Focus on high-interest debts first. If you have multiple debts, a strategy like debt avalanche or snowball can help.
  • Build Your Safety Net: Even if it’s slow, start putting money into an emergency fund. Every dollar helps create a buffer against unexpected costs.
  • Communicate, Don’t Hide: If you can’t pay your bills, talk to your creditors. They might be able to help you adjust your payments.
  • Seek Professional Help Immediately: This is perhaps the most crucial advice. A Licensed Insolvency Trustee (LIT) like Brandon Smith at Ira Smith Trustee & Receiver Inc. can provide expert, unbiased advice on all your debt options. They can explain consumer proposals, bankruptcy, and other strategies in a way that makes sense, helping you choose the best path to get rid of your debt and regain control of your financial life. This advice is completely confidential and can be the first step towards truly rebuilding your financial future.
  • Prioritize Your Well-being: Financial stress takes a heavy toll. Remember to take care of your mental and physical health. Lean on your support network and consider professional help if needed.

Cost of Living Conclusion

The path to financial freedom in Canada’s current economic climate may be challenging, but it is not impossible. With the right information, a clear plan, and professional guidance, you can overcome your cost of living and debt challenges and move towards a more secure and hopeful financial future.

You’re not alone in this. There’s a path forward, and it starts with reaching out for the right kind of help. Take that step—you deserve it. If you’re a GTA resident dealing with overwhelming debt, don’t wait for your credit situation to get worse. As a licensed insolvency trustee serving Toronto, Mississauga, Brampton, Markham, and surrounding areas, I’m here to help you understand your options.

Free consultation available:

  • No obligation to proceed
  • Complete review of your debt and credit situation
  • Clear explanation of how debt solutions affect your Equifax credit score
  • Practical next steps you can take immediately

Remember: Your current financial situation doesn’t define your future. With the right help and information, you can overcome both debt challenges and credit score problems.

As a licensed insolvency trustee serving the Greater Toronto Area, I encourage consumers and business owners to view financial difficulties not as failures but as challenges that can be addressed with proper guidance. By understanding the warning signs of insolvency and seeking professional advice early, many people and businesses can find a path forward – whether through restructuring, strategic changes, or in some cases, an orderly wind-down that protects their future opportunities.

Remember: The earlier you seek help for company insolvency concerns, the more options you’ll have.

If you or someone you know is struggling with too much debt, remember that the financial restructuring process, while complex, offers viable solutions with the right guidance. As a licensed insolvency trustee serving the Greater Toronto Area, I help entrepreneurs understand their options and find a path forward during financial challenges.

At the Ira Smith Team, we understand the financial and emotional components of debt struggles. We’ve seen how traditional approaches often fall short in today’s economic environment, so we focus on modern debt relief options that can help you avoid bankruptcy while still achieving financial freedom.

The stress of financial challenges can be overwhelming. We take the time to understand your unique situation and develop customized strategies that address both your financial needs and emotional well-being. There’s no “one-size-fits-all” approach here—your financial solution should be as unique as the challenges you’re facing.

If any of this sounds familiar and you’re serious about finding a solution, reach out to the Ira Smith Trustee & Receiver Inc. team today for a free consultation. We’re committed to helping you or your company get back on the road to healthy, stress-free operations and recover from financial difficulties. Starting Over, Starting Now.

The information provided in this blog is intended for educational purposes only. It is not intended to constitute legal, financial, or professional advice. Readers are encouraged to seek professional advice regarding their specific situations. The content should not be relied upon as a substitute for professional guidance or consultation. The author, Ira Smith Trustee & Receiver Inc., and any contributors do not assume any liability for any loss or damage.

A woman entrepreneur with their head in their hands sits on the ground, surrounded by a huge pile of crumpled bills and paper, with red, downward-trending charts around them, symbolizing financial stress and debt due to the high cost of living. The background is a dark, urban cityscape. On the right, a bright path of light extends from a lighthouse on the sea to a hand representing a licensed insolvency trustee reaching out to help the woman, with green, upward-trending charts in the air, symbolizing hope and a path to financial recovery.
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Brandon Blog Post

SMEs INSOLVENCY IN THE GTA: PROVEN STEPS TO RESCUE AND RESILIENCE FOR TORONTO AREA BUSINESSES

Running small and medium enterprises (SMEs) in the Greater Toronto Area has never been easy. However, many business owners are currently facing some of the toughest challenges in decades. Rising costs, changing customer habits, troubling macroeconomic variables and supply chain problems are putting serious pressure on companies across the GTA.

If you’re a business owner struggling to keep up with bills or watching your debt pile up, you’re not alone. More importantly, you have options that can help save your business and protect your employees’ jobs.

As a Licensed Insolvency Trustee firm that has worked with many GTA businesses over the past decades, we’ve seen companies bounce back from what seemed like impossible situations. This Brandon’s Blog will show you the warning signs to watch for, the steps you can take to protect your business, and when to seek professional help.

What Are SMEs and Why Do They Matter to the GTA?

SMEs are the backbone of Ontario’s economy. In Canada, we define these businesses by how many people they employ:

  • Small businesses: 1 to 99 employees
  • Medium-sized businesses: 100 to 499 employees
  • Large businesses: 500 or more employees

SMEs make up over 99% of all businesses in Ontario. In the GTA alone, these companies employ more than 2.5 million people. They run the restaurants where we eat, the shops where we buy clothes, the tech companies building new apps, and the manufacturing plants making products we use every day.

When SMEs struggle, entire communities feel the impact. That’s why helping these businesses survive tough times isn’t just good for individual owners – it’s essential for keeping the GTA economy strong.

The Perfect Storm: Why 2025 Is Especially Tough for GTA Businesses

Several factors are hitting GTA businesses at the same time, creating what experts call a “perfect storm” of challenges.

Rising Operating Costs

Everything costs more now. Rent in the GTA has jumped significantly over the past few years. A small retail space in downtown Toronto that cost $3,000 per month in 2022 might now cost $4,200 or more. Manufacturing businesses are paying 25-30% more for raw materials compared to two years ago.

Labour costs are also climbing. While this is good news for workers, it puts pressure on business owners who are already stretched thin. Many SMEs in the service sector have had to increase wages to attract and keep good employees.

Supply Chain Disruptions

Getting products and materials has become a major headache. A restaurant owner in Mississauga recently told me it now takes three weeks to get equipment parts that used to arrive in three days. A clothing retailer in North York said some of their popular items are backordered for months.

These delays caused by macroeconomic variables don’t just frustrate customers – they tie up cash that businesses need for other expenses. When you have to pay for inventory weeks before you can sell it, cash flow becomes a serious problem.

Changing Consumer Behaviour

Customers are spending differently than they did before. Some are more price-sensitive and shop around more. Others want everything delivered or available online. Many prefer to buy locally but expect the same convenience they get from big retailers.

For SMEs, adapting to these consumer behaviour changes while managing tight budgets is extremely challenging. A family-owned hardware store might need to build an e-commerce website and offer delivery – investments that strain already limited resources.

Economic Uncertainty

Monetary policy decisions, trying to deal with inflation, interest rate changes, a cost-of-living crisis and global trade tensions, create an uncertain business environment. This makes it harder for business owners to plan and make smart financial decisions.

A professional's hand begins to untangle a complex, tightly knotted rope made of tangled financial documents and debt symbols. The image represents the GTA small business debt crisis, with a blurred Toronto skyline in the background, symbolizing hope and a path forward.
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Warning indicators show that business insolvencies in the GTA climbed from 0.4 per 1,000 businesses in 2021 to 0.7 in 2023. While that sounds small, it represents hundreds of local businesses closing their doors because of the business debt crisis.

Source: Canadian Association of Insolvency and Restructuring Professionals (CAIRP), July 5, 2024, media release titled: “Q1 2024 Canadian Insolvency Statistics”.

The sectors seeing the most trouble include:

  • Retail businesses (especially small independent stores)
  • Restaurants and food services
  • Manufacturing companies with fewer than 50 employees
  • Construction and renovation companies
  • Personal services (salons, fitness centers, etc.)

But here’s what’s important: many of these businesses could have been saved with earlier intervention. In my practice, I’ve found that companies that seek help when they first notice problems have a much better chance of survival than those that wait until they’re facing bankruptcy.

Red Flags: Early Warning Signs Your Business Needs Help

Recognizing financial problems early gives you more options to fix them. Here are the warning signs I tell every business owner to watch for:

Cash Flow Problems

  • You’re consistently late paying suppliers or employees
  • You’re using credit cards or credit lines to pay basic operating expenses
  • You’re borrowing from one creditor to pay another
  • Your bank account balance stays low or goes negative regularly

Declining Performance

  • Sales have dropped for three months in a row
  • Profit margins are shrinking even when sales stay steady
  • You’re losing customers to competitors
  • Key employees are leaving for better opportunities

Operational Struggles

  • You can’t get trade credit from suppliers and they’re demanding cash upfront
  • Equipment is breaking down, and you can’t afford repairs
  • You’re behind on rent, utilities, or loan payments
  • Tax remittances are late or missed entirely

Personal Stress Indicators

  • You’re losing sleep worrying about the business
  • You avoid looking at financial reports
  • You’re using personal credit cards for business expenses
  • Family relationships are suffering due to business stress

If you’re experiencing several of these warning signs, it’s time to take action. The good news is that acknowledging problems is the first step toward solving them.

A professional's hand begins to untangle a complex, tightly knotted rope made of tangled financial documents and debt symbols. The image represents the GTA small business debt crisis, with a blurred Toronto skyline in the background, symbolizing hope and a path forward.
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Your Options: What Licensed Insolvency Trustees Can Do for SMEs

Many business owners think that calling a Licensed Insolvency Trustee means their company is finished. That’s not true. We have several tools that can help businesses recover and thrive.

Business Debt Solutions

Informal Arrangements: Sometimes the best solution is working directly with creditors to create payment plans everyone can live with. I’ve helped businesses negotiate extended payment terms, reduced interest rates, or even partial debt forgiveness.

Division I Proposals Under the Bankruptcy and Insolvency Act: This legal process allows businesses to offer creditors a portion of what they owe in exchange for debt forgiveness. For example, a company owing $200,000 might propose to pay $60,000 over three years, with the remaining debt eliminated.

For larger SMEs, this process can restructure significant debt while allowing the business to keep operating. The company presents a plan to creditors for reducing debt and improving operations.

Asset Protection Strategies

We can help protect valuable business assets during financial difficulties. This might include:

  • Separating personal and business assets
  • Restructuring how the business owns property or equipment
  • Creating payment priorities that protect essential operations

Cash Flow Management

Licensed Insolvency Trustees don’t just handle debt – we also provide practical advice on managing money better. This includes:

  • Creating realistic budgets and forecasts
  • Identifying unnecessary expenses to cut
  • Improving collection of accounts receivable
  • Negotiating better terms with suppliers

Real SMEs Success Stories from GTA Businesses

Let me share some examples of how early intervention saved local businesses. (Names and details have been changed to protect privacy.)

The Family Restaurant That Survived the COVID-19 Crisis

Maria and Giuseppe owned a popular Italian restaurant in Toronto. When the pandemic hit, their revenue dropped by 75%. They owed $85,000 to suppliers, were three months behind on rent, and had maxed out their credit lines.

Instead of giving up, they contacted us. We worked with their landlord to defer rent payments and negotiated payment plans with key suppliers. We also helped them apply for government relief programs they didn’t know existed.

Today, their restaurant is thriving again. They’ve paid off most of their pandemic debt and even opened a second location in Vaughan.

The Tech Company That Restructured

This company employed 35 people in developing cutting-edge technology solutions for managing business operations for companies. When their biggest customer cancelled a major contract, they faced $450,000 in debt they couldn’t pay.

We helped them file a Division I Proposal that reduced their debt to $95,000, payable over four years. This gave them breathing room to find new customers and improve their operations. They also worked on diversifying their customer base to reduce future risk.

Two years later, the company has grown and is more profitable than before their financial crisis.

A professional's hand begins to untangle a complex, tightly knotted rope made of tangled financial documents and debt symbols. The image represents the GTA small business debt crisis, with a blurred Toronto skyline in the background, symbolizing hope and a path forward.
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Building a Stronger Business: Practical Steps for SME Owners

Whether your business is struggling now or you want to prepare for future challenges, these strategies can help build resilience:

Improve Financial Management

Track Everything: Use accounting software to monitor your finances daily, not just when tax time comes around. Many problems become obvious when you look at the financial ratios and other important numbers regularly.

Create Cash Flow Forecasts: Predict your income and expenses for the next 6-12 months. This helps you spot potential problems before they become crises.

Separate Business and Personal Finances: Never mix business and personal expenses. This creates confusion and can cause serious legal problems if your business faces insolvency.

Diversify Your Revenue

Find New Customers: Don’t rely too heavily on one or two big customers. If you lose them, your entire business could be at risk.

Add New Products or Services: Look for ways to serve your existing customers better or attract new ones. A plumbing company might add drain cleaning services. A bakery might start catering events.

Explore Online Sales: Even if you’re primarily a brick-and-mortar business, having an online presence can help you reach more customers and provide additional revenue during slow periods.

Strengthen Supplier Relationships

Pay Bills on Time: Good relationships with suppliers can be a lifeline during tough times. Companies that consistently pay promptly often get better terms and more flexibility when needed.

Diversify Suppliers: Don’t depend on just one supplier for critical materials or products. Having backup options protects you from supply chain disruptions.

Negotiate Better Terms: Ask for extended payment terms, volume discounts, or seasonal adjustments that match your cash flow patterns.

Invest in Your Team

Cross-Train Employees: Make sure multiple people can handle essential tasks. This reduces the risk of operational problems when key employees leave.

Focus on Customer Service: Excellent service helps you keep customers even when competitors offer lower prices.

Plan for Succession: Have a plan for what happens if you become unable to run the business due to illness, injury, or other circumstances.

When A SME Should Call a Licensed Insolvency Trustee

Don’t wait until you’re facing bankruptcy to seek professional help. Consider calling a Licensed Insolvency Trustee if:

  • You’re using credit to pay operating expenses
  • You’re behind on tax payments or employee wages
  • Suppliers are demanding cash payments up front
  • You’re considering borrowing against personal assets to keep the business running
  • You’re losing sleep worrying about money

What to Expect from Your First Consultation

Most Licensed Insolvency Trustees offer free initial consultations. Here’s what typically happens:

Financial Review: We’ll look at your debts, assets, cash flow, and overall financial situation. Bring recent financial statements, a list of creditors, and any legal documents you’ve received.

Options Discussion: We’ll explain all available options, not just insolvency procedures. This might include debt negotiation, restructuring, or operational changes.

Action Plan: If you decide to work together, we’ll create a specific plan with clear steps and timelines.

Ongoing Support: We provide ongoing advice and support throughout the recovery process.

A professional's hand begins to untangle a complex, tightly knotted rope made of tangled financial documents and debt symbols. The image represents the GTA small business debt crisis, with a blurred Toronto skyline in the background, symbolizing hope and a path forward.
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The Importance of Acting Early For SMEs

I can’t stress this enough: the earlier you seek help, the more options you have. Businesses that wait until they’re facing immediate closure have fewer alternatives and often face more expensive solutions.

Early intervention can:

  • Preserve more jobs
  • Maintain better relationships with suppliers and customers
  • Protect personal assets
  • Reduce stress on you and your family
  • Increase the chances of business survival

Your Next SME Steps

If you’re a SME owner in the GTA facing financial challenges, don’t wait for things to get worse. Here’s what you should do:

  1. Assess Your Situation Honestly: Look at your financial statements and identify specific problems. Write down your concerns and questions.
  2. Gather Your Financial Information: Collect recent financial statements, tax returns, creditor lists, and any legal documents you’ve received.
  3. Contact a Licensed Insolvency Trustee: Schedule a consultation to discuss your options. Most initial meetings are free and confidential.
  4. Explore All Options: Don’t assume bankruptcy is your only choice. Many businesses can be saved with the right intervention.
  5. Take Action: Once you understand your options, implement a plan quickly. Delaying action usually makes problems worse.

    A professional's hand begins to untangle a complex, tightly knotted rope made of tangled financial documents and debt symbols. The image represents the GTA small business debt crisis, with a blurred Toronto skyline in the background, symbolizing hope and a path forward.
    sme

Frequently Asked Questions About SME Insolvency in the GTA

What exactly counts as an SME in Ontario?

In Canada, we classify businesses by how many people work for them. A small business has between 1 and 99 employees, while a medium-sized business employs 100 to 499 people. Companies with 500 or more workers are considered large enterprises.

This might seem like just paperwork, but it matters a lot. SMEs make up over 99% of all businesses in Ontario. In the GTA, they employ more than 2.5 million people. These are the companies you interact with every day – your local coffee shop, the accounting firm down the street, the manufacturing plant in your neighbourhood. When SMEs struggle, entire communities feel the impact.

Why are GTA businesses facing so many problems right now?

Several big challenges are hitting local businesses at the same time. Think of it like a perfect storm where everything goes wrong together.

First, costs keep going up. A small store in downtown Toronto that paid $3,000 monthly rent in 2020 might now pay over $4,000. Manufacturing businesses are paying 25-30% more for raw materials than they did two years ago.

Second, getting supplies has become a nightmare. A restaurant owner in Mississauga told me equipment parts that used to arrive in three days now take three weeks. This ties up money that businesses need for other things.

Third, customers are shopping differently. They want online ordering, fast delivery, and competitive prices. For a small business, adding these services while managing tight budgets is extremely tough.

Finally, everything feels uncertain. Interest rates, inflation, and global trade issues make it hard for business owners to plan ahead confidently.

How can I tell if my GTA business is in financial trouble?

Watch for these warning signs that I see in businesses before they call my office:

Money problems: You’re consistently late paying suppliers or staff. You’re using credit cards to cover basic expenses like rent or utilities. Your bank account stays low or goes negative regularly.

Declining sales: Revenue has dropped for three months straight. You’re losing customers to competitors. Profit margins are shrinking even when sales stay the same.

Operational issues: Suppliers want cash upfront instead of giving you credit terms. Equipment breaks down, and you can’t afford repairs. You’re behind on rent, loan payments, or tax remittances.

Personal stress: You’re losing sleep worrying about money. You avoid looking at financial reports because they’re too depressing. You’re using personal credit cards for business expenses.

If several of these sound familiar, it’s time to get professional help. The good news is that recognizing problems early gives you more options to fix them.

What can a Licensed Insolvency Trustee do for my business?

Many business owners think calling me means their company is finished. That’s completely wrong. I have several tools that can help businesses recover and even grow stronger.

Debt solutions: I can work with your creditors to create payment plans everyone can accept. Sometimes this means extending payment terms, reducing interest rates, or even getting partial debt forgiveness. For larger debts, we might use formal proposals under bankruptcy law that legally reduce what you owe.

Asset protection: I help separate your personal and business assets so your family home isn’t at risk if the business struggles. We can also restructure how your company owns equipment or property to better protect valuable assets.

Cash flow help: Beyond handling debt, I provide practical advice on managing money better. This includes creating realistic budgets, identifying expenses to cut, improving how you collect money from customers, and negotiating better terms with suppliers.

The key is getting help early when you have more options available.

What steps can I take right now to protect my SME business?

Whether your business is struggling or you want to prepare for future challenges, these strategies help build strength:

Get your finances organized: Use accounting software to track money daily, not just at tax time. Create cash flow forecasts for the next 6-12 months to spot problems early. Never mix business and personal expenses – this creates confusion and legal problems.

Don’t put all your eggs in one basket: Find new customers so you’re not too dependent on one or two big accounts. Add new products or services that serve your existing customers better. Even traditional businesses benefit from having some online presence.

Build strong supplier relationships: Pay bills on time to maintain good relationships. Have backup suppliers for critical materials. Negotiate payment terms that match your cash flow patterns.

Invest in your team: Cross-train employees so multiple people can handle essential tasks. Focus on excellent customer service to keep customers even when competitors offer lower prices. Have a plan for what happens if you can’t run the business due to illness or other circumstances.

When should I call a Licensed Insolvency Trustee for help?

Don’t wait until you’re facing bankruptcy. Contact a professional if:

  • You’re using credit to pay basic operating expenses
  • You’re behind on tax payments or employee wages
  • Suppliers are demanding cash payments instead of giving you credit
  • You’re thinking about borrowing against your house to keep the business running
  • You’re losing sleep worrying about money problems

The earlier you get help, the more options you have. Businesses that wait until the last minute often face more expensive solutions with fewer choices.

What happens during my first meeting with you?

Most Licensed Insolvency Trustees, including myself, offer free initial consultations. Here’s what typically happens:

We review your finances: I’ll look at your debts, assets, cash flow, and overall financial situation. Bring recent financial statements, a list of who you owe money to, and any legal documents you’ve received.

We discuss all your options: I’ll explain everything available to you, not just bankruptcy procedures. This might include debt negotiation, business restructuring, or operational changes that could solve your problems.

We create an action plan: If you decide to work together, we’ll make a specific plan with clear steps and realistic timelines.

You get ongoing support: I don’t just file paperwork and disappear. Many trustees provide advice and support throughout your recovery process.

Everything we discuss is completely confidential. My job is to find the best path forward for your specific situation.

How much does it cost to work with a Licensed Insolvency Trustee?

The first consultation is always free. For ongoing services, costs depend on what your business needs. Generally, we bill based on hourly fees. Formal proposals under bankruptcy law have to be approved by the court. More often than not, it is paid from money you would have paid to creditors anyway.

Many business owners are surprised to learn that professional help often costs less than continuing to struggle alone. When we successfully reduce your debt or improve your cash flow, the savings usually far exceed any fees. The fees are even more reasonable when the restructuring Proposal calls for your unsecured creditors to pay the fees for your SME restructuring!

I always explain all costs upfront so there are no surprises. The goal is to help your business become profitable again, not add to your financial burden.

Why is acting quickly so important for GTA businesses?

I can’t stress this enough: the sooner you seek help, the more we can do for your business. Companies that contact me when they first notice problems have many more options than those who wait until they’re facing immediate closure.

Early action can:

  • Save more jobs for your employees
  • Preserve better relationships with suppliers and customers
  • Protect your personal assets like your family home
  • Reduce stress on you and your family
  • Dramatically increase your chances of business survival

    A professional's hand begins to untangle a complex, tightly knotted rope made of tangled financial documents and debt symbols. The image represents the GTA small business debt crisis, with a blurred Toronto skyline in the background, symbolizing hope and a path forward.
    sme

Final SME Thoughts

Running a SME business in the GTA isn’t easy, but thousands of SME owners successfully navigate financial challenges every year. The key is recognizing problems early and getting professional help when you need it.

As a Licensed Insolvency Trustee with extensive experience helping GTA SME businesses, I’ve seen companies recover from seemingly impossible situations. With the right approach, your business can not only survive current challenges but also emerge stronger and more profitable.

Remember, seeking help isn’t a sign of failure – it’s a smart business decision that can save your company, protect your employees’ jobs, and preserve your investment in your business.

If you’re ready to take the next step, contact a Licensed Insolvency Trustee today. Your business and your peace of mind are worth the phone call.

If your business is facing financial challenges, don’t wait until it’s too late. Early intervention provides more options and better outcomes. Contact Ira Smith Trustee & Receiver Inc. today to discuss your situation confidentially and explore your options.

You’re not alone in this. There’s a path forward, and it starts with reaching out for the right kind of help. Take that step—you deserve it. If you’re a GTA resident dealing with an overwhelming debt crisis, don’t wait for your credit situation to get worse. As a licensed insolvency trustee serving Toronto, Mississauga, Brampton, Markham, and surrounding areas, I’m here to help you understand your options.

Free consultation available:

  • No obligation to proceed
  • Complete review of your Canadian business debt and credit situation
  • Practical next steps you can take immediately

Remember: Your current financial situation doesn’t define your future. With the right help and information, you can overcome both a debt crisis and credit score problems.

As a licensed insolvency trustee in the Greater Toronto Area, I tell consumers and business owners to see financial problems not as failures but as challenges. Proper guidance can solve them. By knowing the warning signs of insolvency and getting professional advice early, many people and businesses find a way forward. They can restructure, make strategic changes, or wind down in an orderly way that protects future chances.

Remember: The earlier you seek help for company insolvency concerns, the more options you’ll have.

If you or someone you know is struggling with too much debt, remember that the financial restructuring process, while complex, offers viable solutions with the right guidance. As a licensed insolvency trustee serving the Greater Toronto Area, I help Canadian entrepreneurs understand their options and find a path forward during financial challenges.

At the Ira Smith Team, we understand the financial and emotional components of a debt crisis. We’ve seen how traditional approaches often fall short in today’s economic environment, so we focus on modern debt relief options that can help you avoid bankruptcy while still achieving financial freedom.

The stress of financial challenges can be overwhelming. We take the time to understand your unique situation and develop customized strategies that address both your financial needs and emotional well-being. There’s no “one-size-fits-all” approach here—your financial solution should be as unique as the challenges you’re facing.

If any of this sounds familiar and you’re serious about finding a solution, reach out to the Ira Smith Trustee & Receiver Inc. team today for a free consultation. We’re committed to helping you or your Canadian company get back on the road to healthy, stress-free operations and recover from financial difficulties. Starting Over, Starting Now.

The information provided in this blog is intended for educational purposes only. It is not intended to constitute legal, financial, or professional advice. Readers are encouraged to seek professional advice regarding their specific situations. The content should not be relied upon as a substitute for professional guidance or consultation. The author, Ira Smith Trustee & Receiver Inc., and any contributors do not assume any liability for any loss or damage.

A professional's hand begins to untangle a complex, tightly knotted rope made of tangled financial documents and debt symbols. The image represents the GTA small business debt crisis, with a blurred Toronto skyline in the background, symbolizing hope and a path forward.
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Brandon Blog Post

CANADA IN RECESSION: WILL THE ECONOMY FALL INTO A GREAT DEPRESSION?

canada in recession
canada in recession

The Ira Smith Trustee Team 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 the audio version of this Canada in recession Brandon’s Blog, please scroll down to the bottom and click on the podcast.

Canada in recession introduction

It’s official. C.D. Howe Institute has declared that Canada in recession because COVID-19 is now a reality. Canada’s economy is in a recession. Nouriel Roubini is a world-known economist and a professor of economics at New York University’s Stern School of Business. He accurately forecasted the credit crisis of 2007-2008. He has some stark current thoughts on just how bad the Canadian economy can go. He has written and talked at length lately about the components that could take Canada in recession to a depression.

Canada in recession – When will there be a recovery?

Dr. Roubini sees three possible scenarios for how things are going to develop in the global economy. He says:

  1. His baseline assumption for North America this year is one of a U-shape recovery.
  2. The equity markets in the US are pricing in a V-shaped recovery with very strong growth in the second half of the year into next year.
  3. There is a risk of a greater depression for the rest of the decade but not for this year.

He believes there are forces that are going to lead Canada into a depression. His view is that there is going to be a U-shape recovery because this is a global shock. Both households and corporations will have to spend less and save more. Precautionary savings are going to go higher. Income is going to be lower. This will translate into less business capital spending. He says there will be a global investment slump because of a global savings glut.

That is a recipe for a very anemic recovery.

Could external forces push the US and Canada in recession into a depression?

The question is how long and how deeply related to this crisis the recession will be? Although in the short term there is Canada in recession, later in the decade is when there will be a price to be paid. That potential for depression and deep slump happens later in the decade as a result of fear and panic leading people and companies to save more and spend less.

So, what can governments do to stave off a worse depression? Dr. Roubini is very pessimistic and believes a greater depression will happen sometime later in the decade. He believes it is only a matter of when and not whether it will happen.

He describes the North American economy as a train wreck in slow-motion. It won’t happen this year but there are fundamental forces like debt and deficits leading people and businesses to insolvency. There will be an inability to fund liabilities coming from demographics that become worse. There will be deflation that is going to make more people insolvent. The need for quantitative easing will debase currencies. The need will be because of the large fiscal deficits that eventually are going to lead to inflation by the middle of the decade.

There is also digital disruption because manufacturers will have to substitute labour with the capital in equipment and technology because businesses will have to cut costs to save more and spend less. That implies more automation and more robotics; especially if we are going to try to lessen our dependence on China for goods.

We are in the process of a democracy backlash. People who are scared are becoming more populist and will try to elect authoritarian populist governments to come to power all over the world. Relations with China will probably become colder because of the coronavirus related anger towards China. It is going to get very ugly.

There will be digital rivalries including cyber warfare. It will get worse over the next few years. This is the way warfare is going to be. It will not be the conventional words the enemies of the Western Hemisphere be it China, Russia, Iran or North Korea. They cannot fight the USA using conventional weapons.

Events in the 2016 US election and the COVID-19 pandemic in 2020 shows our enemies that they can use cyber and biological war to successfully weaken the North American economy and create societal problems. They will continue to interfere with the US democratic process and use man-made disasters. Pandemics and global climate change are two things they can weaponize to try to destabilize our way of life.

This has the potential to make us wind up into a great depression. Government fiscal policy cannot do much about it. That is not the tool we need to fight these new threats.

What about internal forces pushing the US and Canada in recession into a depression?

One huge issue is the debt level; both personal debt and sovereign. We are in way over our heads. We were before this crisis. In terms of how we get out of it is there a natural path that would resolve it? It doesn’t seem clear right now because governments are having to spend trillions of dollars to keep their economies afloat during the coronavirus pandemic. What has kept things in check prior to the pandemic is that interest rates were close to zero, if not negative, like in Europe and Japan. The current economic environment is going to make it impossible for governments to change the historically low-interest rates for the foreseeable future.

I have written many times before discussing different issues relating to record high Canadian household debt levels. The debt levels are the single most internal reason why Canada in recession could become Canada in depression.

Canada in recession summary

I don’t mean to be pessimistic when talking about Canada in recession. However, today, I just don’t see any silver lining. I am sure there is one, I just can’t see it right now.

I hope you have found Canada in recession Brandon’s Blog interesting and helpful. The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

We all must help each other to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Families are literally separated from each other. We look forward to the time when life can return to something near to typical and we can all be together once again.

Ira Smith Trustee & Receiver Inc. has constantly used clean, safe and secure ways in our professional firm and we continue to do so.

Income, revenue and cash flow shortages are critical issues facing entrepreneurs, their companies and individual Canadians. This is especially true these days.

If anyone needs our assistance for debt relief Canada COVID-19, or you just need some answers for questions that are bothering you, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

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

 

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Brandon Blog Post

DO BANK OF CANADA INTEREST RATE HIKE DATES AFFECT YOUR MONETARY POLICY?

Bank of Canada interest rate hike dates: Introduction

I have recently written blogs on debt help and signs you need bankruptcy help. I have ended recent blogs with a question: “Are you worried that the future interest rate hikes will make presently affordable commitments entirely unmanageable?”. So, I thought I would write this blog on Canada interest rate hike dates and what it all might mean in 2019.

Bank of Canada interest rate hike dates

The Bank of Canada (BoC) scheduled dates for the interest rate announcements for 2019 are as follows:

  • January 9
  • March 6
  • April 24
  • May 29
  • July 10
  • September 4
  • October 30
  • December 4

Bank of Canada interest rate hike dates: 2018

In 2018, it was expected that the BoC would raise interest rates slowly towards the end of 2018 and into 2019. The BoC has actually hiked its trendsetting rate of interest, which affects borrowing expenses across the economic climate, five times since the mid-2017, up from a reduced amount of 0.5 percent. The BoC interest rate stands at 1.75%. It was raised to that level in October 2018 and has not risen since.

Bank of Canada interest rate hike dates: 2019 issues

So the BoC on March 6, 2019, decided to keep its target for the overnight rate of 1.75%. Let me explain the main reasons why.

First, there is a slowdown in the worldwide economic climate. It has actually been extra obvious and more widespread than what they were preparing for. It is much more obvious and a lot more widespread than what the BoC was projecting as recently as January 2019! The higher adverse impact on the global economic situation affected their choice.

Second, global trade stress and unpredictability are weighing heavily on self-confidence and economic activity. There is tension worldwide on the trade front between several different scenarios, including Brexit and nations. This results in weakened consumer self-confidence and the confidence of the total worldwide economy. If the China/USA trade war is settled, the world economic scene might improve a bit.

Domestically in Canada, there are reasons they required to keep the BoC rate where it was:

  1. Exports fell short of expectations.
  2. Business investment did not reach the anticipated level.
  3. Consumer spending was weak.
  4. The housing market was soft.

Consumer spending is a big part of GDP and the cost of living in Canada. As well it has a huge influence on the Canadian economy. The Canadian real estate market is a high ticket item and there are plenty of industries that are affected by and depend upon a vibrant housing market. Each of those measures was either short of expectations or soft on its performance.

Based on both these worldwide and made in Canada influences that I have pointed out, the BoC determined they were going to keep their interest rate and not hike it. As recently as October 2018 the financial press was reporting that rates will gradually be climbing throughout 2019. Increased unpredictability is now introduced on the timing of future rate increases.

What about the rest of 2019

We might now go all of 2019 without any price rise. It depends on future occasions. I believe that there are four main variables to watch:

Core inflation continues to be near 2 percent. The Canadian consumer price index reduced to 1.4 percent in January, greatly as a result of lower oil prices. The BoC expects the cost of living index to be somewhat below the 2 percent target for the majority of 2019, reflecting the influence of short-lived variables, including the drag from reduced energy prices and a bigger output gap.

We will certainly see exactly how some of these variables may transform between now and the spring. For the July and succeeding rate statement dates, we will certainly have to see what the spring real estate market looks like. As I stated above, the real estate market is a large driver of both housing spending as well as consumer spending.

What it means for you

The reality is that the BoC overnight rate holding firm is great information if you were going to be buying a house this year. Five year fixed mortgage rates have actually declined somewhat in 2019.

If you have a variable rate home mortgage or line of credit/home equity credit line, the rate hold is likewise excellent news for you.

What about you?

Is the tension, stress, anxiety, and pain of your debt negatively influencing your health and wellness?

If so, call the Ira Smith Team today. We have years as well as generations of experience aiding individuals and companies needing financial restructuring. As a licensed insolvency trustee, we are the only professionals accredited and followed by the Federal government to provide debt restructuring options.

Call the Ira Smith Team today to make certain that we can begin aiding you. We will rapidly return you right into a healthy and balanced worry-free life. We can develop a debt settlement strategy simply for you to prevent bankruptcy, where we can also make the interest clock stop ticking away at you. By doing this, all your payments go only against the principal balance owing.

You can have a no-cost appointment for us to gather the necessary information to advise you on how to fix your debt difficulties. We can end your pain so that you will begin your clean fresh start, Starting Over Starting Now.

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Brandon Blog Post

DEBT CONSOLIDATION: DEBT CONSOLIDATION LOAN MAY START PLAYING HARD TO GET

 

Debt consolidation

Debt consolidation is a form of debt refinancing that entails taking out one loan to pay off many others. This commonly refers to a personal finance process

Introduction

On November 16, 2018, the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) issued a press release on the state of consumer insolvencies in Canada. Hidden in the information was data which leads me to believe that debt consolidation may be tougher in 2019 and certainly in 2020.

A perfect storm is brewing

A historically low rate of interest and accessibility to credit have enabled some Canadians to stay up to date with debt and debt payments that would otherwise have gone into default. Interest rates are now rising and it is expected that the Bank of Canada will continue to raise its benchmark rate into 2019. Canadian household debt is on average at its highest level ever and is forecast to continue to rise. Rising household debt combined with rising interest rates is not a good combination.

Until now, Canadian real estate values have continued to rise, so consumers have been able to combine unsecured credit card and other debt into new mortgage or home equity line of credit debt secured by Canadian real estate. However, times have changed. Effective January 1, 2018, a new mortgage stress test came into effect. We described it in our blog “CANADA MORTGAGE STRESS TEST: WE EXPOSE THE SECRET TO TURN YOU FROM ZERO TO HERO”.

The mortgage stress test has resulted in one of its prime goals; a noticeable downturn in new mortgage loans. The second result is a slowing down of the runaway real estate markets in Vancouver and Toronto. If Canadian household debt continues to rise, interest rates keep rising making debt payments tougher and Canadians can no longer combine their unsecured debts by taking out a new loan by borrowing against their homes, debt defaults are going to rise.

That is why I say that debt consolidation loans may start playing hard to get.

The important relationships to consider

Below is a chart displayed in the CAIRP press release which I have reproduced here.debt consolidation 3

 

CAIRP came to some interesting conclusions about interest rates and consumer insolvencies, based on the trends shown in these charts. However, I believe they overlooked what I think is the central issue.

In the top chart, it shows that insolvency filings increased in the 2009-2010 years. CAIRP surmised that there was a lag between the time interest rates rose in the years 2006 through 2008 and the increased filings. This is true. However, the increase in filings mirrors the increase in unemployment in the 2009-2010 period. My personal view is that the more important finding is that the unemployment rate lagged the interest rate increase and it is the increase in the unemployment rate that produced a higher level of insolvencies.

With higher interest rates, corporations are paying more on their debt. Corporations want to show a steady increase in their profits year over year. If debt costs rise, companies have to find other costs to save. One cost that can be reduced in the short-term is labour costs. The forecast shows that as employees are terminated, the unemployment rate rises. Not everyone can find new work in the same time frame. This leads to increased consumer insolvency filings. In my view, the unemployment rate is a more important relationship to consumer insolvency filings.

Looking at 2019 and 2020

The bottom chart shows the relationship between household debt to income and the inflation rate. As you can see, the household debt to income ratio has kept a steady climb in 1996 through 2017 years. This steady climb has continued in 2018 and is forecast to rise even more in 2019 and 2020. The forecast also shows that inflation will nudge up to the 3% rate in 2020. So prices are expected to rise with inflation, and the household debt to income ratio is expected to rise also. This will put more pressure on Canadians trying to keep up with their debt payments.

The upper chart shows us that in 2019-2020, the forecast is that GDP stays flat, while interest rates continue to rise. In the same time frame, the downward trend in the unemployment rate bottoms out and begins to rise. Again, more unemployment and higher interest rates lead to problems for people trying to pay off debts. If you agree with my hypothesis that Canadians won’t be able to merge debt by borrowing more against their homes, this will lead to more financial problems and presumably an increase in consumer insolvency filings.

What you can do now

All is not doom and gloom. There are many things a person with a lot of debt can do now before things get out of control. There are many things that you can do right now to avoid a disaster down the road. My 5 steps for anyone who wants to resolve debt issues now are:

  1. Review your household budget now and cut spending on “wants” vs. “needs”. If you don’t have a household budget, develop a realistic one NOW!
  2. Rework the budget so that you spend less each month than you are currently spending. Look for ways to economize. Use that extra cash to paying down debt.
  3. Start paying more than the minimum monthly payment on your credit card and other unsecured debt. The more you can pay, the faster you can pay it off.
  4. Pay down the debt with the highest interest rate first. The less you pay in interest the better. That means more is going to pay down the principal debt.
  5. Perhaps you need to consider taking on a part-time extra gig to bring in more income.ira smith trustee

What if I can’t pay off my debts?

For Canadians that discover themselves not able to handle their debt on their own, there is a range of alternatives to take into consideration:

  • striking a deal with each of your major unsecured creditors through an informal debt settlement negotiation;
  • don’t give up on trying to combine all unsecured financial debts into one regular monthly payment;
  • a more formal debt settlement strategy with a consumer proposal; or
  • bankruptcy.

Identifying which choice is most appropriate depends upon a person’s scenarios as well as their unique asset and liability structure.

Debt consolidation: How we can help you

Licensed Insolvency Trustees (formerly called bankruptcy trustees) are the only experts accredited, licensed and supervised by the federal government to handle debt restructuring. As a licensed insolvency trustee, our personalized strategy will assist you to recognize all of your alternatives. The alternative you pick based on our recommendations will take away the stress and pain you are feeling because of your debt problems.

The Ira Smith Team has decades and generations of experience people and companies in financial trouble. Whether it is a consumer proposal debt settlement plan, a larger personal or corporate restructuring proposal debt settlement plan, or as a last resort, bankruptcy, we have the experience.

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 front door. You’re simply one phone call away from taking the necessary steps to get back to leading a healthy, balanced hassle-free life. Call us today for your free consultation.

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Brandon Blog Post

ANNUAL COST OF LIVING: WHY EVERYTHING RISES BUT YOUR SALARY

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annual cost of living

Annual cost of living: Introduction

We all read the headlines. The annual cost of living is rising, interest rates are rising, house prices are rising, food prices are rising, everything is rising; everything except for our paycheques. How can Canadians expect to keep up with their financial obligations when their paycheques are the only things that seem to be frozen in time?

Annual cost of living: The Canadian consumer price index

According to Statistics Canada, the consumer price index is:

“…an indicator of changes in consumer prices experienced by Canadians. It is obtained by comparing, over time, the cost of a fixed basket of goods and services purchased by consumers.”

Statistics Canada measures the consumer price index against the year 2002. So as the base year, the 2002 consumer price index is the 100% level. The consumer price index has risen steadily every year since then. The annual average Canadian consumer price index for 2017 was 130.4%. The January 2018 Canadian consumer price index was up 1.7% as compared to January 2017. So, as you can see, up is the only direction our expenses go.

Annual cost of living: Frozen salaries breed discontent

This situation has created a great deal of dissatisfaction among employees. According to a poll conducted by Indeed (a major world-wide job hunting site):

  • 83% of Canadians are dissatisfied with the pay they’re receiving
  • More than 50% of employed Canadians are definitely going to ask for a raise this year
  • “There’s no money in the budget” is the top reason for why requests for a raise are rejected, accounting for 63% of rejections (women hear this excuse far more often than men — 77% of the time, compared to 54% for men
  • The average employee plans to ask for a raise of nearly $12,000, though 23% said they wanted a raise of $16,000 or more (Indeed cautions that when asking for a raise to do your research into the current pay scales for your job)

Annual cost of living: Unemployment is down and salaries are stagnant

Even though Canada has added 423,000 jobs over the past year and the unemployment rate has fallen to 5.7% (the lowest since 1976), salaries haven’t kept up. It seems that employers have gotten away with it by hiring temporary and/or contract workers. So, while your cost of living increases, your salary doesn’t.

Annual cost of living: What happens when the rising costs force you to go deeper into debt?

We wish you luck in getting your pay raise! But, if you’re one of the many Canadians who can’t keep up with your bills now and are feeling that pain, the Ira Smith Team can help.

Debt won’t eliminate itself. You need a professional trustee who understands your pain and can explain all of your options and come up with a solid financial plan for moving forward Starting Over, Starting Now. Give us a call today and book an appointment for a free, no obligation consultation. You’ll be happy you did!

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annual cost of living
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Brandon Blog Post

INTEREST RATES IN CANADA: ARE YOU WORRIED THAT HIGHER INTEREST RATES WILL CAUSE YOU UNDUE FINANCIAL HARDSHIP POSSIBLY CAUSING BANKRUPTCY

bank interest rates canada

Interest rates: Introduction

Canadians have been on a borrowing binge due in large part to very low rates. But, the tide is beginning to change and interest rates, although still low, are beginning to creep up. This rise in rates is making many Canadians very nervous. For some, it could cause serious financial hardship.

Interest rates: The threat of rising interest rates

Forum Research Inc. conducted a survey after the Bank of Canada raised rates in September and the results are quite interesting:

  • 60% of young people are at least somewhat concerned by the prospect of rising rates
  • Over 50% of Canadians think that rising rates will negatively impact their personal finances
  • 35% of Millennials aged 18 to 34 have no savings at all
  • Only 26% have an emergency fund
  • 12% expressed concern that more rate hikes were on the way and that the impact would be extremely negative

Interest rates: “It was almost like money was free”

In theory, higher interest rates should provide an incentive for Canadians to save more, but the long period with low rates have taken their toll on many. “Rates were so low for so long, it was almost like money was free,” said Forum Research president Lorne Bozinoff in an interview. “Some may have overextended themselves during that time, thinking rates will never go up.”

Interest rates: How will you cope with higher interest rates?

The question now is how will Canadians cope with higher rates? “Some households might not be able to afford an increase,” says Frances Donald, senior economist with Manulife Asset Management. “And this is where we can see defaults, first on auto loans and then on housing.”

Interest rates: Are you worried about defaulting?

Are you worried about defaulting on your loans or mortgage? Are higher rates causing you financial hardship? There’s no time to waste. Contact Ira Smith Trustee & Receiver Inc. today.

We approach every file with the attitude that your financial problems can be solved given immediate action and the right plan. Together we will explore with you all the bankruptcy alternatives available to you. I know that we can help you get back on solid financial footing, the same way we have helped many others just like you, Starting Over, Starting Now.3bestaward

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Brandon Blog Post

How Much Interest Am I Paying Every Month? Read The Bizarre Truth Here!

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How Much Interest Am I Paying Every Month?: Introduction

From my experience, how much interest am I paying every month is a question that nobody asks themselves. We’ve become a society based on credit. We have multiple credit cards, lines of credit, mortgages, car loans, student loans

If I asked you how much interest you were paying each month I’d be willing to bet that not a single person could give me a correct answer. A monthly statement arrives either in the mail or electronically or an automatic payment comes out of your bank account or billed to your credit card. If you’re like most people the two things you see on a statement are the amount owing and the due date.

How Much Interest Am I Paying Every Month?: Start With Credit Cards

I think you’d be totally shocked at the amount of interest you’re paying each month, especially on high interest debt like credit cards. According to Capital Direct if you carry a balance of $8,000 on your credit card:

  • Your statement will show a minimum payment of $240. That may not seem like a big deal but did you know that if you pay the monthly minimum each month at an interest rate of 18.9%, it will take you 4 years to pay off the debt?
  • During this period you will pay $3,461 in interest charges.
  • The $8,000 debt will end up costing you $11,461.

How Much Interest Am I Paying Every Month?: How You Can Find Out

If you look at your credit card statement there will be a section that looks like this:

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This is the area of your credit card statement that everyone ignores. By focusing on this area, it will allow you to calculate the amount and answer the question “how much interest do I pay every month”

How Much Interest Am I Paying Every Month?: The Bizarre Truth

According to TransUnion:

  • Credit card delinquency rates jumped 14% year-over-year from 1.81% in the first quarter of 2015 to 2.06% in the first quarter of 2016.
  • Subprime borrowing is up. Subprime borrowers pay a higher interest rate because they have a poor credit history.
  • The average monthly balance for subprime credit card borrowers rose 5.7% to $6,601 in the first quarter.

How Much Interest Am I Paying Every Month?: What to do if you have too much high interest debt

Don’t get trapped in the cycle of high interest debt. The Ira Smith Team is here to help. With immediate action and a solid financial plan you can get escape the high interest debt cycle Starting Over, Starting Now. Give us a call today. You’ll be happy you did.

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THE MODERN RULES OF SENIORS CARRYING DEBT

seniors, seniors carrying debt, seniors in debt, debt, auto loans, bank loans, lines of credit, credit card debt, interest rates, Ira Smith Trustee & Receiver Inc., retirees, starting over starting now, stress of carrying debtSeniors carrying debt becomes the norm

Many Canadian seniors are struggling financially in what should have been a carefree retirement. We’ve done a series of blogs about seniors in debt:

Seniors carrying debt is not going away

However, this problem is not going away. In fact, seniors have now become so accustomed to living with debt that they are using it to finance their lifestyles instead of downsizing or cutting back on expenses. For the time being, seniors are not feeling the stress of carrying debt. Given that retirees and working seniors carrying debt are less likely to be taking steps to accelerate their debt repayment, the problem may very well get worse.

Seniors carrying debt not bothered by it

According to a survey conducted by Equifax for HomEquity Bank:

  • A number of Canadians over 75 are still dealing with a mortgage and their numbers are rising
  • 11.3 million Canadians 55 or older have some sort of debt. Of that figure, about 1.87 million are carrying a mortgage which is up 20% in two years
  • Outstanding mortgage balances are up for every segment of seniors, which for the purposes of the survey was anyone over the age of 55
  • In the 75-and-over category, the average senior with a mortgage had $133,944 outstanding, up 11% from two years ago
  • The number of seniors carrying debt is also increasing in other credit categories, such as auto loans, bank loans, lines of credit and credit card debt

Yvonne Ziomecki, senior vice-president of marketing and sales of HomEquity Bank states, “A lot of people I talk to, they just don’t really care. This is how they manage their finances and they are perfectly comfortable with it”.

Seniors carrying debt need to take action now

This can be a recipe for disaster if interest rates rise. Where is the extra income going to come from? If you’re one of the seniors carrying debt, or anyone else who is relying on credit to support their lifestyle, give the Ira Smith Trustee & Receiver Inc. Team a call before interest rates rise and while you still have options. With immediate action and the right plan we can solve your financial problems and set you on a path to debt free and stress free living Starting Over, Starting Now.

Call a Trustee Now!