As parents, you want to give your kids every advantage, but how much is too much? And do you really need to splurge on non-necessities if it’s putting a financial hardship on the family? It’s ironic to hear rich and celebrity parents say that they’re really trying to give their children a normal upbringing, without over-the-top excess; while on the other side of the fence, average, working families are making birthday parties that cost thousands of dollars. Does your child’s birthday party really have to feature pony rides, live entertainment and loot bags that cost a fortune? Clearly the days of BBQ and “pin the tail on the donkey” have gone the way of the dodo.
Financial hardship: Strain on the family budget
Extracurricular activities can also put a strain on the family budget. How many extracurricular activities are your kids participating in? And what are these activities costing you? According to an Ipsos poll commissioned by Global News:
Canadian parents spent an average of $1,120 to enroll their children in extracurricular, community and sports activities during the last school year
For some, the cost of a busy after-school schedule was even higher, with nearly one in 10 parents shelling out over $2,000
Many families are overstretched to pay for it all, with over half of parents saying the cost of kids activities puts a strain on family finances
Nearly a third of respondents who were Gen X parents (between the ages of 35 and 54) said they had taken on debt to pay for things like dues, fees and equipment.
If your child is in a competitive dance program, costumes alone can cost thousands of dollars. Hockey is extremely expensive and the costs of competitive hockey are not for the faint of heart.
Financial hardship: Be realistic
Parents, you have to be realistic about what you can or can’t afford. Going into debt for birthday parties and after school activities makes no sense. Scale back. Make a birthday party that makes financial sense for the family, not the neighbours. Choose an after school activity with your child that they’ll enjoy and you can afford. Not only will you save a lot of money, but you’ll have some money to put away for your child’s education – a better investment in their future than a birthday party or extracurricular activities.
If you’re already overextended and feeling the pinch of financial hardship, don’t wait until the situation becomes dire. Contact the Ira Smith Trustee Team as soon as possible. We can help you manage debt and put you on a path to debt free living Starting Over, Starting Now. Make an appointment today for a free, no cost, no obligation consultation. You’ll be glad that you did.
When it involves money, timing is everything. Your business is getting closer to the top of its banking line and your banker is asking for more information than usual. This is where your heart starts pounding faster and your stress level increases. This is the moment you can seize to right size your business or else it very well may fail. The purpose of my blog is to give you business debt advice Canada.
Business debt advice Canada: Relationships can become strained
Relationships can become strained with your lender and suppliers when business debts are mounting and your company is facing acash crisis. However, there are actions a borrower can take to prevent calamity. Reassuringly, most of the time, lenders would rather support you if you have a viable business plan to correct the situation going forward, and not putting you out of business.
I hope the suggestions below shows you that you should look at this as an opportunity to fix your business. I have found that in trying times when a company has mounting debts and insufficient cash, there is no replacement forgood management.
A solidbusiness plan showing how the company will turn itself around is what your lender wants to see. Communication with your lender and your suppliers is key. Do not hide from the problem. Face it head on. If your business plan shows you can turn things around, you will feel like you are dealing from a sound platform and not just running scared.
Business debt advice Canada: Take emotion out of the equation
These situations generally become more tense before they become better. You, your lender and your unpaid suppliers all want the same thing. You all want the company to be successful and profitable, and to be able to pay all of its bills in full when due. Your lender and suppliers are not out to get you. However, if they do not: (i) know that you have solidbusiness turnaround plan; and (ii) receive ongoing information to show what steps you are taking to fix the problems, they will have no choice but to turn off the tap.
I have unfortunately seen too many companies fail in theirbusiness restructuring efforts due to lack of communication. The turnaround plan may have been sound, but nobody knew. This only creates ill will among the stakeholders and a result that nobody wants.
Business debt advice Canada: Informal and formal turnaround options
I must preface this section by saying do not be afraid to consult with alicensed insolvency trustee (LIT) for business debt advisory services. Trustees’ training makes them expert in assessing troubled business situations and implementing turnaround steps. A LIT does a lot more than just bankruptcy.
You will find it helpful to have a professional trustee assist you in developing your turnaround business plan, implementing it and keeping management focussed and accountable. You will also find it very helpful to have a LIT go with you for meetings with your banker; there will be many of those!
Business debt advice Canada: Troubleshooting
Fully understanding the full current status of the company showing signs of financial trouble is key. Things that I focus on early on when looking at troubled companies are:
What are all the different assets of the company and where are they located?
amounts owing to lender(s) and other secured creditors
amounts owing to employees; and
amounts owing to unsecured trade suppliers
What is the status of premises lease(s) for both remaining term and cost?
Is the cost of the leased premises above or below current market value?
Has anyone personally guaranteed bank debt, the landlord or any other creditor that would affect turnaround decisions to be taken?
Has a current crisiscash-flow statement and turnaround business plan been developed and tested for reasonableness?
What are the causes of the company’s current financial problems and how likely are those causes to recur?
This list is not meant to be exhaustive. No doubt other questions will arise as answers are found for these first questions. However, this is the information I first want to get before embarking on developing a restructuring plan.
Business debt advice Canada: Informal restructuring and turnaround
If the business problems have been identified early and have not been allowed to fester, then aninformal restructuring may very well work. Perhaps all that will be needed is some accommodation from the lender both in time and money. Banks are quite willing to enter into a forbearance agreement with their corporate client allowing the time (and sometimes more money) to see if the turnaround plan will work.
The bank would rather have a successful turnaround than shut you down. The bank needs to know that management has the bench strength to pull off the restructuring. If not, they will expect you to have a lawyer experienced in turnarounds and a LIT active on your team.
Companies that have relatively few trade suppliers may also be able to work out a restructuring of their unsecured debt. The fewer people you have to talk to and get onside, the higher the likelihood of success. Of course, the trust developed from earlier dealings is very important. If there is no trust, or if there are just too many suppliers, an informal restructuring will not work with them.
In a formal restructuring, I still go through the checklist I have identified above of issues to look into.
Under the BIA, the restructuring section is Part I Division III of the BIA
If a restructuring under the BIA does not receive the necessary creditor AND court approval, the company will automatically be bankrupt
In a formal restructuring, the company stays in control of its assets and business operations
A formal restructuring invokes a stay of proceedings so no party can begin or continue litigation or enforcement action against the company
A company needs to have at least $5 million in debt to restructure under the CCAA
A BIA restructuring will be less costly than a CCAA restructuring because the company does not have to go to Court for approval every time it wishes to do something
The term “bankruptcy protection” in Canada, refers to a formal restructuring under either the BIA or CCAA.
Business debt advice Canada: What to do if your company has too much debt
Is your business facing financial problems? Perhaps your company is in need of a restructuring. TheIra Smith Team can develop a restructuring plan which may or may not include the need to file forbankruptcy protection.
The Ira Smith Trustee & Receiver Inc. Team understands the pain you are going through trying to keep your company alive while trying to negotiate with potential purchasers. We understand that you are playing beat the clock, and the pain and stress you are feeling thinking that you may just run out of time. The bankruptcy protection process can ease this stress and provide a level playing field so that no potential purchaser takes advantage of you.
The Ira Smith Team has a great deal of experience in running a stalking horse stalking horse asset purchase agreement. The stress placed upon you due to your company’s financial challenges is enormous. We understand your pain points. Call the Ira Smith Team today for your free consultation. We can end your pain and put your company back on a healthy profitable path, Starting Over, Starting Now.
As Benjamin Franklin so wisely stated in 1789, in this world nothing can be said to be certain, except death and taxes. Life is full of surprises – not all of them pleasant. Are you financially prepared in the event that life deals you a low blow – job loss, injury or a health crisis? And, if so, would you turn tocredit cards to support your lifestyle? Do you really know how to calculate the interest on your credit card balances? Below I will explain how an interest on credit cards calculator works.
Interest on credit cards calculator: And the survey says
Interest on credit cards calculator: An alarming Canadian trend
These two surveys bring to light an alarming trend. With no emergency fund, or any savings to fall back on, many Canadians who find themselves in a crisis with a sudden loss of income turn to living offcredit cards. According to Bankruptcy Canada:
Only 25% of Canadians pay off theircredit card debt in full each month which means that 75% of Canadians carry a balance on our credit cards each month
This can result in paying several thousands of dollars each year in interest
Interest on credit cards calculator: How the interest is calculated
The annual interest rate on credit cards ranges from 19% to almost 30%. Credit card companies actually calculate interest on a daily basis. Therefore, if you do not pay the full balance on time by the due date, the interest actually compounds on a daily basis. That is why once balances are overdue, or you are only making the minimum monthly payments, you can never get catch up. The daily compound interest accrues too quickly.
The Financial Consumer Agency of Canada provides a free online credit card payment calculator. Check it out byclicking here.
Interest on credit cards calculator: What to do if you can’t keep up with your credit card payments
In fact, it can take a lifetime to pay off acredit card balance of a few thousand dollars if you’re only making theminimum payments. Living off credit cards is not the answer; getting professional help is. You need atrustee now. Many people fear thatbankruptcy is the only option for serious financial problems, but that’s just not true. Althoughbankruptcy is an option, there arebankruptcy alternatives to consider:
Ira Smith Trustee & Receiver Inc. is here to help. We approach every file with the attitude that your financial problems can be solved given immediate action and the right plan. Give us acall today andStarting Over, Starting Now you can put your financial problems behind you and look forward to living a debt free life.
The purpose of my blog is to provide ideas and suggestions on how a person can fulfill one of the aims of the Canadian insolvency system. That is to carry out successful financial rehabilitation and live profitably and happily after bankruptcy discharge Canada.
After bankruptcy discharge Canada: You are not alone
In 2017, 122,198 Canadians went for eitherbankruptcy or arestructuring proposal. The split was roughly even. These people and their families underwent significant financial and emotional pain. In January and February 2018 together, 19,082 Canadians went for either bankruptcy or a restructuring proposal. The split favoured restructuring proposals slightly.
After bankruptcy discharge Canada: Your financial slate is now clean
Your financial slate is wiped clean. However, yourcredit score has taken a beating. Now is the time to not squander the opportunity you have forfinancial rehabilitation. Notation of your bankruptcy stays on yourcredit report for 7 years after your bankruptcy discharge. In the case of a restructuring proposal, the notation remains on your credit report for 3 years after successful completion of your financial restructuring.
After bankruptcy discharge Canada: My 10 step program to live profitably after a bankruptcy discharge
So how can a discharged bankrupt hop on a rapid course to a bankruptcy rebound? Here are my suggestions:
Use your bankruptcy experience to improve yourfinancial education. Take a course on practical money management.
You won’t have anycredit cards so you have to rely more on cash. Use an envelope system so that every payday you segregate your cash into envelopes, each marked with an essential family expense. Make sure the cash is used only for those essential purposes and no cheating. No borrowing from the envelopes!
Points 1 and 2 above lead naturally into the next point. Sit down with the entire family and work out amonthly budget. Your total expenses cannot be more than your total income, after income tax, for the month. If everyone is involved in setting it up, then they will all understand if you just can’t afford something in a certain month. Also, they will all be helping you stay on budget.
You do need to find a way to startrebuilding credit. Obtain a secured credit card. Not the drug store variety, but the kind issued by a real credit card company. You have to deposit funds with the credit card issuer and then you get a credit limit equal to the funds deposited. Use that credit card each month, but pay off the FULL balance each month. The credit card company then reports to the credit reporting agencies that you are using credit wisely. Over time, this will improve your credit score.
Always remember the behaviours that got you into financial trouble in the first place and don’t repeat them. If it was an event outside of your control likejob loss or a medical emergency, it was not your behaviour that was the cause of your financial problems.
Establish SMART goals. Specific, Measurable, Achievable, Realistic and Timely goals. Setting and reaching your goals will certainly make you an economic success.
Begin building up savings. You need to be financially prepared for a life emergency. As a bare minimum, begin setting up a reserve so that you can withstand a 6 to 9 month emergency that increases your expenses or reduces your income.
Start investing in an RRSP using an RRSP loan. Take out a small RRSP loan. Use yourtax savings to pay it down, and work into your budget repaying the rest of the loan, with interest, during the year. Do the same thing the following years. Not only will you build up RRSP savings, the reported loan repayments will improve your credit rating because you are using credit wisely again.
Purchase based only on your needs that are in your budget; never on your “wants”.
Do not purchase anything on impulse. Research, research and research to make sure that you are getting the best deal possible.
After bankruptcy discharge Canada: The takeaway
The takeaway? It is not easy torecover after bankruptcy discharge Canada. It is a series of small steps using modified behaviour and healthy money management skills. But it is possible. I have seen many of my past clients do it. There is not a magic pill you can take. It is a matter of concentrating and working on moving on and learning from your past mistakes. Working at it one day at a time, you will regain your self-respect and feeling of self-worth by restoring your financial and credit report health and wellness.
After bankruptcy discharge Canada: What if you have too much debt?
I hope that you have found this information helpful. Bankruptcy is the last thing we try to do for a person in financial difficulty. If caught early enough, we can get involved in adebt settlement restructuring program for you.
The Ira Smith Team knows that you are worried because you are facing significant financial challenges. The stress placed upon you is enormous. We understand your pain points.
Contact theIra Smith Team today. We know how to solve your financial challenges, remove your pain and put things back on a healthy path. Contact us today for your free consultation so that we can save your life, Starting Over Starting Now.
No matter how much money you have, you can still get into financial trouble by making money management mistakes. Just follow the news and on a regular basis you’ll hear about a celebrity who you thought was worth millions and is now filing for bankruptcy. We have also all heard about retired athletes money errors.
Money management mistakes: Good income means nothing
It’s not enough to make a good wage; it’s what you do with it that matters. I recently read a story of a woman who worked as a secretary her whole life and passed away leaving a multi-million dollar estate.
Money management mistakes: 5 money mistakes to avoid
Here are 5 financial mistakes that can really hurt your future:
Make a budget and stick to it: Everyone should have a budget. It’s the only way you’ll really understand how much money is coming in and what’s going out. I think you’ll be quite surprised at what you’re actually spending and what you’re spending it on. Without a budget to rein you in, it’s easy to lose control.
Have a rainy day fund: Everyone at some time in their life is going to have a rainy day. It could be a job loss, health issue, major repair to the house or car or another unforeseen circumstance that will need a large amount of money. Unless you plan for the unexpected, you could be significantly impaired financially.
Keeping up with the Jones: Are you worried about keeping up with the neighbours and living in a house beyond your means, driving cars that are too expensive and spending way too much money to give the impression of having money? This is a recipe for financial disaster.
Last week I provided you with my infographic, video and blog to give you information on the Canadian corporate bankruptcy Canada process. I focussed on how an incorporated business files for a voluntary bankruptcy in Canada. This week, I want to describe how an individual files for voluntary bankruptcy. I also want to answer what I have found to be the personal bankruptcy Canada faq. So look at the infographic and watch the video below. Feel free to read in more detail below the video.
Personal bankruptcy Canada faq: Personal bankruptcy process in Canada
One of the most asked questions is “What is the bankruptcy process in Canada?”. Last week our infographic and video described the corporate bankruptcy process in Canada. This week’s video describes the personal bankruptcy process in Canada.
VIDEO – Personal bankruptcy Canada faq
Personal bankruptcy Canada faq # 1 – How do I recognize if I am in financial trouble?
If you are having difficulty paying your debts or have actually quit paying them altogether then you are in financial difficulty. Call an expert, a government qualified trustee to check your choices for reducing your debt and eliminating your stress and pain.
Personal bankruptcy Canada faq # 2 – Is bankruptcy my only alternative to get relief from debt?
The short answer is no; there are other options. You should always start first with a free consultation with a licensed insolvency trustee (LIT or Trustee). A LIT is a private party licensed by Industry Canada to carry out the restructuring and liquidation rules under the Canadian Bankruptcy and Insolvency Act (BIA). The LIT will discuss options with you to first avoid bankruptcy. These options include:
Bankruptcy does not deal with debts such as home mortgages, vehicle loan, spousal support or child support. Debt settlement firms try to bargain with your lenders to lower the amount owing. They also prepare a payment plan for you to settle the debt; they do not “erase your debt”.
The Canadian government is in the process of implementing new rules to curb the activities of some debt settlement companies. Some of them charge you for reviews that a licensed insolvency trustee performs for free. They also sell you products you don’t need, under the guise of helping you improve your credit score.
Personal bankruptcy Canada faq # 3 – I have actually seen advertisements from Debt Settlement firms stating they could erase my debt without making use of a Trustee in bankruptcy. Just how does that work?
They don’t and their ads are misleading. If you first have a free consultation with a LIT, you will learn that a number of choices available to you that include yet are not restricted to debt reduction including a consumer proposal.
Understand that these debt settlement firms are not licensed trustees. Eventually, they stop charging you for things a LIT would do for free. Then they ultimately hand you over to a LIT for either a consumer proposal or bankruptcy. You could have just gone to see a professionally licensed Trustee to start with!
Personal bankruptcy Canada faq # 4 – Do I get approved for bankruptcy?
You qualify for individual bankruptcy in Canada if you are financially troubled, insolvent and owe greater than $1,000.
Personal bankruptcy Canada faq # 5 – Should I file bankruptcy?
Without the detailed information of your unique circumstance, that decision cannot be made. Get In touch With Ira Smith Trustee & Receiver Inc. for a complimentary no commitment session so you will understand your options for ending your debt pains, Starting Over, Starting Now.
Personal bankruptcy Canada faq # 6 – If I declare bankruptcy, will I lose my house and car?
There are certain claims that are not released by your discharge from bankruptcy. Examples are home mortgages and car loans, if you choose to keep them. It comes down to what is your equity in those assets. The answer to that question and your ability to cash-flow those debts will be the determining factor. There is a list of items that are exempt from seizure. Call Ira Smith Trustee & Receiver Inc. to find out more.
Personal bankruptcy Canada faq # 7 – Once I file bankruptcy, exactly what occurs to the money I owe?
Once you declare bankruptcy you will be required to surrender certain non-exempt assets to the Trustee. These assets will then be sold and the money earned from the sale of the assets distributed among your creditors.
Personal bankruptcy Canada faq # 8 – Even though I have not located work in my field, I still owe on my student loans. Will my bankruptcy get rid of that debt?
Is your date of bankruptcy within 7 years of when you discontinued to be a full or part-time student? If so, your student loan debt will not be released by your discharge from bankruptcy. In particular instances, you could be able to apply to the court for a discharge of your student debt obligations under the “hardship provision”.
Personal bankruptcy Canada faq # 9 – What takes place to my salary or wages throughout a bankruptcy?
Salaries and wages are not influenced by bankruptcy. However you will need to complete an Income and Expense Form noting your household earnings as well as costs. This becomes part of your budgeting procedure. If your earnings goes beyond specific requirements developed by the Office of the Superintendent of Bankruptcy (OSB) (“surplus income”), you will be required to pay part of the surplus income into the bankruptcy estate through the trustee.
Personal bankruptcy Canada faq # 10 – Canada Revenue Agency has actually frozen my bank accounts and has a garnishee with my employer on my earnings. Just how can I stop all that?
If you have filed personal bankruptcy, personal income tax debt is an unsecured debt. As soon as you’ve declared bankruptcy or made a consumer proposal, Canada Revenue Agency (CRA) cannot start or continue taking any kind of enforcement activity versus you, consisting of wage garnishment or freezing your assets. Your Trustee will alert CRA once you file. The LIT will also advise both CRA and your bank and employer that any enforcement activity against you for your debt cannot continue.
Personal bankruptcy Canada faq # 11 – Will I still owe loan after I state bankruptcy?
Maybe, due to the fact that bankruptcy does not cover secured lenders – home mortgages, auto loan, student loans (if it is less than 7 years given that you discontinued to be a full or part-time student). It also does not cover certain other debts:
penalties or fines enforced by the court;
spousal support;
child support; or
debts arising from fraud.
Personal bankruptcy Canada faq # 12 – How long will I be bankrupt?
The time you spend in bankruptcy will depend on whether this is a first or 2nd bankruptcy and if you have surplus income. Get In touch with Ira Smith Trustee & Receiver Inc. to find out more.
Personal bankruptcy Canada faq # 13 – Who will know that I have declared bankruptcy?
As soon as you declare bankruptcy your Trustee will tell your creditors, CRA, and the Superintendent of Bankruptcy. The two Canadian credit bureaus, Equifax and TransUnion, obtain filing records from the Superintendent of Bankruptcy, so it will be on your credit report.
Bankruptcy filings are a public document. On top of that particular personal bankruptcies, those with non-exempt assets estimated to realize more than $15,000, need an ad in the “legal” section of a local newspaper.
Personal bankruptcy Canada faq # 14 – How will bankruptcy influence my creditscore ranking?
An individual that files bankruptcy gets the lowest credit score ranking. Details of your bankruptcy that influences your credit report is inevitably eliminated many years after your discharge from bankruptcy.
Personal bankruptcy Canada faq # 15 – What does a LIT/Trustee do?
A Trustee is an individual or company licensed by the OSB to carry out mandates under the BIA such as bankruptcy, proposal, consumer proposal, summary administration bankruptcy and business reorganizations. A LIT is an officer of the Court. The Trustee has a duty of care for the rights of both the debtor and the creditors.
The LIT also makes certain that the legal rights of the insolvent/bankrupt are not abused.
Here is a listing of standard steps taken by a Trustee:
Reviews and counsels debtors on available alternatives
Prepares official documentation that is both filed with the OSB and used to tell creditors
Ensures the validity of creditors’ claims
Ensures that debtors are provided with mandatory counselling and access to mediation services if there is a dispute about any income they are required to contribute
Sells the debtor’s assets, except those exempt from seizure by provincial and federal laws, and hold the proceeds in trust for distribution to creditors
Administers the bankrupt estate from beginning to end
Assesses the debtor’s conduct both before and during a bankruptcy, as well as the cause(s) of the bankruptcy; and
Arranges for (and if necessary reports all the above to the Court) for the bankrupt’s application for a discharge (in the case of personal debtors)
Personal bankruptcy Canada faq # 16 – How do I pick the ideal Trustee?
Make an appointment for your free consultation. Meet with the Trustee and ask any questions you might have about alternatives to bankruptcy, consumer proposal, debt settlement/restructuring, bankruptcy and/or the bankruptcy procedure. Get a feel for not only the answers you receive, but how interested does the Trustee seem in you as a person. Can you see yourself relating well to that person. Does the Trustee make you feel comfortable and the type of person you want to work with.
If not, consult with a different Trustee firm and repeat the procedure until you find a Trustee that you really feel comfy working with.
Personal bankruptcy Canada faq # 17 – Is my spouse/partner impacted by my bankruptcy?
Your partner/spouse will not be financially affected by your bankruptcy unless they have co-signed a debt or own assets jointly with you. A creditor could pursue your spouse/partner for any debt that they have co-signed for. This includes a mortgage on your jointly owned home.
Personal bankruptcy Canada faq # 18 – How will my bankruptcy impact my present divorce case?
In Canada, the bankruptcy process does not interfere with the majority of the divorce proceeding. The Trustee will stand in the shoes of the bankrupt spouse when it comes to the rights for either the equalization payment or the division of property. All issues about spouse and child support and child custody issues carry on as if there was no bankruptcy at all.
Personal bankruptcy Canada faq # 19 – What is Chapter 7?
Chapter 7 is not applicable in Canada. It is the liquidation section of the U.S. Bankruptcy Code, the federal law governing bankruptcy in America.
Personal bankruptcy Canada faq # 20 – What is Chapter 11?
Chapter 11 is not applicable in Canada. It is the corporate restructuring section of the U.S. Bankruptcy Code, the federal law governing bankruptcy protection in America.
Personal bankruptcy Canada faq – What Now?
I hope that you have found this information helpful. Bankruptcy is the last thing we try to do for a person in financial difficulty. If caught early enough, we can get involved in a debt settlement restructuring program for you.
The Ira Smith Team knows that you are worried because you are facing significant financial challenges. The stress placed upon you is enormous. We understand your pain points.
Contact the Ira Smith Team today. We know how to solve your financial challenges, remove your pain and put things back on a healthy path. Contact us today for your free consultation so that we can save your life, Starting Over Starting Now.
I can see some of you scratching your heads right now. You are wondering how in the world following your doctor’s orders can save you money; but it really can saving money Toronto. Even in Canada where we have Universal Healthcare, it does not cover 100% ofall prescription medication. This unfortunately can lead to non-compliance which can be very costly and even deadly.
Quick response to treatment: After a few days on the medication, the patient feels great and stops taking the medicine instead of completing the course of treatment.
Side effects: The patient feels worse from the side effects than from the illness.
Saving money Toronto: Why should you always take your medication as directed?
“These choices are counterproductive,” Sabitoni stresses. “Taking medication as directed saves you money, keeps you healthier and helps you live a longer life. Never cut corners with your medicines. That’s one of the most important decisions you will ever make.” Following doctor’s orders will keep you healthy andsave you money!
Saving money Toronto: What if you can’t afford to follow your Doctor’s orders?
If you’re not taking your medication because the cost causes you more pain than your illness, you needprofessional help and you need it now!Ira Smith Trustee & Receiver Inc. understands financial pain and can help you solve your financial problems and get you back on track to debt free livingStarting Over, Starting Now. Call the Ira Smith Team today so that we can end your pain and you won’t have to worry about paying for prescription medication again. Don’t delay. Give us acall today!
The purpose of this infographic, video and blog is to give you Canada bankruptcies information. I want to explain how Canadian bankruptcy and insolvency law works for companies and what the major steps corporate bankruptcy laws in Canada are. So watch the video below and feel free to read in more detail right below the video.
Canada bankruptcies: Video
Canada bankruptcies: The 10 standard steps in a voluntary corporate bankruptcy
The actions of aLicensed Insolvency Trustee (Trustee) takes with respect to the assets and the claims of creditors in acorporate bankruptcy may differ from case to case. However, there are 10 standard steps the Trustee takes in each corporate bankruptcy file. These steps are to understand and deal with the nature of the assets and the creditor claims.
Here are the 10 steps I take as a standard process with each corporate bankruptcy.
Step 1 – Initial meeting with Trustee
I meet with theDirectors of the company by providing a free consultation. In this meeting, I learn the causes of the company’s insolvency and the nature and extent of the assets and the claims of various creditors. This includes potential trust claimants and secured creditors.
After obtaining the information I need to provide advice specific to that company’s situation, I decide if the company is a candidate for arestructuring, either informally or in abankruptcy protection mode. If possible, this is preferable, as it will save jobs and allow the company to continue in business. If not, I advise about corporate bankruptcy and what is involved.
Step 2 – Directors meeting
If bankruptcy is the answer, the Directors formally meet and pass a resolution stating that the company is insolvent and must file anassignment in bankruptcy. The resolution also indicates which Director is authorized to sign all documents and be the Designated Officer in the bankruptcy proceedings. The Designated Officer is the person that will attend theFirst Meeting of Creditors and answer questions about the causes of the company’s insolvency and bankruptcy and how the company conducted business.
Step 3 – Signing all documents
With the signed Directors’ resolution in hand, I prepare all necessary bankruptcy documents. I then meet with theDesignated Officer to explain the documents and have them all signed by him or her.
Step 4 – Filing with Official Receiver
TheOfficial Receiver is the local representative and part of the FederalOffice of the Superintendent of Bankruptcy. I electronically file the required documents and wait for the Official Receiver to issue the bankruptcy certificate. The company is not officially bankrupt until the day and time that the Official Receiver issues the bankruptcy certificate. Normally it gets issued on the same day or the next day. So, if the timing of the start of the bankruptcy is important, I need to take a time lag into consideration.
Step 5 – Bankruptcy certificate
The company is not officially bankrupt until the day and time that the Official Receiver issues thebankruptcy certificate. Normally the issuance is on the same day or the next day. So, if the timing of the start of the bankruptcy is important, I need to take a time lag into consideration.
Once the certificate is issued, my firm Ira Smith Trustee & Receiver Inc., is named as the Trustee. This appointment is valid until theFirst Meeting of Creditors. At the meeting, one of the things the creditors must vote on, is affirming the Trustee’s appointment.
Step 6 – Trustee takes possession
Now that I am the Trustee, I have a duty to take possession of the company’s books and records and the known assets. Taking possession of the assets is subject to the rights and wishes of any trust claimants or secured creditors.
Step 7 – Trustee notifies known creditors
Within 5 days of the date of bankruptcy, I must familiarize myself with the books and records as ot the names and addresses of the creditors. I must also in those same 5 days, set the time and place for the First Meeting of Creditors and mail out thenotice to the creditors advising of the bankruptcy, the creditors meeting details and providing aproof of claim form. I must also arrange for a notice of the bankruptcy be placed in alocal newspaper so that any unknown creditors are officially on notice.
Step 8 – Trustee safeguards assets
Again subject to the rights of anytrust claimants orsecured creditors, I must safeguard, insure and store the assets. I can begin formulating a plan for selling the assets if there is equity for the bankruptcy estate. However, I cannot sell any assets before the First Meeting of Creditors without a Court Order. At the creditors meeting is where I seek the approval of the creditors for the plan I have prepared to sell the assets. After obtaining that approval, sales can be completed by the Trustee.
Step 9 – Trustee prepares the report
I prepare my Trustee’sReport To The Creditors On Preliminary Administration. The report is handed out to the creditors present at the First Meeting of Creditors. It is also a public document, so any creditor who could not attend the meeting can receive a copy.
The report covers the following areas:
Background information
Causes of financial difficulty
Description and estimated value of the company’s assets
Any trust, secured or property claims against the assets
What conservatory and protective measures to safeguard the assets the Trustee has taken to date
Books and records of the company
What the Trustee’s review to date of the books and records has determined, if anything
Did the Trustee retain legal counsel yet and if so, for what reason? If there is a trust, secured or property claims that the Trustee knows about, it would be normal for the Trustee to get a legal opinion on the validity and extent of such claims prior to the creditors meeting. The Trustee would advise the creditors of what the legal opinion says and how it will affect the sale of assets, or if there is even anything for the Trustee to sell.
The claims of the creditors identified to date.
What the anticipated realization and distribution to the unsecured creditors may be
The Trustee’s fee
Any other matters
Step 10 – The First Meeting of Creditors
Within 21 days of the date of bankruptcy, I hold the creditors meeting. My report described above is distributed. The Trustee, the Designated Officer and possibly the lawyer hired by the Trustee, attend the creditors meeting. Also attending are any creditors who wish to take part.
The creditors meeting is the place where the creditors can ask questions and find out information about the causes of bankruptcy and the Trustee’s estimate of what the unsecured creditors may receive by way of a distribution.
As mentioned above, the creditors also must approve the actions and activities of the Trustee to date, and approve any steps the Trustee wishes to take in realizing upon assets and dealing with creditors’ claims. The creditors also appoint up to 5 Inspectors. The Inspectors are representatives of the creditors who supervise and assist the Trustee and ultimately must approve the Trustee’s actions.
canada bankruptcies
These are the 10 standard steps I take in every voluntary corporate bankruptcy. The exact things I must do to realize upon the assets and deal with the claims of creditors will depend on the assets and claims themselves. When the bankruptcy administration is complete, including any distributions made, the Trustee then obtains a discharge.
Is your company experiencing financial difficulty?
I hope that you have found this information helpful. Bankruptcy is the last thing we try to do for a company in financial difficulty. If caught early enough, we can get involved in aturnaround situation for your company to keep jobs and value.
The Ira Smith Team knows that you are worried because your company is facing significant financial challenges. Your business provides income not only for your family. Many other families rely on you and your company for their well-being. The stress placed upon you due to your company’s financial challenges is enormous. We understand your pain points.
Contact the Ira Smith Team today. We know how to solve your company’s financial challenges, remove your pain and put things back on a healthy path. Contact us today for your free consultation so that we can save your company, Starting Over Starting Now.
When it comes to financial matters there’s no equality of the sexes. Although completely unfair, women’s financial inclusion faces financial barriers. According to the most recent Statistics Canada income numbers, overall in Canada, the earnings gap between men and women who work is about 31%. Full-time working women, meanwhile, earn 26% less than full-time working men.
Women’s financial inclusion: Five tips to lower the financial barriers facing women
Unfortunately change is slow to come. I want to present five tips on how to try to; (i) level the playing field; (ii) lower the financial barriers facing women; and (iii) promote womens financial inclusion.
Find out if you’re being paid fairly: This many take a little digging. Ask friends or family. If you have a good relationship with someone in human resources, they may be willing to share information with you. Websites like Glassdoor should give you an idea (not necessarily right) of what other people in similar jobs are making.
Ask for a raise: In a recent survey by Maclean’s and Insight West, out of 875 working Canadians polled, only 11% of women said they’ve tried negotiating a higher salary because of a perceived disparity with a male colleague and only 41% of those who tried were successful. According to Sarah Kaplan, director of University of Toronto’s Institute for Gender and the Economy, it’s important to be prepared before sitting down with the higher-ups. “The best thing you can do is take as much documentation you have about the wage differences and approach your boss and say, ‘I just want to understand why there might be this difference,’” says Kaplan. “All you can do is be as evidence-based as possible and go have that matter-of-fact conversation.” If you don’t succeed, try again in six months.
Set financial goals: What are your long-term goals? Do you want to make a large purchase like a house or car? Are you saving for retirement? Do you have an emergency fund? To reach your financial goals, work with a trusted professional who can help you realize your financial goals.
Learn about different types of investments: Knowledge is power. Understanding different types of investments will allow you to take part with your advisor in how and where to invest your money.
Review your finances annually: Meet annually with your advisor and review your finances to decide whether your investments are performing as expected. Make changes as required.
Women’s financial inclusion: It must start with getting out of debt
As we often state, always get yourself out of debt as quickly as possible, especially high interest debt. It’s impossible to move forward financially when debt is keeping your trapped. Unfortunately, women’s financial inclusion may at times include too much debt also.
If debt problems are preventing you from achieving your financial goals, contact the Ira Smith Team today. Our team of professional trustees can help you overcome your financial difficulties. Give us a call today and Starting Over, Starting Now you can be on your way to debt free living and achieving your financial goals.
We now have a Canadian to add to the long list of Ponzi scheme criminals. A Ponzi scheme is a fraud perpetrated on unsuspecting parties in which belief in the success of a non-existent enterprise through the payment of quick returns to the first investors from money invested by later investors.
Ponzi scheme criminals: What is a Ponzi scheme?
The name comes from the swindling ways of an Italian born con man in the late 1890’s and early 1900’s – Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi – known in North America asCharles Ponzi. The most famous of the modern-day Ponzi scheme criminals isBernard (Bernie) Madoff, who is serving 150 years in prison for his multi-billion dollar Ponzi scheme.
Ponzi scheme criminals: Canadian Wade Robert Closson, Ponzi scheme criminal
CanadianWade Robert Closson, a 48-year-old Sturgeon County, Alberta resident was recently sentenced to seven years in jail for executing a Ponzi scheme. He was originally charged in over 80 counts of fraud. Mr. Closson pleadguilty to 53 counts. Most of the fraudulent activities encompassed more than one victim, typically a husband and wife pair. Several of them were present in Court and read their victim impact statements. Others were read on behalf of the victims.
Ponzi scheme criminals: His swindle has caused financial devastation
Many of the victims were discussing feelings of shame. They have experienced overall financial devastation. Some are now still working at the ages of 83, not being able to retire. As a result of thefraud perpetrated upon them by Mr. Closson, they cannot afford to take a vacation or go out for a dinner.
Ponzi scheme criminals: With friends like Mr. Closson……….
Mr. Closson was actually friends and even related to many of the victims. Most of them are talking about the loss of trust in their friend, in humanity and their ability now to relate to other human beings.
He preyed on his friends and relatives, who recruited from their social circles to invest with Closson. A number who lost money in the scam lost more than $100,000 with one suffering a loss of over $600,000. This included cash from a credit line and theirRRSP. Closson took $80,000 of that amount out of the couple’s accounts without their authorization.
Ponzi scheme criminals: Essentially, it was a mortgage scam
The overall size of the fraud itself was $11 million dollars that ran through the Ponzi scheme. The Crown was able to prove losses of about $6 million dollars. That is what was in the agreed statement of facts.
TheCourt heard how Mr. Closson ran the Ponzi between 2006 and 2013. He operated two firms, Optam Holdings Inc. (Optam) and Infinivest Mortgage Investment Corporation (Infinivest), which both entered into bankruptcy in 2013. Closson would take the cash invested in Infinivest to pay off the investors in Optam.
When Optam applied for bankruptcy it detailed about $10 million in liabilities spread out among 69 creditors. The biggest one was Infinivest, which Optam owed $4 million.
ponzi scheme criminals
Ponzi scheme criminals: He recruited friends and family to be on his sales team
Closson made use of the cash to pay himself around $1.185 million throughout the period of the fraud. He used an unspecified amount of money for at least one vehicle, credit cards and golf club. Mortgage payments for his mother-in-law and father-in-law too.
He incentivized people to bring in others into his scheme by paying a commission to his buddies and family members. He invested in various other companies, including a financial investment in a firm that operated a lumber mill in Nicaragua. This investment did not work out well either.
Ponzi scheme criminals: The sentencing
In Court, Closson apologized for his activities and requested the forgiveness of the 20 victims who attended Court for the sentencing!
Justice Belzil ordered Closson to pay restitution of $5.8 million he lost in the Ponzi plan together with a fine of $10,600. He is banned for life from trading in securities.
The Ponzi plan spurred an examination by the Alberta Securities Commission which fined Closson $1 million and banned him from trading in the Province of Alberta in 2015. Up until now Closson has made no payments.
“It is one thing to be taken advantage of by a stranger but this was a trusted friend,” Justice Paul Belzil said when sentencing Mr. Closson.
Ponzi scheme criminals: Wade Closson, the undischarged bankrupt
Closson and his spouse have both filed forbankruptcy on March 27, 2013. He remains an undischarged bankrupt with a hearing set for his discharge from bankruptcy. No doubt that hearing was adjourned until the outcome of the criminal trial was known. Even if Mr. Closson does one day receive a discharge from bankruptcy, the Court fine and the restitution Order, because the restitution is a liability arising out of fraud, will follow him for the rest of his life.
Ponzi scheme criminals: Do you have too much debt?
Have you taken on debt that you cannot repay as a result of being swindled from aPonzi scheme? Have you been swindled and now don’t have enough cash to meet all your debts? Are you facing financial problems for any other reason? The Ira Smith Team can develop a restructuring plan for you.
Debt problems are stressful and confusing. The Ira Smith Trustee & Receiver Inc.Team understands the pain you are going through trying to stay alive and trying to support yourself and your family. We understand the pain and stress you are feeling thinking that you may just soon hit the wall.
Our debt settlement plan process can ease this stress. TheIra Smith Team has a great deal of experience in helping people avoid bankruptcy while resolving their debt problems. We understand your pain points.Call the Ira Smith Team today for your free consultation. We can end your pain and put you back on a healthy profitable path, Starting Over, Starting Now.
: Introduction
