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CANADA MORTGAGE STRESS TEST: WE EXPOSE THE SECRET TO TURN YOU FROM ZERO TO HERO

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Canada mortgage stress test: Introduction

Suggested changes from the Office of the Superintendent of Financial Institutions (OSFI) have left people with some misunderstandings about the Canada mortgage stress test. The idea is a little frightening to a lot of people. So I wanted to give this information to hopefully settle a lot of nerves.

The most fascinating (and most misunderstood apparently) is the mandatory stress testing of brand-new mortgages. The new OSFI proposal titled “Draft Guideline – Residential Mortgage Underwriting Practices and Procedures” involves a new Canada mortgage stress test procedure. But the greatest changes are checking if borrowers could manage an interest price hike of 2% more than they’re paying. OSFI also recommends a re-calculation of the loan-to-value (LTV) ratio.

The real issue isn’t really screening for new home loans. Just Toronto and Vancouver and are truly getting an a ** whipping from the new suggested policies. The problem is, there is lots of online chatter providing misinformation. Many blogs are declaring that lots of existing homeowners that could have overpaid in some markets, won’t qualify on renewal. That’s not exactly true.

OSFI states that a “residential mortgage” for the purpose of the suggested new stress testing includes any loan to a borrower secured by residential property. The following loan products also apply:

Canada mortgage stress test: Stress testing rate hikes

OSFI verified that certain existing consumers would not undergo stress testing. The 2% higher rate test will be avoided if they renew at the very same financial institution. If you can, simply renew at your existing lending institution. That way you will not need to show that they can manage their mortgage at the greater rate.

Those intending on locking in a better rate at a new financial institution, would certainly have to undertake the Canada mortgage stress test procedure like a new debtor. Many people may not feel they can pass the new proposed stress testing rules. So they may not be able to shop for the cheapest mortgage rate. They also won’t lose their homes because of the new stress testing if they renew with their existing mortgagee.

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Canada mortgage stress test: Stress test LTV ratios

What happens if your home’s value experiences a real decline? What if your uninsured mortgage drops below the threshold and would now need being insured? If you’re moving to another financial institution, you could be in big trouble. You’ll have to go through the stress testing. The new lender will tell you if you qualify on rate and value.

OSFI’s proposed new guidelines also states lenders need to update the debtor and residential or commercial property analysis periodically. Not necessarily just at renewal. They make this recommendation as part of properly assessing credit score risk.

Widescale capitulation of real estate markets, would give the regulator a bigger problem. Your lending institution doesn’t want your house. They want the rate of interest on your home mortgage paid.

It’s not exactly in their best interest to voluntarily update the LTV ratio of your home with routine frequency. They could, yet that does not make a great deal of economic sense to try to seize homes that are dropping in value. The lenders want their borrowers to stay current with their payments and not look for a technical reason to take over your home.

Canada mortgage stress test: Meet your new predator, The Big 5

As I stated above, the most fascinating thing is borrowers at danger of falling short on the refinance stress test, won’t be able to go shopping about for better prices. With half of all Canadian bank revenues coming from mortgages, and with growth set to taper– you better believe somebody is going to take up the slack.

Ironically, those that cannot manage to pass the stress test, will possibly be charged a higher rate of interest by their lender!

Canada mortgage stress test: Are you stressed out over not being able to pass the new Canada mortgage stress test guideline?

If you or your business are stressed out by your debt, regardless of what type it is, we can help you. The Ira Smith Team has lots of experience in helping people and businesses restructure their debt and avoid bankruptcy. Call the Ira Smith Team today and book your free consultation. We treat everyone with compassion and respect, while together we solve your debt problems, so you can be Starting Over, Starting Now!

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RETIREMENT PLANNING ADVISOR: HAVE YOU GIVEN ENOUGH THOUGHT TO YOUR RETIREMENT PLAN?

 

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Retirement planning advisor: Introduction

We’ve written many blogs about Canadians who haven’t saved for their retirement and now find their golden years less than golden. You, on the other hand have been saving, perhaps with the help of a retirement planning advisor. So your retirement should be relaxing and fun filled. Unfortunately that’s not necessarily the case. You may not have given enough thought to your retirement plan.

Retirement planning advisor: When you planned for retirement, how long did you plan for?

Canadians are living much longer than past generations. In fact the fastest growing age group is centenarians (Statistics Canada). And now, new census data reveals that for the first time in history the percentage of seniors (16.9%) now exceeds the number of children (16.6%).

Have you planned for what could be a 30-year retirement? The Government of Canada is recommending just that.

Retirement planning advisor: Do you know how much money you would need to retire?

According to a 2015 BlackRock survey:

  • 40% of Canadians said they only had a general sense of how much money they’d need to retire
  • 33% said they had no idea what-so-ever how much money they’d need to retire

Retirement planning advisor: How much money will you get in government pensions?

Most Canadians depend on Old Age Security (OAS), Canada Pension Plan (CPP) and Guaranteed Income Supplement (GIS) for the all or most of their retirement income. Do you have any idea how much money this amounts to? This federal government calculator will give you a rough estimate of how much income to expect from CPP and Old Age Security once you retire.

Retirement planning advisor: Have you planned for the unexpected?

You may plan to work well into your 60s, 70s or beyond; but what will you do if you have to retire early because:

  • Your health won’t permit you to continue working
  • You have to assume the role of a caregiver for a loved one
  • You or a loved one require additional care

Even though you’ve been saving, it doesn’t mean you’ll have a well funded retirement. When making your retirement plan, take all of the things we’ve discussed in this blog into consideration.

Retirement planning advisor: How to get rid of a troublesome debt load

If you’re still carrying a troublesome debt load, you need more than just a retirement planning advisor. Now is the time to call a professional trustee. The earlier you can out debt behind you, the more you can save. Give the Ira Smith Team a call today and Starting Over, Starting Now your golden years will look a lot more golden.

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Retirement Planning Advice: Every Comprehensive Guide To Retirement Planning MUST Include A Healthy Lifestyle Plan

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Retirement planning advice: Introduction

As part of the credit counselling process, many people start asking for retirement planning advice. When I ask, do you have a retirement plan? people start talking to me about how they will need to grow their savings and investments. Retirement planning is so much more than that. What your retirement ultimately looks like is largely dependent on your healthy lifestyle plan.

Retirement planning advice: You can’t go from full throttle to neutral

You’re most likely used to working at least a 40 hours a week. And, at the end of the rainbow is retirement – no more alarm clocks, no fighting rush hour traffic or an overcrowded public transport system, no more brown bag lunches… Now you can reclaim at least 40 hours a week in addition to the hours that you spent commuting; but what will you do with those hours?

Retirement planning advice: The key to a happy retirement is having a healthy lifestyle plan

People that retire are very prone to depression, particularly men, whose sense of identity is closely tied to work. A 2013 study from the Institute of Economic Affairs that says retirement increases the chance of suffering from clinical depression by about 40%.

Men also have the highest rates of suicide worldwide, according to the World Health Organization. It’s not the job or the money that men miss so much in retirement, but the socialization and self-esteem that work brings, says Ken LeClair, co-chairman of the Canadian Coalition on Seniors Mental Health (CCSMH) and professor of psychiatry at Queen’s University in Kingston.

Retirement planning advice: Retirement is a huge adjustment

Retirement is a huge adjustment and like all stages of life, requires a plan. The key to a happy retirement is having a lifestyle plan. Do you have hobbies and interests? Volunteer work? Learning new things? Meaningful friendships? Travel? Lifestyle planning should ideally start 5 – 10 years before retirement starts so that you’ll be prepared for the transition.

Retirement planning advice: Start saving early on for your healthy lifestyle plan in retirement so as not to have to make tough financial adjustments

The likelihood is that once you retire there is going to be a significant change in your income. Most retirees can’t continue to live the same lifestyle as when they worked full time. The reality is that you’re going to have to make some financial adjustments that may involve downsizing your residence, driving a more economical car, traveling less.

However people generally want to do more in retirement. They have put off their travel and hobbies because they lacked one of the most precious resources – time. Many retirees start off by doing more now that they have the time. There is only one problem; they never saved properly during their working years to have the money to turn their dreams into reality in retirement.

Retirement planning advice: What to do if you have too much debt in retirement?

Unfortunately many retirees are taking on debt they can’t afford by using credit that they can’t repay to support their lifestyles. This is a recipe for disaster and the sooner you seek professional help the better.

A professional trustee can help. Although your particular situation may seem catastrophic, Ira Smith Trustee & Receiver Inc. can get you back on track Starting Over, Starting Now with sound advice and the right action plan. Give us a call today so we can help you start on your healthy lifestyle plan.

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TORONTO BUSINESS BANKRUPTCY: NDP WANTS PENSION PROTECTION

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Toronto business bankruptcy protection: Introduction

The federal NDP party recently met in Hamilton, just outside of the Greater Toronto Area. There was a rally to argue for federal government regulation changes to safeguard pensioners in business bankruptcy and restructuring administrations.

Toronto business bankruptcy protection: Proposed NDP private member’s bill

Hamilton Mountain MP Scott Duvall, the New Democrats’ pension plan critic, informed a group at the United Steelworkers’ Hall that he will certainly present a private member’s bill to secure employees’ pension plans and benefits, and pressure business to offer termination or severance pay, prior to paying secured lenders.

Toronto business bankruptcy protection: The U.S. Steel Canada saga

The concern has actually been a lengthy simmering one with unions and created significant debate throughout the almost three-year, court-supervised restructuring of U.S. Steel Canada. The company exited from its business bankruptcy protection proceedings with a brand-new owner– Bedrock Industries– as well as an old name, Stelco.

Pensioners were smarting. The court permitted the firm to put on hold health benefit repayments for a year and a half while the business was under bankruptcy protection under the Companies’ Creditors Arrangement Act (CCAA).

Generally, these advantages have been maintained by the reorganized business. Pensioners are fretting that a financing system to maintain the pension plan solvent will ultimately fail. It calls for, inter alia, extra Stelco land to be cleaned up, marketed and sold for the net sales proceeds to cover future pension plan commitments.

Toronto business bankruptcy protection: Sears Canada too

Duvall, with NDP leader Tom Mulcair, claimed one more instance of exactly how the regulations are unfair to employees. They cited the Sears Canada situation. Sears Canada remains in business bankruptcy protection. Its employees are encountering a potential decrease in their pension plan benefits.

Toronto business bankruptcy protection: Fairness for employees

They say this should have to do with justness for employees. The NDP wants to see a Canada that benefits every person as well as seeing to it that companies, including multinationals, cannot take the pension plans their employees have earned.

They state that the existing regulation permits funds that ought to go to employees’ pension plans to be given to the secured creditors instead. The NDP is especially concerned when the secured lender is the financially troubled or creditor-protected company’s parent company.

Stelco’s biggest secured lender was U.S. Steel in the United States. The $500 million restructuring saw the American firm get $130 million.

Toronto business bankruptcy protection: Pension plan funding should have first priority

The Duvall proposed private member’s bill would call for pension plans to be 100 percent funded prior to secured lenders being paid. Firms would certainly not be permitted to put on hold retirement benefits in court-supervised restructurings, which occurred with U.S. Steel Canada.

The NDP is calling their proposal “End Pension Theft”. It focuses on altering CCCA legislation as well as the Bankruptcy and Insolvency Act (BIA) to stop companies from placing investors, financial institutions and other lenders ahead of their staff members when they go into bankruptcy protection.

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Toronto business bankruptcy protection: Is there a comparable precedent for such an amendment

Yes there is – the enactment of the Wage Earner Protection Program Act (WEPPA). From 1975, proposals were proactively taken into consideration for the facility of a wage protection plan for when the bankruptcy, liquidation or receivership of a company. The many choices gone over for just how this could be attained consisted of:

  1. very top priority for wages;
  2. acknowledgment of existing provincial/territorial concerns within the BIA structure;
  3. a waiver of the waiting time for EI benefits; and
  4. a wage earner protection fund financed either from basic tax revenue or as a part of the EI coverage regimen.

In November 2003, the Senate Committee on Banking, Trade and Commerce examined the background of these conversations and chose

the alternative for a super priority be taken on. Although the BIA was amended in 2005, these changes did not quickly come into force, as many technical amendments were required to be passed in 2007. The WEPPA came into force on July 7, 2008.

The reason for the timing of creating the WEPPA was a result of NDP pressure put on the minority Liberal government of Prime Minister Paul Martin. The Liberals agreed to the NDP proposal as part of obtaining continued NDP support for the minority government.

So there is precedent for a significant amendment to Canadian insolvency legislation.

Toronto business bankruptcy protection: How likely is such a pension reform in restructuring proceedings to succeed?

At this time, I believe there are certain obstacles from seeing such a significant overhaul being successful. The reasons I say this include:

  1. Today there is a Liberal majority government in power, so the support of the NDP party is not required for the government to pass the legislation it wishes to.
  2. Providing a super priority for all pension shortfalls would dramatically alter the way lending is done in Canada. Banks would be required to include pension plan actuarial shortfall calculations into their borrowing base calculations. It may end up that when there is a pension plan shortfall, there is no borrowing room available at all for a business. This would increase the number of insolvencies.
  3. If the number of business insolvencies increased, that could lead to an increase in job losses. That would hurt employees which would hurt the same group the private member’s bill would be trying the protect.

However, the Liberal government of Prime Minister Justin Trudeau has shown that it does try to play to whichever group the government feels it can gain votes from. So, it is not out of the realm of possibilities that the government would try to enact some legislation to give a limited super priority to a part of an underfunded pension plan liability. Time will tell whether such a proposal has any chance of success at this time.

Toronto business bankruptcy protection: Does your Toronto area business require restructuring proceedings to survive?

If you’re company is struggling with too much debt, give the Ira Smith Team a call. We can help with refinancing and restructuring so that your business can get back on track Starting Over, Starting Now.

UPDATE: CHECK OUT OUR NEW VLOG BY CLICKING ON:

SEARS CANADA IS CLOSING: THE #1 REASON YOU HAVE TO RUN AND NOT JUST WALK TO REDEEM YOUR GIFT CARDS AND CREDITS

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CREDIT CARD MINIMUM PAYMENT AMOUNT: ARE YOU BEING FOOLED BY ONLY MAKING THE CREDIT CARD MINIMUM PAYMENT

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Credit card minimum payment amount: Introduction

Do you believe that because you make the credit card minimum payment amount on time every month that you’re doing well? Do you think this would let you be considered a good credit risk? If that’s the case, you would be wrong. Making only the minimum payments on your credit cards is a sign that you’re living in a financial danger zone. And the likelihood is that if you continue along this path, you’ll accumulate more debt. You will not get out of debt.

Credit card minimum payment amount: What the TransUnion survey says

TransUnion, one of Canada’s largest reporting agencies, did a recent survey. It showed that making just the credit card minimum payment amount is leading more consumers into delinquency. This is the same result with other loans too.

They’ve also created a “Total Payment Ratio” metric that shows the correlation between the payment amount and the delinquency across multiple products. To calculate the TPR a consumer’s total monthly credit payments are divided by the total minimum due on all the consumer’s credit products. The higher the TPR, the less likely a consumer falls behind on payments. Using the TPR to find the risk of delinquency, the TransUnion study showed:

  • Canadians with a TPR of less than five on their credit cards had a 1.77% high risk of auto loan delinquency — defined as not making a payment for 90 days or more
  • Once the TPR rose to more than 15.0, the high risk of delinquency dropped to 1.4%

Credit card minimum payment amount: It is not a good sign of your credit worthiness

As you can see, just making the credit card minimum payment amount is not a good sign of your credit worthiness. Conversely, making more than the minimum monthly payments will make you more attractive to financial institutions. This is because consumers that make more than the minimum monthly payments tend to have more liquidity and will be less likely to miss payments.

Credit card minimum payment amount: You need help to get out of debt

If you’re making only the credit card minimum payment amount, you haven’t got a hope to ever get out of debt. The interest rates are around 20% (and sometimes more). Your minimum monthly payments are paying the interest, not the debt. Now is the time to call in the professionals! Contact a professional trustee. The Ira Smith Team can help you conquer debt and get back on track to living a financially healthy life Starting Over, Starting Now. All it takes is one phone call.

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EQUIFAX DATA BREACH: 3 THINGS YOU MUST DO NOW

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Introduction

You may have listened to the news about the Equifax data breach.

Equifax originally said that it impacted only a limited number of Canadians. They have now amended that report to say that 100,000 Canadians are affected. If your details were endangered, Equifax intends to get to you straight away with support as quickly as they have determined that.

In comparison, the Equifax data breach may have affected more than 143 million Americans!

Exactly what took place?

According to Equifax, the violation lasted from mid-May through July 2017. The hackers accessed people’s names, Social Security numbers, birthdays, addresses and, in some instances, vehicle driver’s permit numbers. They also swiped charge card numbers as well as disagreement files with individual identifying information. And they also obtained details of people in the UK and Canada too.

Equifax, is one of the two Canadian credit bureaus, was the subject of a data breach by hackers. This violation has affected lots of Americans, but for now Equifax believes the Equifax data breach has affected just a restricted number of Canadians. Equifax reminds everyone that the hacked US website is for US social security numbers, and does not work for Canadian consumers.

What information was taken?

In Canada, the hackers may have gotten sensitive details, such as names, addresses, and Social Insurance Numbers. Equifax believes that only a limited number of Canadians could have been impacted. They are working to figuring out the exact information. Equifax will update this information as they learn more.

Litigation and investigations begin

Considering that it is one of the largest hacks of the year, the compromised business is now dealing with loads of lawsuits. At least one legal action claims, among other things, that Equifax pumped up financial results to bring up the share price, prior to the hack being revealed. No allegations have yet been proven in Court.

After Equifax announced the Equifax data breach violation about $3 billion was cleaned away from the business’s market cap as its shares dropped by 17% immediately following the disclosure. Lawmakers are concerned that people’s delicate information was not correctly safeguarded. Investigations are ongoing.equifax data breach

Exactly how will this impact me?

The thing is that people who never bought any Equifax services will be negatively affected by the hack. If your details were jeopardized, it may put you at the threat of identity theft. Identification theft is when a person steals your personal information to open new accounts or dedicate activity utilizing your name. We urge you to check your credit score and stay alert in checking your credit card and any other financial account statements.

Equifax data breach: Have my details been endangered?

If you’ve ever before made an application for credit, as an example by requesting a charge card or a cellular phone service, Equifax has gathered your details. Equifax will only contact you if they have identified that your information has been breached. That is why we strongly recommend that you must carefully check all account statements you receive to make sure that: 1. You recognize the account as being yours; and 2. You do not see any suspicious activity in your accounts.

Equifax is the largest credit report bureau in Canada and is extensively made use by lenders, including banks, to prove creditworthiness. Equifax accumulates information from your bank as well as other sources to find your credit history, which is then given to lending institutions.

This case is the tip of the importance of data protection, which is something you must take very seriously. That is why IT people always recommend that you use bank-level encryption to safeguard your data. The Equifax data breach proves them right.

Canada’s privacy commissioner is interested in the Canadian data breach.

The Office of the Privacy Commissioner of Canada has received complaints and calls of concern about this data breach. The privacy commissioner is now considering the matter.

Equifax data breach: Your next steps

  1. Check your credit rating

It’s important you watch your credit report as well as your various financial accounts. That way you will be aware of any kind of adjustments or suspicious activity.

You can do what is called a “soft” credit check on yourself at no cost using one of two Canadian services. We explain it all in our blogs:

  1. Screen your credit card accounts as well as bank accounts

Your charge card and bank accounts are additionally important to watch. Keep an eye out for any transactions you did not make or approve as well as report any problems to your bank or credit card company right away.

  1. Record any theft or crime

If you find a suspicious activity that could involve the theft of either your identity or assets or other criminal offences, report the event to your regional police. You could also report the rip-off or fraud to the Canadian Anti-Fraud Centre. Inform your financial institution as well as bank card firms. As well shut any accounts and cards that could have been hacked instantly.

To find out more, please call Equifax at 1-866-828-5961 or visit their website here.

Equifax data breach: Are you struggling with too much debt?

If you’re struggling with too much debt, give the Ira Smith Team a call. We can help with budgeting and credit counselling so that you can get back on track Starting Over, Starting Now.

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TOO MUCH PERSONAL DEBT: OUR COMPLETE GUIDE TO KNOWING WHEN YOU HAVE TOO MUCH DEBT

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Too much personal debt: Introduction

The reality is that we live in a credit-based society. As a result almost everyone lives with debt and we don’t give it a second thought. After all, who do you know that pays for a house or a car in cash? And who doesn’t use credit cards? Having debt isn’t necessarily a problem; taking on more debt than you can repay is the problem. So how do you know that you’ve taken on too much personal debt?

Too much personal debt: What’s too much debt?

Traditional lenders (financial institutions) will typically grant you a loan based on two main criteria (there are other factors involved).

  1. Total Debt Servicing Ratio (TDSR): Add up all of your monthly debt payments – mortgage/rent, car payment/lease, utilities, credit cards, lines of credit, etc. If these monthly payments add up to more than 40% of your income before taxes, it’s not very likely that a traditional lender will grant you a loan.
  1. Gross Debt Servicing Ratio (GDSR): GDSR is your mortgage payment plus heating and taxes and it should not exceed 32% of your income before taxes. If your GDSR exceeds 32% of your income, it’s not very likely that a traditional lender will grant you a loan.

If you don’t qualify for a loan from a financial institution, you know you’ve taken on way too much debt.

Too much personal debt: Way too much debt

Although subprime lenders will lend money to people who don’t qualify for loans from financial institutions, their interest rates are exorbitant. Borrowing from these companies can put you into worse debt than you’re already in, so run for your life.

Other signs that you’ve taken on too much personal debt are much more obvious. Are you having trouble making your monthly payments? Are you getting calls from collection agencies? Are you living from paycheque to paycheque?

Too much personal debt: When you have too much debt

If you’ve taken on too much personal debt, get help now. Call Ira Smith Trustee & Receiver Inc. today. With immediate action and the right financial plan we can help you get back on track to debt free living Starting Over, Starting Now.

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BANKRUPTCY DISCHARGE: MY CHEAT-SHEET OF THE TOP 8 THINGS THE BANKRUPTCY COURT CONSIDERS

Bankruptcy discharge introduction

A bankruptcy discharge is when the bankrupt is released under Canadian bankruptcy law from his or her debts as part of the bankruptcy process. Some people think that it is the act of filing bankruptcy that releases the bankrupt from liability. This is not the case. It is the discharge from bankruptcy process that “discharges” the bankrupt’s debts.

We explain in this vlog the procedure when a bankrupt’s outright discharge is opposed. We discuss the top 8 things that the Bankruptcy Court will consider in determining just what outcome the bankrupt could expect.

The primary benefit of the bankruptcy process for the insolvent person

The bankruptcy discharge is among the primary benefits of relief under the Bankruptcy and Insolvency Act (Canada) (BIA). The discharge is vital to the bankruptcy process. Debtors, after bankruptcy, can wipe the slate clean and start over, which is a central principle under the BIA statute.

Not all debts may be released

A bankruptcy discharge offers the discharge of many unsecured debts. Credit card debts, personal income tax debt, unsecured personal loans and under certain conditions, some student loan debt are all dischargeable debts. Financial debts, which will not be discharged include:

  • support payments to a previous spouse or to children;
  • fines or financial charges imposed by the Court;
  • debts emerging from fraudulent behaviour;
  • student loans if fewer than seven years have passed considering that the bankrupt quit being a full or part-time student.

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It can be opposed

An insolvent’s bankruptcy discharge application may be opposed by one or more unsecured creditors or the Licensed Insolvency Trustee (formerly called a bankruptcy trustee) (LIT). A creditor opposition is created when the creditor files the required notice of opposition, setting out the reasons for opposing.

This happens if the insolvent has not met all of his/her responsibilities under the BIA. Making full disclosure, attending the required two financial counselling sessions and making all necessary surplus income payments are all duties of the bankrupt that must be fulfilled if a discharge is to be considered.

It can also happen if the individual bankrupt has actually committed a bankruptcy offence. Those are acts listed in section 173 (1) of the BIA. In this case, there needs to be a bankruptcy discharge hearing in Court and the Court will after that evaluate the LIT or creditor opposition as well as give its decision on the discharge from personal bankruptcy.

There are four types of discharges possible

There are 4 types of discharges:

  1. Absolute discharge— The bankrupt is launched from the legal obligation to pay off financial obligations that existed on the day of bankruptcy, except for certain types of debt identified above.
  1. Conditional discharge— The bankrupt must fulfill certain conditions, additional payments into the bankruptcy estate, to get an absolute discharge. Once all conditions have been fulfilled, an absolute discharge will certainly be granted.
  1. Suspended discharge— An absolute discharge that will be granted at later on a specific date determined by the Court.
  1. Refused discharge— The Court has the right to decline a discharge.

If there is no opposition to the discharge from bankruptcy of the bankrupt by a creditor or the LIT, then the LIT is able to provide an automatic discharge by issuing the appropriate certificate. There is no need for attendance in Court.

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The opposition process

When a debtor’s bankruptcy discharge application is opposed by either an unsecured creditor or the LIT, the Trustee needs to secure a Court day. This will be for a Court hearing on the insolvent’s application for discharge. The LIT must then tell all creditors who have filed a proof of claim of the opposition. Details are also provided about the date, time as well as place of the Court hearing.

The Trustee needs to also file a report with the Court on the conduct of the bankrupt both prior to as well as after applying for bankruptcy. The report will as well give a summary of the financial results of the bankruptcy administration. If a creditor has opposed the bankrupt’s discharge, then that creditor likewise needed to send a notice of opposition.

Does the bankrupt need a lawyer on an opposed discharge?

When going to Court for his/her discharge application hearing, a bankrupt would be well advised to come with a skilled bankruptcy lawyer to represent his or her interests. Sometimes the discharge hearing is less formal than various other types of Court hearings.

However, the Court follows all the proper regulations of civil procedure. It is sometimes tough for nonprofessionals to put their best foot forward without an attorney’s aid.

There have been many Court cases on applications for discharge. A Court decision released recently from the Queen’s Bench of Saskatchewan supplies an exceptional walk-through of the points the Court will take into consideration. For those interested, the reference is Hertz Bankruptcy (Re), 2017 SKQB 224 (CanLII).

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The top 8 things the Bankruptcy Court will consider

The concerns the Court thought about, in determining what type of bankruptcy discharge certificate to issue, which is the same in all bankruptcy discharge hearings, were:

  1. Do the conditions of the bankruptcy filing and the bankrupt’s conduct sustain an order discharging the Bankrupt’s unsecured debts?
  2. The Court’s problem is to make sure that within a choice the policy purposes of the BIA are fulfilled. The bankruptcy, including the insolvent’s discharge, should act as a deterrence for the person not to duplicate the very same behaviour.
  3. If the circumstances of the bankruptcy support an order discharging the bankrupt, what terms of discharge are proper under the distinct circumstances of the bankruptcy?
  4. What were the conditions of the insolvent when the debts were sustained?
  5. What efforts did the insolvent make to pay the creditors?
  6. Did the bankrupt pay in respect of certain other debts but not all of them and particularly not the debt of the opposing creditor?
  7. Exactly what are the insolvent’s monetary opportunities for the future?
  8. Is there any other conduct or reality that needs to be factored into with the regard to discharge?

The Court will take lots of variables into account. The conduct, previous income, education and age of the bankrupt are all important factors. The Court will certainly likewise trust the Trustee’s report to Court on the bankrupt’s application for discharge. The Trustee’s report assists in determining facts about the conduct of the insolvent and his or her future prospects.

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Is the bankrupt young or old?

Prevention is always a consideration. It is however very important to remember that Courts tend to be extra conventional when dealing with older bankrupts. A more youthful bankrupt with years of income-making opportunities could be needed to make an extra significant repayment. Less respect is given to the instant ability to pay.

An older bankrupt with some surplus income but fewer working years might be needed to pay less surplus income obligations into the bankruptcy estate.

Bankruptcy discharge: Is my bankruptcy case over when I get a discharge?

You should by this point in my Brandon Blog realize that when you receive an absolute discharge from your bankruptcy, at that point, you are discharged from your unsecured debts.

A discharge shows that you have finished with your bankruptcy legal process and your personal liability for unsecured debts has ceased. It’s not a separate thing from bankruptcy; it happens either automatically or by an Order of the Court, as I have described above.

At that point, the LIT still has some duties to fulfill. They include:

  • if there is going to be a dividend paid to the creditors, making sure that all proofs of claim have been reviewed and allowed for dividend purposes;
  • resolve any uncertainties the LIT may have concerning certain filed bankruptcy claims, including the issuance of Notices of Disallowance if any;
  • preparing the bankruptcy administration Final Statement of Receipts and Disbursements;
  • getting approval from the Office of the Superintendent of Bankruptcy to the Final Statement
  • getting the Final Statement, including the LIT’s fee and disbursements, approved by the Court;
  • issuing the dividend bankruptcy payments, if any
  • getting the discharge of the LIT

It is then that your bankruptcy case is closed.

Bankruptcy discharge: Do you have too much debt and want to avoid bankruptcy?

Do you have too many debt obligations and debt payments and have no idea how to deal with them? Act before you find yourself in the throes of an emergency financial situation. Ira Smith Trustee & Receiver Inc. has assisted many Canadian businesses and people throughout the Greater Toronto Area (GTA) in dealing with debts that need a plan for Starting Over, Starting Now. Don’t postpone. Give us a call today. Financial problems can be solved while avoiding bankruptcy with timely activity as well as our excellent strategy tailored just for you.

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Brandon Blog Post

DEBT ELIMINATION: ARE YOU SABOTAGING YOUR WEALTH BY SAVING AND REDUCING DEBT?

debt elimination
debt elimination

Debt elimination: Introduction

What’s more important – saving or reducing debt? Should I focus on debt elimination or invest excess funds? Should I invest or reduce debt.

These are age-old questions that I’m frequently asked and there isn’t a one-size-fits-all answer. Let’s get back to basics and figure out what your income and expenses are before I can answer whether it’s better for you to save or reduce debt.

Debt elimination: Create a budget

Everyone should have one. The reality is that many people spend what they earn but don’t really know what they’re spending their money on. A budget will find how you’re currently allocating your money – which may be very different from how you should be allocating it.

  • Detail your income
  • Itemize your fixed expenses which are the same each month – housing, insurance, payments on loans, etc.
  • List your variable expenses which are flexible and will vary from month to month – groceries, gas for the car, cell phone, etc.
  • Identify your optional expenses which are non-necessities – meals out, clothing, vacations, etc.

The good news is that to ask “Should I invest or reduce debt”, that means your budget should confirm that you have an excess of income over expenses each month. It also means that you can see that monthly cash excess in your bank account.

Debt elimination: Determine what type of debt you’re dealing with

The reality is that not all debt is created equal. Credit card debt could be costing you 20% interest or more per annum. And, if you have any payday loans, the interest rate could be over 500% (no, this isn’t a typo). High interest debt costs a fortune; pay it off as quickly as possible.

Debt elimination: Create an emergency fund

I always recommend that you have an emergency fund of three to six months worth of living expenses. Job loss or an unexpected expense can put you in a financial danger zone if you’re not prepared.

Debt elimination: Where can you find the money to pay off high interest debt and create an emergency fund?

Go back to your budget and have a good hard look. How many of your optional expenses can you cut or cut back on? E.g. Forgo the vacation for now, don’t buy those really cute shoes, etc.

How much of your variable expenses can be reduced? E.g. Shop at a discount supermarket and price match/use coupons, comparison shop for better cell phone plans, drive less/take public transit more, etc.

You’d be amazed how much money you’ll be able to save and put toward paying off high interest debt and creating an emergency fund.

Debt elimination: Should I invest or reduce debt?

The answer to the question about what’s more important – saving or reducing debt, lies in your budget. If you have high interest debt, pay it off first. If you don’t have high interest debt then you can work on both reducing debt and saving and investing at the same time.

Debt elimination: Are you struggling with debt elimination?

If you’re struggling with too much debt, give the Ira Smith Team a call. We can help with budgeting and credit counseling so that you can get back on track Starting Over, Starting Now.

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debt elimination
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Brandon Blog Post

I NEED FINANCIAL HELP RIGHT NOW: WHAT YOU NEED TO DO WHEN YOU NEED FINANCIAL HELP IMMEDIATELY AND SAY A PRAYER FOR IMMEDIATE FINANCIAL HELP WHILE YOU ARE AT IT

i need financial help right now 2
i need financial help right now 2

I need financial help right now: Introduction

Nobody expects their home to be destroyed or to receive a serious disease medical diagnosis. When emergencies like these do occur, unexpected expenses lead to economic tension. You’re forced to see the bills consume up any financial savings you might have had. You will no doubt be saying “I need financial help right now”.

The good news is, there are resources for people as well as families who need emergency economic aid. For people and households that typically aren’t qualified for aid from the government or nonprofits, perhaps crowdfunding can help you secure the reserve you need.

I need financial help right now: Most Canadians can’t save

No person likes to think they will need emergency financial support. The Canadian Payroll Association’s NPW 2016 Employee Research Survey Results discovered that of those surveyed:

I need financial help right now” is not a pleasant place to find yourself in. If you aren’t saving for an emergency, you could rapidly become mired in debt.

You cannot expect when something might take place. Having monetary support throughout an emergency could bring peace of mind. Try to keep at the very least 6 months of living expenses or revenue in your emergency fund.

I need financial help right now: What to do if you find yourself in an emergency

Begin your savings program by conserving tiny bits from your spending every day.

I want to give some ideas on the best ways to handle an economic emergency:

  1. Don’t panic

If you begin stressing, you might begin to make even worse monetary decisions. Think logically about what you need to do and your following steps. If you’re still not sure what to do discover somebody that understands just how to deal with such emergencies. Tell them “I need financial help right now” so they understand how severe your emergency is. Find that special someone you can trust and tell them everything.

  1. Know your Priorities

See to it to prioritize your expenses. Only spend on the necessities of life, like food, living accommodations and basic clothing. I suggest that you produce a budget overview to help you plan your spending. Surviving a financial emergency can be made harder if you do not prioritize your costs.

  1. Begin to Spend Less

With an excellent budget plan, you’ll realize what you need and do not need in your life. Say goodbye to spa days and say goodbye to dining in restaurants with pals. Reducing things that look like tiny expenditures really has a big influence later down the line.

Do not throw away cash on things you really do not need. If you know your priorities and can properly budget, “I need financial help right now” may just turn into “It will be tough but I can survive this emergency because I have savings”.

  1. Request for Help!

It’s fine to ask when you need it, especially in a scenario where you cannot face your costs alone. Perhaps family or close friends could also be able to help you fundraise to get out of your debt problems.

You may have a great relationship with your banker. Explain to him or her your situation and perhaps your bank can help you. Before you say to your banker “I need financial help right now”, make sure you have prepared your budget. Your banker will want to understand how the bank is going to get repaid.

One thing you must not ever do. Do not borrow from a payday loan company or through a debt consultant. The interest rate and fees are so high, you will never be able to repay it in full.

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i need financial help right now

I need financial help right now: Entitlement programs

Emergency help programs are hard to qualify for and often take months to supply repayment. They rarely can help you when you say to them “I need financial help right now”. However, I do want to give you a list of some emergency programs that are available from the government.

There are various assistance programs offered by the City of Toronto and the Province of Ontario providing financial help for families in need. Some resources to get access to are:

I need financial help right now: Nonprofits offering emergency financial help

There are many charities and not for profit organizations in the Greater Toronto Area and Ontario. Each one focuses on a different need or group of people. You should not overlook the role a charity or not for profit organization can play to help you through a financial emergency. Again, they can’t solve all of your problems all at once when you tell them “I need financial help right now”. But they are there to serve needy people and families facing a financial emergency.

I need financial help right now: What happens if you aren’t eligible for assistance programs?

Government assistance and nonprofit programs often have a lengthy application procedure and certain eligibility criteria. As well, it can take months to get support. Which makes it difficult to get economic aid immediately. Many times they cannot act fast enough when you tell them “I need financial help right now”.

There is one more source that could aid you to receive emergency funds quickly.

I need financial help right now: Crowdfunding may work for your needs

In times of economic stress, crowdfunding has shown in some cases to be a powerful tool that assists people to get the help they need. Many got help through a crowdfunding plea of “I need financial help right now”. You cannot plan for when you’ll be confronted with an emergency, or just how expensive it will be to recover from it. But you could use crowdfunding to discover support from people who sympathize with exactly what you are going through.

Take the time to acquaint yourself on your own with the various crowdfunding platforms.

I need financial help right now: What to do if you have too much debt

We hear many times “I need financial help right now” or “I need financial help immediately”. If that emergency arises and you have not planned for it and saved, your options are very limited.

Act before you find yourself in the throes of an emergency and financial crisis. Ira Smith Trustee & Receiver Inc. has helped many Canadian companies and people throughout the Greater Toronto Area (GTA) dealing with the economic crisis that needs a plan for Starting Over, Starting Now. Don’t delay. Give us a call today. Financial troubles can be solved with prompt activity and the ideal plan tailored just for you.

i need financial help right now 2
i need financial help right now

 

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