Tag: Ira Smith Trustee

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DEBT SETTLEMENT OR CONSUMER PROPOSAL CANADA: REPORT SAYS CONSUMERS HARMED

debt settlement or consumer proposal canada

Debt settlement or consumer proposal Canada: Introduction

In this Brandon’s Blog on debt settlement or consumer proposal Canada, I want to tell you about a recent Government of Canada study. On April 28, 2017, the Office of the Superintendent of Bankruptcy (OSB), released its report of its investigation. The investigation began in May 2016, of Licensed Insolvency Trustee (LIT) business practices in administering consumer insolvencies. The report is titled: “Review of Licensed Insolvency Trustee business practices in relation to administration of consumer insolvencies”. The OSB was becoming increasingly concerned about debt settlement vs consumer proposal Canada and the influence debt settlement companies may have had over certain LITs. I must say that after reviewing the report, I found it shocking.

The purpose of the investigation arose out of concerns over the relationship between debt settlement companies and certain LITs. The OSB wished to decide if LITs were practising per the Bankruptcy and Insolvency Act (BIA), associated policies and OSB Directives. In 2016 they made up over half of all consumer insolvency cases filed.

The aim of the OSB’s evaluation was to recognize as well as analyze possible threats related to the honesty of some elements of the consumer bankruptcy procedure. Specifically in situations where LITs have become part of companies’ connections (or, other inappropriate business relationships) with fee-charging debt management companies.

Prior blogs

We have warned you for years about the dangers of using these types of companies, including:

We, however, had no idea the harm caused to those most vulnerable consumers by a debt management company.

debt settlement or consumer proposal canada

What relationships did the OSB investigation find?

The OSB report indicates that in 2016:

  1. 17 % (9,660) of all consumer proposal filings, the borrower reported having spent first for liability counselling advice from a debt settlement company before being guided to a LIT.
  1. 57 % (5,500 of 9,660) of the consumer proposal filings for which earlier settlement advice was obtained from LITs that had connections with 2 large-volume debt management companies. These 2 companies represented 64 % of the overall LIT fees reported in 2016 consumer insolvencies filings for debt settlement advice before filing an insolvency proceeding with a LIT.
  1. Thirteen LIT companies, which included one national-level company, were discovered to have several LITs running in a constant and continual partnership with large-volume liability management companies.
  1. For roughly 50 individual LITs within these 13 companies, greater than 40% of their consumer proposal filings were sourced from these settlement companies. For roughly 20 of those LITs, greater than 90% of their consumer proposal work comes from with these 2 companies.

Insolvent debtors sourced through these third parties

Insolvent debtors sourced via these settlement companies had the tendency to go after consumer proposals instead of bankruptcy. On the surface, this is a good thing. As you will read further and in next week’s vlog, you will see the reason was so that these companies could charge in many ways the unwary consumers more money than they should be paying.

The OSB’s investigation showed that the debt settlement companies wrote up the necessary documents. The LITs never met the debtors beforehand.

The OSB investigation determined that:

  1. Before the LIT meeting, consumer borrowers connected and had 2 to 4 conferences with the management companies.
  1. The LIT relied upon the settlement companies’ staff to do all the work relative to the gathering, evaluating as well as confirming the borrower’s information and reviewing and recommending on the bankruptcy alternatives.
  1. In situations where the LIT had a regular relationship with the settlement companies, all facets of the procedure before declaring were normally executed at the offices of the management companies.
  1. Information needed for the filing was typically sent straight from the settlement companies’ management team to the LIT’s management team, usually soon before the meeting at which the consumer proposal filing was to occur.
  1. Debtor conferences with the LIT (a variety of which included the settlement company) varied in the period from 5 to 30 minutes. In some circumstances, the meeting took place just after submitting the proposal with the OSB.
  1. LITs normally met the borrower to file at the settlement companies’ premises.
  1. Sometimes, the authorizing of legal papers likewise happened in many casual areas as well as cities where the LIT did not have an authorized workplace.
  1. Interaction with borrowers on legal obligations, creditor meetings, evaluations by an Official Receiver, proposal changes and voting by creditors, was practically solely performed by the settlement companies’ management staff, that communicate with the debtor.
  1. The debtors reported that succeeding interaction throughout the management of their consumer proposal was additionally with the debt settlement company as opposed to with the LIT.

It appears that these LITs who had these close relationships with the debt settlement companies may have shirked some of their responsibilities under the BIA. These LITs had to sign off confirming to the OSB that they had done the necessary work. By relying upon the work done by unlicensed debt settlement companies, did the LIT really do the work that they are signing off for?

Debt settlement or consumer proposal Canada: So what does this mean?

In next week’s vlog, we will go into detail about what the effect was of all this. For now, you should know that a summary of the results for the consumer included:

  1. Consumers paid thousands of dollars more than they needed to.
  1. Unscrupulous debt management companies (and their cooperating LIT firms) talked consumers into high rate loans under the guise of shortening the time they were under an insolvency administration and improving their credit score.
  1. The debt settlement companies had no certification or experience to give the type of insolvency guidance they were providing.
  1. Legal documents contained countless errors and false attestations.
  1. Creditors received less than they were otherwise entitled to.
  1. Debtors had no idea of either their responsibilities under the process they were undertaking. They were not given the opportunity to experience one of the most important aspects of the Canadian insolvency system, financial rehabilitation.

Debt settlement or consumer proposal Canada: What should you do if you have too much debt?

Consult a LIT first and don’t go to one of the debt settlement companies. There is no federal government approved debt settlement companies. The only government approved debt settlement program is a consumer proposal.

We are debt professionals who will evaluate your situation and recommend which debt relief options are right for you. A consumer proposal is one option; there are others as well.

Contact Ira Smith Trustee & Receiver Inc. today for a free consultation. There is no need for you to pay fees to a debt settlement company when you can get the same information from us for free.

You’ll be in good hands and Starting Over, Starting Now you can be well on your way to living a debt free life.

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Brandon Blog Post

NO CREDIT HISTORY CAN BE AS DAMAGING AS A BAD CREDIT HISTORY

how to improve credit score 10

No credit history: Introduction

Like it or not, our lives are ruled by our ability to get credit (and hopefully use credit wisely). We need credit to buy a house or lease a property, buy or lease a car, have a credit card, get a line of credit and in many cases, get a job. Yes, ladies and gentlemen, many companies check your credit score before offering you a job. There are even online dating sites who match you according to your credit score. And, as we move towards becoming a cashless society, our ability to get access to credit will become even more important. So, having no credit history can hurt you in many ways.

No credit history: Unless you use credit you may not get credit

It’s a Catch 22, isn’t it? In order to set up even a limited credit history and get a credit score you have to use credit. Your credit worthiness is established by your ability to repay. If you pay for most things with cash or by cheque, you aren’t demonstrating your ability to repay. Therefore, if you apply for any type of loan and a credit check is done to decide credit worthiness, you won’t score well if you haven’t been using and repaying credit. Believe it or not, this may put you in the same boat as someone with a poor credit history or even a delinquent credit history.

No credit history: What is your credit score used for?

Your credit score is used to figure many things including:

  • Whether to extend credit
  • How much credit to approve
  • Whether to increase or decrease a customer’s credit limit
  • Determine the interest rate charged on a loan

There are now two ways you can get your credit score online free. One site is Credit Karma Canada and the other Borrowell.

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No credit history: The moral of the story is the best time to use credit is when you don’t need it

Many retirees think they don’t need credit anymore so they tend to pay by cash and cheque instead of credit. Then a situation arises where they need credit and they don’t have a credit history to show their credit worthiness. It’s never too late to set up a credit history. The easiest way is to have a credit card and use it (wisely). Even a secured credit card will work.

No credit history: Use credit wisely!

Using a credit card and paying off the monthly balance in full is not the same as accumulating credit card debt that you can’t afford. Using credit cards wisely can be convenient and beneficial. Credit card debt can ruin you financially.

If you’re dealing with credit card debt, or any debt that you can’t afford, you can count on The Ira Smith Team to set you on a path to a healthy financial future Starting Over, Starting Now. With our cumulative 50+ years of experience dealing with diverse issues and complex files, we deliver the highest quality of professional service. Contact us today.

 

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Brandon Blog Post

CURRENT INSOLVENCY ASSIGNMENTS: A WARNING TO ALL CREDITORS TO STAY IN THE PRESENT TO PRESERVE YOUR RIGHTS

Current insolvency assignments: Introduction

One of our current insolvency assignments teaches creditors a valuable lesson if they wish to take part in a debtor’s restructuring proposal. Every licensed insolvency trustee maintains a website listing their current insolvency assignments that are noteworthy or of public interest. Today I want to tell you about a recent case of ours. It is not of public interest, but it is noteworthy, especially for trustees and lawyers practicing in the insolvency area. Notwithstanding the large volume of receivership and bankruptcy case-law, the issue we came across was novel and never decided in Court before.

Current insolvency assignments: Mr. and Mrs. R

Mr. R was the sole shareholder of a company that serviced the construction industry. Both Mr. and Mrs. R were both Officers and Directors of the company. The company became insolvent, could not continue and ceased operating. Mr. and Mrs. R., in addition to their personal debts, which were significant, were now also faced with extensive claims against them in their capacity as Directors.

Current insolvency assignments: Consultation with Mr. and Mrs. R

Mr. and Mrs. R’s litigation lawyer referred them to us. We advised them that they should not declare bankruptcy, but rather attempt to avoid bankruptcy and restructure by filing a joint proposal under Part III Division I of the Bankruptcy and Insolvency Act (Canada) (BIA). Their had a complicated situation and they required an immediate stay of proceedings to deal with all the lawsuits against them.

Therefore, we first filed a joint Notice of Intention to Make a Proposal (NOI) on June 8, 2016. This first step provided Mr. and Mrs. R with a first 30-day grace period, where no creditor could begin or continue legal proceedings or enforcement against them while we were working with them to finish developing their restructuring proposal.

Current insolvency assignments: A certain creditor’s reaction

As Trustee, we served the NOI on all known creditors by ordinary mail, as we are required to under the BIA. We served one creditor, Royal Bank of Canada (RBC) at two addresses: i) legal counsel for RBC; and ii) BH, an agent for RBC that we regularly deal with. At the time of mailing out the NOI, we did not know if this agent would be on the file, but we provided them with notice out of to be extra cautious. We mailed the NOI on June 9, 2016.

The NOI sent to the creditors, including RBC, did not contain any proposal whatsoever, because it had not been written yet! This is standard for the filing of an NOI before the proposal.

In response to the NOI, by letter dated June 20, 2016, we received, from another agent for RBC that we had never dealt with before and who was not on our original mailing list, two proofs of claim, each in the amount of $438,434.31; one proof for each of Mr. and Mrs. R, individually.

This agent also sent a voting letter. It asked the Trustee to count RBC’s vote “with respect to the proposal” of Mr. and Mrs. R “against acceptance of the proposal made as of the 08th day of June, 2016.”

Current insolvency assignments: The Trustee’s reaction

On June 22, we wrote to the agent advising that the Trustee’s position was that because no proposal was yet in existence, the RBC “vote” was invalid and that RBC would have to offer a proper voting letter once it received the proposal. This was also sent to RBC’s counsel. The Trustee received no response to this communication.

Current insolvency assignments: The joint proposal of Mr. and Mrs. R

The debtors, Mr. and Mrs. R, filed a proposal July 7. We served the proposal on all creditors. The Trustee served RBC three ways to: i) RBC’s counsel; ii) RBC’s agent BH; and iii) the agent who wrote us the June 22 letter with enclosures. Our package included not only the proposal but notice of the first meeting of creditors and forms for proof of claim and a voting letter.

We received nothing further from RBC. The meeting proceeded on July 27. RBC did not attend. One creditor, with a claim of $278,561.29, attended and voted for the joint proposal. The joint proposal was deemed to have been accepted. Consistent with our position, as Trustee, we did not count the RBC June 22 “vote”.

(2017), 2017 ONSC 4234, 2017 CarswellOnt 12497, Rizzo, Re

Current insolvency assignments: Off to Court for approval

After the acceptance of a proposal by the requisite majority of the creditors, a licensed insolvency trustee must make application to Court, for approval of the proposal. The proposal is not binding until there is a valid and subsisting approval order of the Court.

Our motion for approval of the joint restructuring proposal of the debtors, Mr. and Mrs. R, was heard on August 9, 2016. RBC opposed. RBC opposed on the basis that its vote against the joint proposal was not counted. RBC’s vote, if counted, would have defeated the proposal and Mr. and Mrs. R would be bankrupt.

Our lawyer made various submissions, including, that the “vote” of RBC:

  • was not valid;
  • that RBC was advised of this and did nothing to file a valid vote; and
  • RBC failed to attend the meeting of creditors.

As indicated above, only one creditor voted; it voted in favour of the joint proposal.

RBC claimed its vote was valid and ought to have been counted. The Court did not go so far as to say a creditor could never lodge a valid vote against a proposal before receiving it. In this case, the Court agreed with us and found the vote was not valid. The Court went on to say that the Trustee was correct in not counting it.

Current insolvency assignments: What the Court said

The threshold question was whether the Trustee was right to reject RBC’s purported “vote.” Section 53 of the BIA permits a creditor to assent or dissent “from a proposal” before a meeting. Section 54 says the creditors may accept or refuse “the proposal” at the meeting. However, the statutory scheme for creditor voting assumes there is a proposal.

The Court found that:

  • the agent’s purported “vote” was on its face defective;
  • there was no proposal of June 8;
  • RBC or its agent had never seen the joint proposal when it voted;
  • the Trustee was right to reject an obviously defective “vote”;
  • the Trustee made its position abundantly clear to RBC’s agents; and
  • RBC had every opportunity to cure the defect and it failed to do so.

Current insolvency assignments: What the Court ordered

The Court found that:

  • the Trustee was correct in rejecting the June 22 “vote”; and
  • RBC was not denied due process.

The Court granted our motion for approval of the joint proposal and awarded us our costs.

Current insolvency assignments: What does this mean?

What this means is very simple. Make sure that in anything you do, you understand what the rules are, don’t take your eye off the ball and never fall asleep at the switch. If this creditor’s agent and legal counsel had merely reacted to the mailing of the joint proposal and cast a proper vote, we never would have ended up in this situation.

There was nothing wrong with the proof of claim (although it was filed unnecessarily in duplicate). All RBC’s agent or lawyer had to do when it received the joint proposal mailing, was take 2 minutes to complete a new voting letter and send it in to the Trustee. If they had done this simple step, assuming they voted against the joint proposal, Mr. and Mrs. R would now be bankrupts. Instead, they are making their proposal payments to the Trustee to restructure themselves and avoided bankruptcy.

Mr. and Mrs. R have each secured full-time employment, and are making more money than in the last few years of running their company.

Current insolvency assignments: What to do because of too much debt

Being a Director of a corporation can be risky business. If the corporation is insolvent and continues to carry on business, and you continue to act as a Director, it can land you in a personal financial mess.

Are you experiencing financial distress because of acting as a Director or otherwise? Is your business struggling and you can’t seem to find a way out?

If you’re struggling with debt for any reason Ira Smith Trustee & Receiver Inc. can help. We’re experts in dealing with debt. Give us a call today and take the first step towards conquering debt Starting Over, Starting Now.

2016 CarswellOnt 21774, 2016 ONSC 8192, IN THE MATTER OF THE PROPOSAL OF MARCO RIZZO AND ANGELA RIZZO

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CO-SIGN CREDIT CARD MEANING: CO-SIGNING ON A CREDIT CARD CAN BE RISKY BUSINESS

imageCo-sign credit card meaning: Introduction

Co-signing on a credit card for a family member or a friend may seem like the right thing to do. However, do you really understand what you’re getting into? Too many people do not fully understand the co-sign credit card meaning. This is risky business that can cost you a lot more than you bargained for.

Co-sign credit card meaning: What does co-signing on a credit card involve?

The co-sign credit card meaning is that when you co-sign on a credit card it’s the same as getting a credit card yourself. You are 100% responsible for the debt. It doesn’t matter that none of the charges are yours and that you are not the primary card holder. The minute you co-signed on the credit card, you guaranteed repayment. If the person you co-signed for doesn’t make a payment for any reason, you’re on the hook for the money – all of it.

Co-sign credit card meaning: Why are you being asked to co-sign?

If you’re being asked to co-sign on a credit card it’s typically for one of three reasons:

  1. The person asking you to co-sign has a poor credit history and is deemed too great a risk by the credit card company. This should give you cause to pause.
  2. The person is very young and has no credit history (and not earning enough money to be considered a good credit risk). This should also give you cause to pause.
  3. You are co signing for your child for a credit card with a very low limit as part teaching your child to use credit wisely and to help them get a good credit score. This includes the parent willing to cosign for a credit card for a child under the age of 18.

The only one of these three possibilities that we actually think is good is number 3; a parent willing to co sign a credit card with a very limited credit limit while monitoring their child’s use as part of giving a financial education.

Rather than co-signing, you may wish to consider helping your friend or relative get a secured credit card. Put up a modest deposit for them. At least this way you limit your potential exposure.

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Co-sign credit card meaning: How can co-signing on a credit card negatively impact you?

As we’ve already mentioned, you will be on the hook for the money if the primary card holder doesn’t pay. However, there are several other ways in which you can be negatively affected.

  1. If there are any late payments on the account for which you co-signed, that can also negatively impact your credit score.
  2. The credit card company can increase the amount of available credit on the card without with the co-signer’s permission (if the borrower is over the age of 21). You could be on the hook for a lot more money that you anticipated.
  3. Co-signed debt Is part of the calculations that decide whether you’ll get approved for any kind of borrowing, including a mortgage.

Co-sign credit card meaning: What to do if you have debt problems

Co-signing on a credit card can be risky business and land you in financial hot water. Are you experiencing financial distress as a result of co-signing on a credit card or otherwise?

If you’re struggling with debt for any reason Ira Smith Trustee & Receiver Inc. can help. We’re experts in dealing with debt. Give us a call today and take the first step towards conquering debt Starting Over, Starting Now.

 

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#VIDEO – CAUTION REQUIRED WHEN SEEKING HELP ON HOW TO PAY OFF DEBT IN TORONTO OR HOW TO IMPROVE CREDIT SCORE IN TORONTO ONTARIO

How to improve credit score: The Financial Consumer Agency of Canada alert

The Financial Consumer Agency of Canada (FCAC) is alerting people who could no longer stay current with their debt payments to be mindful when looking how to improve credit score.

Some businesses are misleading consumers by guaranteeing quick and easy solutions to help settle their financial debt or improve credit score. In many cases, consumers could wind up in a worse economic scenario compared to before they got aid.

How to improve credit score: Beware of credit repair firms

It’s crucial to understand that these firms:

  • cannot make sure they will solve your debt problems
  • could not swiftly and quickly repair your credit rating
  • need to not motivate you to get a high-interest loan as a service until other loan alternatives are available

How to improve credit score: What you should do before starting to repair your credit

Before registering for help to repay debt or repair or improve credit score, customers need to:

  • get suggestions from various reputable sources such as an accredited financial consultant, an approved credit counsellor or a licensed insolvency trustee
  • do inquiries and compare options
  • never be pressured to register right away
  • check out the small print and recognize the conditions before authorizing a contract or an arrangement
  • when seeking information on insolvency options, ask “Are you a licensed insolvency trustee?” Only a licensed insolvency trustee can administer options such as consumer proposals and bankruptcies.

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How to improve credit score: What the FCAC financial literacy leader warns

Jane Rooney, Financial Literacy Leader, FCAC warns:

“It’s important for consumers to understand what companies can and can’t do when offering services to help with debt repayment or credit repair. The Financial Consumer Agency of Canada has information to help consumers better understand the types of services available to them and where to get help. Having the necessary information is the first step to empowering consumers to make informed decisions and meet their financial challenges head on.”

How to improve credit score: Beware of credit repair firm tricks of the trade

Some firms or agencies declare that they can swiftly fix your credit report. It’s difficult to change or erase info that’s part of your credit rating, unless a detail is incorrect. Improving your credit history will take some time. You need to prove that your credit practices have enhanced by repaying your financial obligations on time.

Some firms could likewise offer you a loan suggesting it will certainly aid in fixing your credit history. The firm could assert that making timely payments on this loan will repair your credit report. When you sign up for this type of loan, you never in fact receive any cash because the company will tell you the financing will cover its services or programs. Rather, you make normal payments to the company to pay off the loan.

Be aware; this type of loan generally has a high rate of interest. This solution does not help cut any of your other financial obligations. You are required to keep making your payments on any other financial debts you owe. You could only be left with even more debt and no change to your credit rating.

How to improve credit score: What the Canadian government advises you to do

The Canadian government recommends that you speak to a licensed insolvency trustee. Although the challenges are enormous, they are not insurmountable. If you and your spouse have too much debt because of financial infidelity or for any other reason, you need to contact a licensed insolvency trustee (LIT) now. Through financial counselling, a LIT can aid in getting the resources you need to fix the root causes of the financial infidelity and to deal with the debt that you and your spouse cannot repay.

You need the Ira Smith Team. We’re experts in dealing with debt. No matter how you got into difficulty we can help return you to financial well-being. Contact us today and free yourself of debt Starting Over, Starting Now

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WEEKLY EXPENSES SHEET: DO YOU KNOW HOW MUCH YOU SPEND EACH WEEK?

weekly expenses sheet 0Weekly expenses sheet: Introduction

I recently read an article in Forbes that really shocked me. The article was about how aware we are about what we spend each week. These expenses could be anything – gas, utilities, groceries, meals out, movies, junk food… They asked three people to estimate how much their weekly expenses were and much to my surprise, they all underestimated by 30% – 40%. The results of this article are a neon billboard for the necessity and importance of a budget starting with a weekly expenses sheet, and a wakeup call to everyone still spending money without a budget and a plan.

Weekly expenses sheet: How many Canadians use a budget?

Only 40% of Canadians use a budget; however 90% of Canadians say that they have more debt today than they did five years ago (Practical Money Skills).

Weekly expenses sheet: Why are so many people reluctant to use a budget?

People think that using a budget will force them to cut out many of the things that they love to spend money on. And they work on the belief that better times are ahead – they’ll be making more money and some even believe that they are destined for a lottery win. Ignoring the realities of accumulating debt can spell financial disaster. People don’t want to face the harsh reality that they are spending more than they earn. A proper budget, which includes a weekly expenses sheet, would force those who overspend to deal with their debt reality.

Weekly expenses sheet: What can a budget do for you?

Budgeting can greatly improve your life and help you take control of your financial future. It will:

  • Calculate your monthly expenses – once you know what your monthly expenses are you can allocate money for those expenses
  • Prepare for the unexpected – budget for unforeseen expenses like an unexpected car repair bill or dental bill
  • Improve your credit score – sticking to your budget means that your bills will be paid on time, which means that your credit score will improve
  • Get out of debt/Stay out of debt – a budget will align your income with your expenses. Sticking to your budget will allow you to pay down your debts and/or stay out of debt

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Weekly expenses sheet: What to do if you have too much debt?

Are you still not using a budget and struggling with debt? For solid financial advice on what your options are for dealing with debt contact Ira Smith Trustee & Receiver Inc. Make an appointment for a free, no obligation consultation and Starting Over, Starting Now you can be on your way to a debt free life.

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ADVANTAGES AND DISADVANTAGES OF CONSUMER PROPOSALS TORONTO ON CANADA

Advantages and disadvantages of consumer proposals: Introduction

In this vlog, we answer the question “What are the advantages and disadvantages of consumer proposals?”.

Advantages and disadvantages of consumer proposals: Who is it for?

A Consumer proposal is a part of the Bankruptcy and Insolvency Act (BIA) found in Part III Division 2 of the BIA. It is available for people who do not owe more than $250,000 to their creditors, NOT including any mortgages or other loans registered against a principal residence.

The first test is being insolvent? What I mean by that is:

  1. are your financial obligations greater than the worth of your property?
  2. if you sold your assets you would not have enough funds to settle your financial commitments totally
  3. you are having problems making the total required payments to pay off in full each of your financial commitments monthly

advantages and disadvantages of consumer proposals

Advantages and disadvantages of consumer proposals: The Advantages

If so, then teaming up with a licensed insolvency trustee (LIT) acting as your consumer proposal administrator, the advantages are:

  1. Pay your creditors part of what you owe them over a period not greater than 60 months.
  2. Broaden the time you can use to pay off your financial debts.
  3. Stop the interest clock.
  4. Make monthly payments to the LIT for the benefit of your creditors that you can afford within your budget.
  5. If successful, you get to keep your assets.
  6. If successful, the cost of your consumer proposal can be thought of as being free. The BIA sets the fee of the LIT. The amount of payments you must promise to make to get your creditors to vote in favour ignores the fee of the LIT in performing that calculation.
  7. Remain free from bankruptcy.

You should think of a consumer proposal as obtaining an interest-free loan to combine your debts, pay only a part to get rid of them all. Your interest-free loan can have a term of no longer than 5 years.

Advantages and disadvantages of consumer proposals: The Disadvantages

There are not many disadvantages to a consumer proposal. The only one I can think of is that it is an insolvency proceeding under the BIA, so it will be and stay on your credit record for some time. But if you have so much debt you don’t know where to turn and you can’t pay it off, then your credit score has probably already taken a hit.

Get started now to gain back control of your life

If you’re thinking of a consumer proposal as an option to deal with your financial debts, telephone Ira Smith Trustee & Receiver Inc. now.

Our method is to set up an outcome for you where Starting Over, Starting Now becomes a reality, beginning the minute you walk through our door. You’re simply one telephone call away from leading a healthy, balanced and stress-free life again.

advantages and disadvantages of consumer proposals

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BANK STAFF SALES TARGETS: WHAT CAN CANADIAN CONSUMERS DO TO PROTECT THEMSELVES?

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Bank staff sales targets: Introduction

All hell broke loose when the CBC’s Go Public exposed a wide-spread banking problem – bank staff sales targets. The report stated that tellers try to meet their bank staff sales goals by signing customers up for products and/or services that they may not need.

Bank staff sales targets: It isn’t just one bank!

Although this article focused on the employees of one Canadian Chartered Bank who initially came forward to Go Public, the problem caused by bank teller sales goals is rampant across the banking industry and has been for some time. And, in fact it’s a badly kept secret that this is a common practice at every bank.

After the story broke, employees from all five of Canada’s big banks came forward to Go Public with stories of how they are required to up sell, trick and even lie to customers to meet unrealistic sales targets and keep their jobs.

Bank staff sales targets: Meet the sales goals or get written up, or worse

This isn’t just hearsay or a smear campaign against the banking industry; documents obtained by Go Public show tellers who fail to reach their sales goals are called “underperformers” and placed on a “Performance Improvement Plan”. This Plan involves daily coaching and monitoring by managers.

If sales performance doesn’t improve, warnings are given to underperforming employees that “employment could be terminated.” Approximately 1,000 emails from RBC, BMO, CIBC, TD and Scotiabank employees described the pressures they were under to meet sales revenue targets while being monitored weekly, daily or hourly. The message was loud and clear – it doesn’t matter how you hit your numbers as long as you do.

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Bank staff sales targets: Who is most at risk from these sales tactics?

Unfortunately, as with most financial schemes, the most vulnerable are the ones most at risk from these bank teller sales targets. Seniors and new immigrants are most likely to believe advice from their bank without further analysis. However, in our increasing common sales culture, we’re all at risk. After all, if you can’t trust your own bank to manage your money, who can you trust?

Bank staff sales targets: What should consumers do to protect themselves?

The sad truth is that you can no longer assume that your bank is your trusted financial advisor and has your best interests at heart. Consumers need to be vigilant. If a teller or a financial services advisor recommends a product or service ask questions:

  • How much does it cost?
  • What are the fees?
  • Why do I need it?
  • What will the financial benefit be to me?

Bank staff sales targets: Just say no

Very importantly, consumers need to learn how to say no. Don’t be bullied into signing up for products and/or services that you don’t need because of bank staff sales targets. Clearly there needs to be more regulation in the banking industry and hopefully there is an investigation underway.

If you are experiencing debt issues for any reason please come to a professional trustee. We’re strictly licensed and we can’t profit from giving bad advice. The Ira Smith Team is here to help. Our commitment to you is to bring value added solutions that fit your unique issues and circumstances. Contact us today and Starting Over, Starting Now you can conquer debt.

 

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#VIDEO – FINANCIAL INFIDELITY RECOVERY: RECOVERING FROM FINANCIAL DISHONESTY IN MARRIAGE#

Financial infidelity recovery: Introduction

According to Psychology Today, one of the causes of marital breakdown is dishonesty and betrayal. Dishonesty and betrayal can take many forms. It can include financial dishonesty in marriage. The purpose of this vlog is to look at this issue and how to get financial infidelity recovery in a marriage.

Financial infidelity recovery: Financial dishonesty in marriage

The first step is recognizing what financial infidelity meaning is. In its simplest form, financial infidelity is withholding from our partners about what we are doing with money that ultimately negatively affects the couple’s relationship. Examples of financial infidelity could be:

  • secret spending; perhaps as a result of an addiction;
  • secret savings account;
  • incurring secret debt; again could be a result of an addiction
  • cashing in a life insurance policy to raise needed funds secretly; and
  • letting a life insurance policy lapse due either to lack of funds or wishing to divert those funds without telling our partner

It is a lack of transparency with our partners about money in the relationship.

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Financial infidelity recovery: Signs of financial infidelity

Some of the more common signs of financial infidelity are that your spouse or partner:

  • wants to control all the finances and they don’t want any comments from you;
  • they also don’t want to share financial information with you;
  • you notice that there is a withdrawal from an investment account with no given explanation;
  • a lot of resistance to talking about money;
  • discovering the opening of new lines of credit or credit cards in your partner’s name, in your name or even jointly that you didn’t open yourself and had no knowledge of;
  • you find bills for items that you didn’t know about; and
  • your partner makes a big purchase without talking with you first

Such behaviour will most certainly erode trust in a relationship. This will create a huge blockage in every other aspect of the marriage, including intimacy.

Financial infidelity recovery: Healing financial infidelity

In order to even attempt financial infidelity recovery, there has to be willingness by either spouses or partners. Both will have to overcome the shame, humiliation and rage that the financial infidelity causes. The couple needs to understand what the real reason for the financial infidelity is and be dedicated to fixing that. Is it the result of an addiction such as shopping, gambling, drugs or alcohol abuse? Is it a result of a business loss or failure in the spouse’s business?

The next step is to have a team approach. Spouses or partners need to have complete access jointly to all accounts. One spouse should not be allowed to withdraw funds without the other one’s cooperation. The team has to set a realistic budget together, follow it and watch the cash flow plan. One of the cornerstones of the budget has to be to work towards being debt free. Finally, constant and open communication is key.

It may be that you will need a financial counselor for credit counselling to increase the couple’s financial knowledge. The counselor can also make sure that the recovery plan is realistic and implemented. Financial infidelity recovery is neither simple nor easy, but, it is possible if both partners are willing and committed.

Financial infidelity recovery: What to do if you cannot overcome your debts

The debt created by financial infidelity is more emotionally troubling than normal debt. The reason is one of the spouses had nothing to do with incurring that debt, yet they may be just as liable for its repayment. This creates extra challenges in attempting to resolve that debt.

Although the challenges are enormous, they are not insurmountable. If you and your spouse have too much debt because of financial infidelity or for any other reason, you need to contact a licensed insolvency trustee (LIT) now. Through financial counselling, a LIT can aid in getting the resources you need to fix the root causes of the financial infidelity and to deal with the debt that you and your spouse cannot repay.

You need the Ira Smith Team. We’re experts in dealing with debt. No matter how you got into difficulty we can help return you to financial well-being. Contact us today and free yourself of debt Starting Over, Starting Now.

FINANCIAL INFIDELITY 13

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YOU MUST PREPARE YOURSELF FOR DIVORCE FINANCIALLY BEFORE YOU WALK DOWN THAT ROAD

prepare yourself financially for divorcePrepare yourself for divorce financially: Introduction

There is nothing good about divorce yet Canadians continue to engage in the practice in record numbers. The divorce statistics are staggering. According to Statistics Canada:

  • In Canada, 48% of marriages end in divorce (Ontario’s rate of divorce is 42.1%)
  • The average length of a marriage nationally is 14 years

According to the Vanier Institute of the Family, the divorce rate for second marriages is even higher at over 50%.

Prepare yourself for divorce financially: Not just emotionally

We all know how emotionally gut-wrenching divorce can be on couples and their children. But, how many couples are financially ready for divorce? Unless you’re like Gwyneth Paltrow and Chris Martin (each mega-millionaires in their own right) who “consciously uncoupled” or like the rich and famous with iron-clad prenuptial agreements, do you have any idea of what a divorce can cost?

Prepare yourself for divorce financially: Cost of divorce in Canada

According to the results of Canadian Lawyer’s 2015 Legal Fees Survey:

  • $1,353 – the national average cost for an uncontested divorce
  • $31,330 – national average cost of a two-day trial
  • $56,439 – national average cost of a five-day trial
  • $81,958 – the national average cost of a seven-day trial

Prepare yourself for divorce financially: It costs more for two to live separately than together

Now the shock is about to set in… How are you going to manage your finances separately? Do you know what your monthly expenses are? Do you have a budget? If not, you’re going to need one now.

In all likelihood, you aren’t going to be able to maintain your former lifestyle. If you do, you may land up in a situation where you are bleeding money and accumulating mountains of debt. Are you carrying over debt from your marriage and trying to maintain your old lifestyle?

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Prepare yourself for divorce financially: What should you do if you have too much debt?

This is a difficult time but burying your head in the sand isn’t the answer. The best option is to deal with debt with the help of a professional trustee. This is especially true in a separation or divorce situation as one of the very few situations that are NOT stopped by an insolvency filing stay of proceedings are family law proceedings.

Many divorce lawyers do not understand the relationship between provincial family law and the federal Bankruptcy and Insolvency Act (Canada). You are best to consult with a licensed insolvency trustee before taking any action. You need to financially prepare for divorce.

Although your particular situation may seem catastrophic, we offer peace of mind that you will get through this and you will be able to start over. Contact Ira Smith Trustee & Receiver Inc. today. Starting Over, Starting Now you can take back control of your life and be debt-free.

Call a Trustee Now!