Tag: legal advice

Categories
Brandon Blog Post

IF PARENTS DECLARE BANKRUPTCY WHAT HAPPENS TO THE CHILDREN? NAVIGATING YOUR FAMILY’S FINANCIAL RESET SUCCESSFULLY

if parents declare bankruptcy what happens to the children
if parents declare bankruptcy what happens to the children

if parents declare bankruptcy what happens to the children

If Parents Declare Bankruptcy What Happens To The Children? How Bankruptcy Affects Family Dynamics

If parents declare bankruptcy what happens to the children? Imagine your world turning upside down when your parents tell you they’re facing serious money trouble. Bankruptcy isn’t just a grown-up problem—it can shake up an entire family, leaving teenagers worried about their home, their future, and what comes next.

How Bankruptcy Impacts Teens and Families

When parents declare bankruptcy, it’s more than just a financial setback. This challenging situation can touch nearly every aspect of a teenager’s life, from family relationships to future opportunities. Many young people find themselves navigating unexpected emotional and practical challenges during this time.

What Happens?

Bankruptcy doesn’t mean families are doomed. Instead, it’s a legal process that helps parents get a fresh start with their finances. For teens, this can mean:

  • Potential changes in living arrangements
  • Shifts in family financial planning
  • Emotional stress and uncertainty about the future
  • Possible impacts on university or career plans

Understanding the Bigger Picture

While bankruptcy sounds scary, it’s not the end of the world. Many families successfully rebuild after financial challenges. The key is understanding the process, supporting each other, and staying focused on long-term goals.

Key Takeaways for Teens

Your parents’ bankruptcy doesn’t define your future. Open communication with family is crucial. There are resources and support available. Financial challenges can be overcome with the right approach.

In this Brandon’s Blog post, we’ll unpack the multifaceted impacts of a parent’s bankruptcy on their children—financially, emotionally, and beyond. We’ll draw from recent data and expert opinions to help you understand and navigate this difficult family situation.

If Parents Declare Bankruptcy What Happens To The Children? Psychological Effects on Children: Inheritance and Legacy Loss

Bankruptcy is a challenging journey that can reshape a family’s financial landscape. For children, this process brings complex emotional and financial implications that extend far beyond simple monetary concerns. Let’s explore how a parent’s bankruptcy can impact a family’s future and what children need to understand.

Understanding Inheritance and Family Assets

When parents face financial difficulties, the potential inheritance children might have expected can change dramatically. This unexpected shift can create uncertainty and stress for the entire family.

Key Inheritance Considerations

  • Bankruptcy prioritizes debt repayment over asset preservation
  • Family assets like homes or savings could be eliminated
  • Financial planning will require immediate reevaluation

    if parents declare bankruptcy what happens to the children
    if parents declare bankruptcy what happens to the children

If Parents Declare Bankruptcy What Happens To The Children? The Emotional Toll of Losing a Family Home

A family home represents more than just a physical space—it’s a symbol of stability, security, and cherished memories. Losing this anchor can profoundly impact children’s emotional well-being and sense of security.

Potential Impacts of Home Loss

  • Disruption of established social networks
  • Potential school changes
  • Emotional stress from relocation
  • Challenges in maintaining family continuity

Navigating Equity Rules in Bankruptcy

Bankruptcy proceedings involve complex equity rules that can determine the fate of family properties. Understanding these regulations is crucial for families experiencing financial challenges.

Critical Equity Considerations

  • Properties with significant equity will be sold to repay debts
  • Legal frameworks prioritize creditor repayment
  • Potential complete loss of family real estate assets is a possibility

Financial Stress: A Broader Perspective

Research indicates that financial stress affects a significant number of families. According to recent studies, approximately 36% of parents experience substantial financial pressures that could potentially lead to bankruptcy.

Potential Silver Linings

  • Bankruptcy can provide a financial reset
  • Reduced parental financial stress
  • Opportunity for improved financial management
  • Potential for future financial stability

Emotional and Financial Recovery

While bankruptcy presents immediate challenges, it can also create opportunities for financial renewal and family growth. The process, though difficult, can lead to:

  • Improved financial literacy
  • Reduced debt burden
  • A fresh start for family finances
  • Enhanced long-term financial planning

“Bankruptcy isn’t the end of a financial journey—it’s a challenging but potentially transformative beginning.”

Empowering Families Through Understanding

Knowledge is the most powerful tool during financial traoe.

Remember, every financial challenge is an opportunity for growth, learning, and a more secure future.

If Parents Declare Bankruptcy What Happens To The Children? Child Support and Spousal Support Obligations: What Happens During Bankruptcy?

Navigating the complex financial obligations during bankruptcy can be challenging, especially when child support obligations and spousal support are involved. It is not that far-fetched to consider that the toll financial ruin takes on a family could lead to divorce. Understanding how these critical financial responsibilities intersect with bankruptcy is crucial for families facing financial difficulties.

The Unique Status of Family Support Obligations

Bankruptcy law treats child support payments and spousal support differently from other types of debt. These obligations are considered priority debts, which means they cannot be discharged or eliminated through bankruptcy proceedings.

Key Protections for Dependents

  • Child support payments and spousal support are typically non-dischargeable
  • Bankruptcy cannot stop existing support payment requirements
  • Court-ordered support continues regardless of financial status

How Bankruptcy Impacts Support Payments

In short, the impact of bankruptcy on support payments is simple – in one word – NONE! When a parent files for bankruptcy, the impact on child support amounts and spousal support doesn’t vary.

Bankruptcy Liquidation

  • Does not eliminate existing support obligations
  • Child support arrears cannot be discharged
  • Ongoing support payments must continue

Proposal Restructuring

  • Provides a restructuring plan for debt repayment
  • Allows parents to catch up on child support arrears
  • Offers a structured approach to managing financial responsibilities

Protecting the Financial Interests of Children

The legal system prioritizes the financial well-being of children, ensuring that support obligations remain intact during bankruptcy proceedings.

Critical Considerations

  • Support payments take precedence and must be made
  • Failure to pay can result in severe legal consequences
  • Courts have mechanisms to enforce support obligations

Navigating Support Obligations During Financial Stress

Bankruptcy doesn’t provide an escape from family support responsibilities. Parents must continue to meet their financial obligations to their children and former spouse.

  • Communicate openly with support recipients
  • Seek legal advice to understand your specific obligations
  • Explore payment modification options if financial circumstances change
  • Maintain transparency with family court systems

“Bankruptcy is a financial tool, not an excuse to abandon family responsibilities. Child support and alimony remain critical obligations that must be honored.”

Proactive Steps for Parents

If you’re facing bankruptcy and have support obligations:

  • Communicate with both your Licensed Insolvency Trustee and family law lawyer to make sure that you understand your responsibilities
  • Develop a comprehensive financial plan
  • Maintain open communication with all parties involved

While bankruptcy presents significant financial challenges, it does not absolve parents of their support responsibilities. By understanding the legal framework and maintaining a commitment to family obligations, parents can navigate this difficult process while protecting their children’s financial interests.

Remember, your children’s well-being should always be the top priority, even during challenging financial times.

if parents declare bankruptcy what happens to the children
if parents declare bankruptcy what happens to the children

If Parents Declare Bankruptcy, What Happens to the Children? Emotional Repercussions -Understanding a Child’s Perspective During Family Bankruptcy

Bankruptcy isn’t just about numbers on a page—it’s a deeply personal journey that can shake a family to its core. As a licensed insolvency trustee, I’ve seen firsthand how financial challenges impact not just bank accounts, but the emotional world of children.

Understanding the Emotional Rollercoaster

When a family faces bankruptcy, children experience a whirlwind of feelings that go far beyond financial spreadsheets. Imagine your entire world feeling uncertain—that’s what kids go through during this challenging time.

What Children Feel

Kids don’t just see bankruptcy as a money problem. They experience:

  • A deep sense of vulnerability
  • Worry about their family’s future
  • Fear of losing their home
  • Anxiety about changing relationships

The Invisible Challenges Children Face

Your family home is more than just walls and a roof. It’s a sanctuary of memories, safety, and belonging. When financial stress threatens this sanctuary, children feel like their entire world is shifting.

The Real Impact on Kids

Bankruptcy can trigger some serious emotional responses in children:

  • Increased anxiety and mood swings
  • Potential feelings of shame
  • Disruption to their sense of identity
  • Concerns about social connections

Supporting Your Children Through Financial Stress

As a parent, you have the power to help your children navigate this challenging time. Here are practical strategies to support your family:

Communication is Key

  • Have open, honest conversations using age-appropriate language
  • Reassure your children about family love and unity
  • Maintain consistent daily routines
  • Create new family traditions that build stability

School and Social Life: What to Expect

Moving or financial changes can disrupt your child’s school and social world. Potential challenges include:

  • Academic performance gaps
  • Feeling isolated from friends
  • Increased anxiety about changes

Long-Term Emotional Considerations

The psychological impact of bankruptcy can affect children during critical developmental stages. Parents should watch for:

  • Behavioural changes
  • Emotional withdrawal
  • Potential long-term stress management challenges

Professional Support Matters

Don’t hesitate to seek professional counselling if you notice significant emotional changes in your child. Therapists can provide valuable coping strategies.

The Silver Lining: Positive Transformation

While bankruptcy feels overwhelming, it can also be a pathway to financial healing. Reducing financial strain can create a more stable emotional environment at home.

Remember: Your family’s strength isn’t measured by your bank account, but by how you support each other through life’s challenges.

Final Thoughts for Parents

Bankruptcy is a process, not a permanent state. With compassion, communication, and strategic planning, your family can emerge stronger and more resilient.

If Parents Declare Bankruptcy, What Happens to the Children? Financial Impact on Children

When parents declare bankruptcy in Canada, children naturally worry about how this will affect their daily lives. Understanding these impacts can help families navigate this challenging time together.

Seizure of Children’s Personal Belongings

Many children and teens worry that their items might be taken when their parents declare bankruptcy. The good news is that in most cases, children’s belongings are protected.

In Canada, bankruptcy trustees (now officially called Licensed Insolvency Trustees) generally do not seize items that belong to a child. This includes:

  • Clothing, toys, and personal electronics
  • Sports equipment and musical instruments
  • Educational materials and school supplies
  • Items purchased with a child’s own money

However, certain situations can create complications. If parents purchased expensive items for their children shortly before filing for bankruptcy, these may be scrutinized. For example, an expensive jewelry item bought just before filing could potentially be viewed as an attempt to hide assets.

To protect children’s belongings, it helps to have documentation showing when and how these items were acquired, especially for valuable possessions.

Child Income and Its Role in Bankruptcy

Children’s earnings and income are generally separate from their parents’ bankruptcy proceedings, but there are important considerations:

For teenagers with part-time jobs, their income remains their own and is not considered part of the parent’s bankruptcy estate surplus income calculation. This means:

  • Wages from after-school or summer jobs belong to the teen
  • Money in bank accounts in the child’s name remains protected (subject to understanding the source of any recent deposits)
  • Scholarships and educational grants directed to the child stay secure

However, parents should be aware of certain situations that could affect children’s finances:

  • If parents have been depositing large sums into children’s accounts before filing, these transfers will be reviewed as potential preferences that a Trustee could successfully attack
  • Joint accounts between parents and children might be temporarily frozen during the bankruptcy assessment until the source of funds is fully understood
  • Regular large gifts of money from parents to children shortly before bankruptcy will be questioned

The key factor is timing and intent. Regular deposits to a child’s education fund over many years are viewed differently than sudden transfers made just before filing for bankruptcy.

For families facing financial difficulties, being transparent with the Licensed Insolvency Trustee about children’s assets and income helps ensure appropriate protections remain in place.

if parents declare bankruptcy what happens to the children
if parents declare bankruptcy what happens to the children

If Parents Declare Bankruptcy, What Happens to the Children? Transforming Financial Futures and Finding Hope After Bankruptcy

Breaking Free from the Debt Cycle

Picture the moment when a tremendous weight lifts from your shoulders—that’s the profound relief many families experience after filing for bankruptcy. This isn’t a story of failure, but a strategic reset for your financial life. As a licensed insolvency trustee, I always get excited when I see this happening to families that I am able to help.

The True Meaning of Financial Liberation

Bankruptcy isn’t the end of your financial journey. It’s a new beginning that offers:

  • A fresh start away from overwhelming debt
  • An opportunity to rebuild financial foundations
  • A chance to develop healthier money habits
  • Renewed hope for economic stability

Understanding the Financial and Emotional Landscape

Before bankruptcy, many families felt trapped in a relentless cycle of financial stress. Imagine endless bill payments, sleepless nights, and the constant anxiety of making ends meet. These challenges drain both emotional and financial resources, creating a seemingly impossible situation.

The Transformative Power of a Financial Reset

Bankruptcy provides a powerful opportunity to:

  • Break free from cyclical debt
  • Gain mental and emotional clarity
  • Refocus on meaningful financial goals
  • Create a strategic path forward

Rebuilding Your Financial Future

After bankruptcy, families discover an unexpected freedom. The elimination of crushing debt opens doors to:

  • Building emergency savings
  • Exploring strategic investment opportunities
  • Setting long-term financial goals
  • Improving overall financial literacy

More Than Just Numbers: The Emotional Impact

Financial stress doesn’t just affect bank accounts—it impacts entire family dynamics. Bankruptcy can be the first step toward creating a more stable, nurturing home environment.

Unexpected Benefits

  • Reduced household tension
  • Improved family communication
  • Enhanced emotional well-being
  • Opportunity for collective financial education

Before vs. After: A Comparative Snapshot

Before Bankruptcy

  • Constant financial anxiety
  • Limited financial flexibility
  • Overwhelming debt burden
  • Restricted economic opportunities

After Bankruptcy

  • Reduced financial stress
  • Increased budgeting capabilities
  • Clear financial planning
  • Potential for economic recovery

“Bankruptcy isn’t an end—it’s a strategic financial reset that offers families a second chance at economic stability,” Dr. Emma Reynolds.

Developing Financial Resilience

The journey after bankruptcy is about more than just numbers. It’s an opportunity to:

  • Learn from past financial challenges
  • Develop robust budgeting skills
  • Create sustainable financial habits
  • Build a more secure future

As financial expert Ashley Morgan wisely states, “Bankruptcy can be a legitimate strategy to regain control of your finances and future.”

If Parents Declare Bankruptcy, What Happens to the Children? Frequently Asked Questions: Children and Parental Bankruptcy

Will We Lose Our Home and Have to Move?

Bankruptcy doesn’t automatically mean losing your family home. The outcome depends on:

  • How much equity (value minus mortgage) exists in the home
  • Your province’s exemption rules
  • The specific type of bankruptcy filing

Many families can keep their homes during bankruptcy, especially if there isn’t significant equity or if they can make arrangements with the trustee. If moving becomes necessary, we help families plan this transition carefully to minimize disruption to children’s schooling and social connections.

How Will This Affect Our Family Finances and My Future?

When parents declare bankruptcy, the family budget typically changes. This might mean:

  • Less spending on non-essential items
  • More careful planning for expenses
  • Possible changes to vacation or entertainment plans

However, a parent’s bankruptcy doesn’t define a child’s future opportunities. Many financial aid programs, scholarships, and grants for education look at the student’s situation, not the parents’ bankruptcy history. Open family discussions about these changes help everyone adapt and plan together.

What Happens to My Potential Inheritance?

Bankruptcy may reduce or eliminate assets that parents might have passed down. Family savings and investments might be used to pay creditors. However, rebuilding financial stability after bankruptcy is possible, and many parents create new financial plans that include future provisions for their children.

Will My Personal Belongings Be Taken?

In Canada, belongings that belong to children are generally not affected by a parent’s bankruptcy. These protected items typically include:

  • Clothing and personal items
  • Toys and games
  • Electronics for school or personal use
  • Sports equipment
  • Musical instruments
  • Items purchased with a child’s own money

Trustees are concerned with adult assets, not children’s possessions.

Is My Part-Time Job Money Protected?

The money you earn from your part-time job and keep in your bank account is generally separate from your parents’ financial situation. This includes:

  • Your wages and savings
  • Scholarships and grants in your name
  • Money given specifically to you as gifts

Just be careful about large deposits from parents right before they file for bankruptcy, as these might be questioned.

How Might This Affect Me Emotionally?

Financial stress affects the whole family. Children might experience:

  • Worry about the future
  • Anxiety about potential changes
  • Concern about social standing with friends
  • Confusion about what bankruptcy means

It’s important to maintain open communication, stick to familiar routines, and sometimes seek additional support from school counsellors or family therapists if needed.

What About Child Support and Alimony?

Bankruptcy does not eliminate a parent’s responsibility to pay child support or alimony (spousal support). These are considered priority debts that continue regardless of bankruptcy status. Courts still expect these payments to be made on time.

Can Bankruptcy Help Our Family?

Despite the initial challenges, bankruptcy often provides families with:

  • Relief from overwhelming debt stress
  • A fresh financial start
  • The improved household atmosphere once financial pressure decreases
  • Opportunities to develop better money management skills
  • Protection from collection calls and creditor actions

Many families emerge from bankruptcy with improved financial habits and a more secure future.

if parents declare bankruptcy what happens to the children
if parents declare bankruptcy what happens to the children

If Parents Declare Bankruptcy, What Happens to the Children? Getting Professional Support

If your family is considering bankruptcy, speaking with a Licensed Insolvency Trustee can help clarify how it might affect everyone involved. We provide confidential consultations to explain the process and answer questions from all family members.

Remember that bankruptcy is a financial tool for recovery—not a reflection of personal worth or parenting ability. Many successful families have used bankruptcy to overcome temporary financial setbacks and build stronger futures.

If Parents Declare Bankruptcy, What Happens to the Children? Conclusion

While bankruptcy may initially seem like a setback, it can catalyze positive change. The relief from debt opens doors to better financial management. Parents can redirect their focus toward savings and investments, creating a more stable home environment. Understanding the potential benefits of bankruptcy can help you navigate this challenging situation. It’s essential to recognize that this process can lead to improved budgeting and planning, ultimately transforming your financial future. Embrace this opportunity for growth and renewal.

I hope you’ve found this if parents declare bankruptcy what happens to the children helpful. If you or someone you know is struggling with too much debt, remember that the financial restructuring process, while complex, offers viable solutions with the right guidance.

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

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

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

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

if parents declare bankruptcy what happens to the children
if parents declare bankruptcy what happens to the children
Categories
Brandon Blog Post

INSOLVENCY LAWYER: OUR COMPLETE GUIDE WHY YOU NEED ONE BOTH BEFORE AND AFTER FILING BANKRUPTCY IF YOU WANT TO START A BUSINESS

insolvency lawyer

Insolvency lawyer introduction

So you’ve been through a tough time with debt, and you’re thinking about starting a business? Well, the goal of the Canadian insolvency system is to allow people in financial distress to bounce back, even after dealing with bankruptcy or a consumer proposal.

In this Brandon’s Blog, I discuss why you need to hire an insolvency lawyer:

  • if you are in business and need to file for bankruptcy; or
  • if you need to file bankruptcy and then wish to start a business.

The time to hire the insolvency lawyer is before you do a bankruptcy filing. First, let us go over a few basic definitions.

Insolvency Lawyer: Bankruptcy and Insolvency in Canada

Here are a few basic definitions you need to know about the Canadian insolvency process.

Bankruptcy: This is like a fresh start where you get rid of most if not all of your unsecured debts. It’s sometimes called “straight bankruptcy,” or a “bankruptcy liquidation” where a licensed insolvency trustee (formerly called a bankruptcy trustee) is appointed to sell most of your assets to pay back the people you owe money to.

But, if the only assets you own are those that are exempt from seizure, called exempt assets, then there aren’t any assets to sell. In that event, the case is closed without taking any assets. You can usually keep basic stuff like your clothes and a reasonably priced car. You can also keep most of your RRSP – you only lose the contributions made within the 12 months before filing bankruptcy.

Consumer Proposal: This is a way to reorganize your debt and make a deal with your creditors. Instead of getting rid of everything, you agree to a payment plan, usually lasting three to five years, to pay back some of what you owe. This way you get to keep your assets and once you make all the payments you promised to make to the licensed insolvency trustee, the rest is written off by your unsecured creditors.

In Canada, many people who own businesses operate as sole proprietors, meaning that legally, your personal finances and your business finances are connected. This means that if you file for bankruptcy or a consumer proposal, it will affect both your personal and business finances. If your business is set up as a separate legal entity as a corporation, this might not be the case, and you might have more flexibility.insolvency lawyer

Understanding the Role of Insolvency Lawyers

Insolvency lawyers help people and companies navigate the tricky world of debt and bankruptcy. Here’s a breakdown of what they do:

Advising on Bankruptcy Alternatives

Insolvency lawyers explore all the options before jumping into bankruptcy. They might suggest things like debt restructuring or repayment plans. For example, they could help a business negotiate with its creditors to lower payments or give them more time to pay.•

Debt Restructuring Guidance◦

Sometimes, instead of declaring bankruptcy, you can reorganise your debts. This means making a plan to pay back what you owe in a way that’s more manageable. Insolvency lawyers help create these plans, making sure they’re fair for everyone involved. They’ll work to find solutions so that businesses can continue operating while repaying debts.•

Advocacy in Insolvency Proceedings◦

If bankruptcy is the only option, insolvency lawyers act as your advocates in court. They help you understand the bankruptcy process and represent you in court. They make sure your rights are protected.

For individuals, it means helping them keep essential property while dealing with debt.

Why is this important? Bankruptcy and insolvency can be super stressful. Insolvency lawyers can guide you through the process and help you make the best decisions for your future. They can explain complex stuff like bankruptcy and consumer proposals. They can also provide guidance that can help a business owner keep their business operating.

Bottom line: Insolvency lawyers provide essential support to individuals and businesses facing financial difficulties. They offer expert advice, help navigate complex legal processes and situations, and advocate for their clients’ best interests. All of this is done with lawyer-client privilege intact.

Difference Between Insolvency Lawyers and Licensed Insolvency Trustees

Let’s break down the roles of two key players when dealing with debt: Insolvency Lawyers and Licensed Insolvency Trustees. They both help when you’re facing financial difficulties, but they do it in different ways. Think of it like this: one is like a legal guide, and the other is like a financial manager.

What’s the difference? It’s all about their roles and responsibilities in the insolvency process.

Licensed Insolvency Trustees

LITs are licensed and regulated by the Canadian government. They are the only insolvency professionals in Canada legally authorised to administer bankruptcies and proposals to creditors.

Financial Managers: Think of them as financial managers who oversee the insolvency process. They assess your financial situation, explain your options by giving you practical advice (like bankruptcy or a consumer proposal), and administer the process that you decide to file.

Key Responsibilities: This includes managing your assets, dealing with creditors, and making sure everything follows the rules of the Bankruptcy and Insolvency Act.

Insolvency Lawyers

Insolvency lawyers are legal professionals who understand insolvency laws and specialise in providing insolvency legal services.

Legal Guides/Advocates: They provide legal advice and represent you in court if needed. They ensure your rights are protected throughout the insolvency process.

Key Responsibilities: This includes advising you on your legal options, helping you choose the best course of action, negotiating with creditors, and representing you in legal proceedings.

Here’s a table to simplify it:

Feature

Licensed Insolvency Trustee

Insolvency Lawyer

Role

Administrator/Financial Manager

Legal Advisor/Advocate

Licensing

Licensed and regulated by the Canadian government through the Office of the Superintendent of Bankruptcy.

Licensed lawyer

Key Functions

Administers bankruptcy and proposal processes, manages assets, deals with creditors.

Provides legal advice, negotiates with creditors, represents you in court.

Focus

Managing the financial process of insolvency.

Providing legal guidance and protecting your rights.

When to engage

When considering bankruptcy or a consumer proposal.

When you need legal advice, are facing legal action from creditors, or want to explore all your options before filing.

Can they offer advice?

Trustees can explain the implications of the available debt relief options, including bankruptcy, but they must remain impartial.

Insolvency lawyers can provide legal counsel and advocate on your behalf.

Why is this important? Knowing the difference helps you get the right kind of help when you need it. If you’re just starting to explore your options, a Trustee can give you an overview. If you need someone to fight for your rights or provide legal advice, a lawyer is the way to go. Sometimes, you might even need both!

Real-World Example: Imagine a small business owner in Toronto is drowning in debt. They might start by talking to a Licensed Insolvency Trustee to understand their options for filing a proposal or bankruptcy. If they are facing lawsuits that if successful, the type of debt would not be discharged by a bankruptcy, they need an insolvency lawyer to fight it. The person may also need advice on how their business could continue if they need to file for bankruptcy. Finally, they might need to hire an insolvency lawyer to represent them in bankruptcy court.

Bottom line: Trustees manage the process of insolvency, while insolvency lawyers provide legal guidance and advocacy. Both play crucial roles in helping individuals and businesses navigate financial difficulties in Canada.insolvency lawyer

Insolvency Lawyer: Can You Really Start a Business After Bankruptcy?

Absolutely! According to an insolvency lawyer, it doesn’t prevent you from starting a business. However, it might be more challenging to get funding and handle the money side of things when starting up, and that’s true for anyone starting a business. Financial institutions are not going to fund a business run by an undischarged bankrupt!

In addition to how you are going to fund a new business while being an undischarged bankrupt, you also have to think of things like how will your business be formed, i.e. a sole proprietorship or a corporation. If a corporation, who is going to be the director and who is going to be the shareholder. As an undischarged bankrupt, you cannot be a director and you do not want to be the shareholder.

Bankruptcy will show up on your personal credit report for up to 7 years from the date of filing. If your business files for bankruptcy it could stay on your business credit report for much longer.

But, keep in mind that many people who file for bankruptcy have probably already seen their credit scores drop due to debt, missed payments, and so on. So, bankruptcy can actually be a way to reset your finances and start rebuilding your credit and, potentially, launch a new business.

As you can see, going bankrupt and then starting a business can be a very tricky endeavour. There are many legal issues to consider and get advice on given your financial situation. That is why if you are contemplating filing bankruptcy and then wish to start a business, you need to speak to an insolvency lawyer before doing anything.

What Happens If You Have a Business When You File for Bankruptcy?

If you’re a sole proprietor and file for bankruptcy, the licensed insolvency trustee is entitled to take control of your business assets. The Trustee will value the assets and sell them. It is unlikely that the Trustee will operate your sole proprietorship.

If you have a company, the business isn’t automatically dragged into your personal bankruptcy. The Trustee gets ownership of the shares you hold in the corporation, which may have no value for creditors. However, as stated above, an undischarged bankrupt person cannot continue to act as a director of a corporation.insolvency lawyer

Things to Consider When Star ing a Business After Bankruptcy or a Consumer Proposal

Separate Legal Entities: Consider forming a corporation to legally separate your personal and business finances. This means that your business’s problems won’t automatically drag down your personal finances and vice versa. If the business is separate from you, your bankruptcy does not automatically mean that the business has to close.

Money Matters: Create a detailed financial plan with a realistic budget. Be careful with taking on expensive debt. It’s important to focus on the cost of credit, not just the minimum payment.

Business Partners: Choose your business partners very carefully, as their actions could impact your finances. Make sure you have a written agreement in place for your business relationships and consider that your partner’s credit can impact your ability to get loans.

Types of Business Bankruptcy in Canada

Bankruptcy (Liquidation): If you have a business and have to file for bankruptcy, it usually means the business will shut down. For a proprietorship, a Trustee will sell the business assets as well as any non-exempt personal assets not used in the business. If the business is in a corporation, then the shares owned by the bankrupt person will need to be valued and sold by the Trustee.

Reorganization: If a business wants to keep operating, it can work out a deal with its creditors to repay debts while it continues operating. This would be done through a commercial proposal.

Important point: If you’re a sole proprietor, the business and you are legally seen as one and the same. This makes a reorganization type of bankruptcy easier since you are treated as a person, not a business.insolvency lawyer

How to Start Rebuilding Credit

Get accounts that report to credit bureaus: You want to have accounts that will show up on your credit reports.

Pay on time: Make sure you pay all of your bills on time.

Keep debt low: Try to keep your borrowing low.

Credit-Building Tools

Secured Credit Cards: These require a deposit, and it’s returned to you when you close the account. They are easier to get with bad credit.

Net-30 Accounts: Some suppliers allow you to pay in 30 days, and they report the payments to credit bureaus.

Keep an eye on your credit reports: This will allow you to track your credit building progress.

Insolvency Lawyer Conclusion

I hope you enjoyed this insolvency lawyer Brandon’s Blog. Do you or your company have too much debt? Are you or your company in need of financial restructuring? The financial restructuring process is complex. The Ira Smith Team understands how to do a complex restructuring. However, more importantly, we understand the needs of the entrepreneur or someone with too much personal debt.

You are worried because you are facing significant financial challenges. It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern debt relief options to get you out of your debt troubles while avoiding the bankruptcy process. We can get you debt relief freedom using processes that are a bankruptcy alternative.

The stress placed upon you is huge. We understand your pain points. We look at your entire situation and devise a strategy that is as unique as you and your problems; financial and emotional. The way we take the load off of your shoulders and devise a plan, we know that we can help you.

We know that people facing financial problems need a realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team.

That is why we can develop a restructuring process as unique as the financial problems and pain you are facing. If any of this sounds familiar to you and you are serious about finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.

Call us now for a free consultation. We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

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

Categories
Brandon Blog Post

INSOLVENCY ADVISORY SERVICES: STANDOUT HELP DOES NOT NEED HORRIFYING HIGH COSTS

the purpose of the image is to show a business person who company has entered insolvency in need of financial restructuring

This is our last blog post for 2024. We will be back with more in January. Happy Holidays and a Happy and Healthy New Year to all of our readers.

Insolvency Advisory Services: Introduction

Insolvency is a complex financial situation with significant legal and practical implications. This Brandon’s Blog post explores the key aspects of insolvency law in Canada, drawing on authoritative sources to provide a clear and informative overview.

As the pandemic-induced economic rollercoaster continues, I recently read an article in The Globe & Mail Report on Business about the world of insolvency advisory services. On the one hand, professionals like me help to fix corporate car crashes during crises, seemingly thriving off others’ misfortunes. On the other hand, our services can lead struggling businesses to a new beginning, saving jobs and families. Not just the workers or the owners, but all the businesses that rely upon that one business. Let’s dive into this fascinating landscape where financial insolvency wizardry collides with corporate despair.

What is Insolvency?

Insolvency refers to a situation in which an individual or a company is unable to fulfill their financial obligations as they become due. In Canada, the legal framework offers several mechanisms to manage insolvency, with the goal of balancing the interests of both debtors and creditors.the purpose of the image is to show a business person who company has entered insolvency in need of financial restructuring

The Insolvency Legal Framework

Key Legislation in Canadian Insolvency Law

The Bankruptcy and Insolvency Act (BIA) serves as the fundamental legislation governing insolvency in Canada. This federal law establishes the protocols for addressing bankruptcies and proposals, ensuring a fair and systematic approach for all parties involved.

In conjunction with the BIA, the Companies’ Creditors Arrangement Act (CCAA) offers a framework specifically designed for the restructuring of insolvent corporations, particularly those with debts exceeding $5 million. Both the BIA and CCAA are administered by the Office of the Superintendent of Bankruptcy (OSB), which operates under the Department of Innovation, Science and Economic Development Canada. The OSB is essential in overseeing the insolvency process, licensing insolvency professionals, and maintaining public records related to insolvency matters.

Provincial Laws and Their Impact on Insolvency

Federal legislation primarily regulates the fundamental aspects of insolvency in Canada; however, provincial laws significantly influence this area, particularly concerning property and civil rights. Specific issues addressed by provincial legislation include:

The establishment of security interests The handling of absconding debtors Regulations surrounding bulk sales Provisions related to fraudulent conveyances

This interaction between federal and provincial laws results in a comprehensive legal framework for managing insolvency in Canada.

Roles and Responsibilities

Licensed Insolvency Trustees are licensed professionals authorized by the OSB to administer bankruptcies, handle proposals, and act as monitors or receivers. Insolvency Trustees play a pivotal role in guiding debtors and creditors through the insolvency process, ensuring compliance with legal requirements.

Access to Insolvency Information

The OSB provides a searchable database of bankruptcy and insolvency records that is available to the public for a fee. This database includes detailed information on various insolvency proceedings, such as bankruptcies, proposals, receiverships, and proceedings under the CCAA. Furthermore, the publication “Insolvency Insider Canada” offers current news and legal updates on trends related to insolvency in Canada.

Insolvency Advisory Services: The Profit Motive

Have you ever thought about how much insolvency advisers bill out per hour? The article stated that downtown Bay Street bankruptcy legal counsel and licensed insolvency trustees charge up to $1,300 per hour for their services. Are these fees justified? Or are they merely a symptom of a broken system?

Understanding Senior Claims

In insolvency cases, fees charged by advisers are classified as senior claims. This means they get paid before other creditors. When a company admits insolvency and makes a filing under either the BIA or the CCAA, these advisers work hard to navigate the complex legal landscape.

But who benefits the most? According to The Globe & Mail article:

QhArLafzTFjEAABEAABEAABEAABEAABEGh6Av8fLpPHirSCnkMAAAAASUVORK5CYII=

Adviser fees have been climbing steadily over the years. While companies going through insolvency struggle with debt, they may very well be paying unnecessarily high fees.

The Financial Implications

What does this mean for businesses? When firms find themselves in the dire straits of insolvency, they owe a mountain of money. The debt piles up, and the cost of hiring pricey advisers only adds to their woes. In many cases, legal and financial advisers are feasting on the carcass of struggling companies.

The Cold Reality

This narrative reveals the harsh truth: while companies drown in debt, they may very well be paying too much for their advisers. Insolvency advisers are essential for navigating bankruptcies and restructurings, but many companies may be paying too much for the help they need. No doubt there are certain regulated industries or overly complex businesses that need the minds and skills of the downtown Bay Street advisers. But that is not the majority of Canadian businesses.the purpose of the image is to show a business person who company has entered insolvency in need of financial restructuring

Insolvency Case Study: Do Our Fees Hold Up In Court?

We are involved in the liquidation case of two companies. Certain stakeholders, including the Estate Trustees of the Estate of a deceased shareholder, disagreed with the fees we and our legal counsel charged. A court hearing concerning our fees as a court-appointed liquidator and those of our legal counsel was held in the winding-up case.

As liquidator we sought approval for substantial fees which were challenged by the respondents, shareholders of the companies, as disproportionate to the assets involved. The judge considered various factors including the complexity of the case, the time spent, and the results achieved, ultimately approving the fees, citing prior court approvals of the liquidator’s actions and rejecting the respondents’ arguments as a collateral attack. The decision highlights the principles of fairness and reasonableness in determining court officer fees.

What factors influenced the assessment of the fairness of our liquidation fees?

The court evaluated several factors to assess the fairness of the liquidation fees charged by the Liquidator and their counsel. Ultimately, the judge ruled in our favour based on the following considerations:

  • Nature, Extent, and Value of Assets: The Liquidator was responsible for liquidating two companies that presented moderately complex tax and accounting challenges.
  • Complications and Challenges Encountered: The Liquidator faced numerous obstacles, including concurrent family and estate proceedings, conflicts between the Estate Trustees and another shareholder, and multiple adjournments. Additionally, delays in court proceedings instigated by the Estate Trustees contributed to increased costs.

These delays included:

  1. The conversion of the liquidation proceedings from voluntary to court-supervised, happened almost a year after the liquidation proceedings began.
  2. The proposed sale of was delayed because the Estate Trustees continued accepting new orders despite the initial agreement to not accept new orders during the voluntary liquidation. They requested time to procure an offer to sell the company.
  3. Further delays were caused when the Estate Trustees proposed to remove one of the companies from the liquidation but failed to do so. The Liquidator was then required to notify customers that business operations would cease once current orders were completed.
  4. The Estate Trustees switched counsel, which caused adjournments and increased time spent on the case.
  • The degree of assistance provided by the company. The Estate Trustees were confrontational and slow to provide information, which made the Liquidator’s job more difficult.
  • The time spent. The liquidation proceedings were protracted due to issues between the stakeholders.
  • The Liquidator’s knowledge, experience, and skill. Both the Liquidator and its counsel were found to have significant knowledge and experience in corporate and insolvency matters.
  • Diligence and thoroughness. The Liquidator produced three comprehensive reports and affidavits for the motion. Their invoices provided a clear understanding of the thoroughness of their work.
  • The responsibilities assumed. The Liquidator was responsible for extensive activities, which were outlined in its reports and approved by the court. These activities included monitoring business operations, selling one of the companies’ primary assets, engaging various professionals, establishing and monitoring a claims process, and taking steps to wind down an active business.
  • The results of the efforts. The Liquidator successfully converted the voluntary liquidation into a court-supervised process. They managed the companies’ finances, initiated a claims process, and made interim distributions.
  • The cost of comparable services when performed prudently and economically. The rates charged by the Liquidator and its counsel were comparable to those charged by other providers in the Toronto market. Although the respondents argued that the fees were disproportionate to the value of the businesses, the court ultimately ruled that the fees were fair and reasonable given the factors outlined above.

The Mechanics of Corporate Insolvency

Understanding corporate insolvency and bankruptcy law can feel like navigating a maze. Why is there a need for specialized expertise in this field? Let’s dive into this complex world.

1. The Ins and Outs of Bankruptcy Law

Bankruptcy law is not just a set of rules; it’s a detailed framework designed to address financial distress. At the core is the legal process that aims to protect debtors while ensuring creditors get as much back as possible. This is where specialized knowledge comes in. It is critical to understand the nuances, strategies and strategizing, litigation processes, and the potential financial ramifications of each decision.

Think about it: would you trust someone who has only dabbled in the subject to handle a significant financial crisis? I wouldn’t. Expertise in this area enhances efficiency. A knowledgeable insolvency adviser can streamline the process and avoid costly missteps.

Also, this specialized knowledge often leads to reduced competition. But there are alternatives; there are experienced insolvency professionals who operate in lower-cost boutique firms like mine. Their offices may not be as fancy as the Bay Street crowd, but, what do you want to pay for. Their knowledge and expertise or their office furnishings and high rent?

2. A Day in the Life of a Licensed Insolvency Trustee Adviser

What does a licensed insolvency trustee adviser actually do day-to-day? Most of our time on corporate restructuring files involves analyzing company financials and negotiating with creditors. Navigating through heaps of paperwork is part of the gig, too. Advisors must also attend court hearings and meetings with various stakeholders, always looking to find the best possible outcome.

Typical Tasks Include:

  • Drafting essential documents and filings.
  • Conducting asset evaluations.
  • Coordinating with legal teams and financial analysts.

On any given day, a licensed insolvency trustee adviser may switch gears between solving legal puzzles and crunching numbers. It’s a mixture of law, finance, and a bit of psychology when negotiating to save distressed businesses.

3. Key Players in Corporate Insolvency

Corporate insolvency involves several key roles, each contributing to the process in distinct ways:

  • Legal Counsel: Legal professionals represent the interests of their clients and assist in navigating the complex legal landscape associated with insolvency proceedings. Court-
  • Court-Appointed Receivers/Insolvency Trustees: These individuals are tasked with managing the assets of the company during the insolvency process, ensuring proper handling and distribution according to legal guidelines.
  • Monitors: Monitors oversee the restructuring process to prevent the company from entering receivership or bankruptcy. They ensure that the company adheres to all legal requirements throughout the process.

Each of these roles is essential in facilitating a fair and orderly insolvency process. Together, they work towards achieving the best possible financial recovery while upholding the integrity of the legal framework.

4. Why Experience Really Matters

Experience can make or break an insolvency case. A seasoned insolvency professional will have seen various crises unfold, equipping them with the knowledge of what strategies work. They can anticipate challenges and react swiftly to changes in circumstances.

Also noteworthy is that judges usually have a high regard for seasoned practitioners. The more experienced the insolvency adviser, the more likely they will get favourable outcomes – and that’s crucial. After all, when dealing with millions on the line, would you want a novice watching your back?

Ultimately, the world of corporate insolvency is a ripe field for those with the right set of skills and experience. But remember, it’s about guiding businesses through some of the most turbulent waters they face.the purpose of the image is to show a business person who company has entered insolvency in need of financial restructuring

The Ripple Effect of Rising Insolvency Advisories

In today’s economic climate, the rise in insolvency advisory fees is an issue that’s hard to ignore. It touches everyone – from entreprenurial businesses trying to stay afloat to investors scratching their heads over diminished returns.

Entrepreneurial Businesses and Higher Fees

As advisory fees rise, entrepreneurs are generally shut out of being able to restructure. That is one of the reasons why Ira Smith Trustee & Receiver Inc. was established. We offer the highest quality of service that rivals any Bay Street licensed insolvency trustee firm. However, due to our unique boutique formula, our hourly rates are slightly less than half of those charged by downtown Toronto Bay Street insolvency professionals.

We know that many entrepreneurs find themselves squeezed by Bay Street hourly rates, unable to afford the very advice meant to save their companies. That is why we can earn a fair return for our services in running our insolvency advisory business, without killing off the company we are trying to save because of higher fees. Downtown firms don’t think we can, but with the combined experience of Ira and Brandon Smith totalling over 60 years, we know how to and have done complex corporate restructuring. We are also one of those experienced seasoned firms that judges recognize as such. Our clients also give us 5-star reviews!

The Role of Insolvency Advisers

Despite the high costs, insolvency advisers play a crucial role in reviving struggling companies. When firms like Groupe Dynamite sought protection during tough times, savvy advisers helped them navigate those murky waters. Their expertise can mean the difference between a successful turnaround and a grim closure.

Lending and Creditworthiness

But there’s a catch. Rising advisory fees may also undermine a company’s creditworthiness. Imagine a lender reviewing a firm burdened by steep fees. They might hesitate, fearing that funds directed to advisers are funds that won’t go toward debt repayment. Essentially, high fees could close the door on future lending.

Myths Surrounding Formal Insolvency Proceedings

It is essential to clarify some misconceptions regarding the beneficiaries of formal insolvency proceedings. A common belief is that companies undergoing restructuring are guaranteed to be saved; however, this is not always the reality. Once advisers get to work, there are situations where we realize that most of the company isn’t salvageable. This emphasizes the importance of critically assessing the situation as quickly as possible so that unnecessary steps are not taken using up scarce resources.

In certain cases, such as that of Groupe Dynamite case, advisers have successfully revitalized struggling brands. Conversely, there are situations where advisers do earn fees from a business that ultimately cannot be sustained. Therefore, an effective insolvency assessment must identify these challenges from the outset in every case. It is crucial to ensure that a successful restructuring does not come at the expense of overwhelming financial burdens.

A candid and transparent dialogue between the insolvency advisor and company management is necessary before initiating any restructuring efforts. This collaboration is vital for determining the viability of the company and the best course of action moving forward.

The Ethical Dilemma In Insolvency Advisory

Navigating the complexities of insolvency involves not only strategic calculations but also significant ethical considerations. A critical question arises: at what point does one profit from another’s misfortune? The high fees charged by downtown Toronto Bay Street insolvency advisers, which can exceed $1,300 per hour, certainly prompts the question. This raises an important discussion about whether these professionals are genuinely aiding in recovery or merely capitalizing on the difficulties faced by their clients.

Insolvency advisory fees are typically structured to be front-loaded, meaning that the initial phases of an insolvency case require significantly more effort from advisers. This is necessary as they work to thoroughly understand the various issues at hand. Consequently, the execution of the devised strategy tends to be less intensive than its formulation.

This structure can exacerbate the financial strain on already struggling businesses, leading to concerns about the fairness of such practices. Therefore, transparency regarding fees is not merely a preferable quality but an essential component of ethical practice in insolvency advisory. Business owners deserve clarity to make informed decisions during challenging times.

Finding Balance

Achieving a balance between risk and reward is essential for long-term success in business. While it can be tempting to chase higher gains, it’s important to carefully consider the potential consequences. Understanding the balance between your business’s viability and the associated advisory fees is key to making informed decisions.

As we navigate the challenges ahead, let’s stay vigilant and compassionate, ensuring we take care of our businesses and those who support us in maintaining them.

I encourage you to take a moment to reflect on these points and prepare not just for success, but for stability in the ever-changing marketplace. Together, we can build a resilient foundation for the future.

Insolvency in Canada: FAQs

1. What is insolvency and how does it impact businesses in Canada?

Insolvency happens when an individual or a company is unable to fulfill their financial obligations when they are due. This situation can have important legal and practical implications, and it is guided by a detailed set of federal and provincial laws in Canada. For businesses facing insolvency, there are several potential outcomes, such as increasing debt, legal actions from creditors, and the possibility of closure. However, it’s important to remember that there are options available to help navigate this challenging situation, and seeking advice from financial professionals can be a valuable step forward.

2. What key legislation governs insolvency in Canada?

The BIA serves as the primary federal legislation governing bankruptcies and proposals in Canada. It establishes a structured process to protect the interests of all parties involved in insolvency proceedings. In contrast, the CCAA is specifically designed for the restructuring of insolvent corporations, with debts that exceed $5 million. Additionally, provincial laws contribute to the framework surrounding bankruptcy, particularly in matters related to property rights and fraudulent conveyances.

3. What role do Licensed Insolvency Trustees play in insolvency proceedings?

Licensed Insolvency Trustees are professionals authorized by the OSB to oversee bankruptcy proceedings, manage proposals, and act as receivers or monitors. Their responsibilities include offering guidance to both debtors and creditors throughout the legal processes, ensuring compliance with applicable regulations, and working to balance the interests of all parties involved.

4. Why are insolvency advisory fees considered a concern, especially for entrepreneurial smaller businesses?

Insolvency advisory services, though crucial in navigating complex legal and financial landscapes, often come with high hourly rates. This can be a significant burden for struggling businesses, particularly smaller enterprises, as these fees are prioritized as senior claims, meaning they are paid before other creditors. Some argue that these fees add to the financial strain and may not always guarantee a successful recovery.

5. What are some alternatives to high-priced Bay Street insolvency firms?

While large Bay Street firms dominate the insolvency landscape, boutique firms like ours offer comparable expertise and experience at lower hourly rates. Smaller Firms like ours prioritize practical solutions and cost-effectiveness, all delivered with a large dose of empathy. This makes us a viable alternative for businesses seeking quality advice without exorbitant fees.

6. How can businesses prepare for potential insolvency and mitigate risks?

Organizations can effectively mitigate the risks associated with insolvency by prioritizing strong financial management practices. This entails diligent monitoring of cash flow, diversifying revenue sources, maintaining adequate reserves, and establishing a contingency plan to address potential financial challenges. Timely identification of warning signs, along with seeking guidance from qualified professionals, can greatly enhance the likelihood of recovery.

7. What ethical considerations arise in the field of insolvency advisory services?

The power dynamics and the potential for substantial fees in insolvency advisory raise significant ethical considerations regarding the profit derived from a company’s financial difficulties. It is crucial to ensure transparency in fee structures and demonstrate a sincere commitment to prioritizing the client’s best interests over the pursuit of maximum profit. Such practices are essential for upholding ethical standards within the industry.

Insolvency Conclusion: Navigating the Stormy Waters Ahead

As I reflect on the unpredictability of the business world, it strikes me how everything can change in an instant. What appears stable today can be rocky tomorrow. We’ve seen thriving companies face insolvency as consumer habits shift overnight. There are many such examples. They soared high, only to crash due to rising interest rates impacting consumer spending. It’s a stark reminder that no one is immune to the tides of economic downturn.

For business owners, the key is preparation. Have you considered what your plans are if faced with potential insolvency? It’s essential to develop mitigation strategies. Keeping an eye on cash flow, diversifying income streams, and maintaining a strong financial buffer can save a business from downfall. By creating a robust financial foundation, we can cushion ourselves against unforeseen storms.

I hope you enjoyed this insolvency Brandon’s Blog. Do you or your company have too much debt? Are you or your company in need of financial restructuring? The financial restructuring process is complex. The Ira Smith Team understands how to do a complex restructuring. However, more importantly, we understand the needs of the entrepreneur or someone with too much personal debt.

You are worried because you are facing significant financial challenges. It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to get you out of your debt troubles while avoiding the bankruptcy process. We can get you debt relief freedom using processes that are a bankruptcy alternative.

The stress placed upon you is huge. We understand your pain points. We look at your entire situation and devise a strategy that is as unique as you and your problems; financial and emotional. The way we take the load off of your shoulders and devise a plan, we know that we can help you.

We know that people facing financial problems need a realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team.

That is why we can develop a restructuring process as unique as the financial problems and pain you are facing. If any of this sounds familiar to you and you are serious about finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.

Call us now for a free consultation. We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

The information provided in this Brandon’s Blog is intended for educational purposes only. It is not intended to constitute legal, financial, or professional advice. Readers are encouraged to seek professional advice regarding their specific situations. The content of this Brandon’s Blog should not be relied upon as a substitute for professional guidance or consultation. The author, Ira Smith Trustee & Receiver Inc. as well as any contributors to this Brandon’s Blog, do not assume any liability for any loss or damage resulting from reliance on the information provided herein.the purpose of the image is to show a business person who company has entered insolvency in need of financial restructuring

Categories
Brandon Blog Post

HOW TO SAFEGUARD SENIORS FROM GRIPPING SENIOR FINANCIAL EXPLOITATION

senior

Senior financial abuse: Introduction

Recent allegations made by 90-year-old US Senator Dianne Feinstein regarding the trustees for her deceased husband’s estate sheds light on the alarming prevalence of senior financial abuse. Katherine Feinstein, who instituted legal proceedings on behalf of her mother, alleges that Feinstein is being cut out of millions. In this Brandon’s Blog, we will not only examine the gravity of this issue but also present effective strategies to safeguard senior citizens from the clutches of scams and exploitation.

As the population continues to age and technology advances at a rapid pace, we must address the vulnerabilities that seniors face in today’s society. The alarming rise in cases of senior financial exploitation necessitates focused attention on preventative measures and assistance.

Through Brandon’s Blog, we aim to inform and educate readers on the multifaceted nature of elder financial abuse while offering concrete solutions to mitigate its impact. From recognizing warning signs to establishing secure financial structures, we will unravel the complexities surrounding this pressing issue.

We believe that by equipping individuals with knowledge and empowering them with practical solutions, we can create a widespread awareness that will ultimately curtail the incidence of senior financial exploitation. Join us as we unravel the layers of this critical topic and strive toward a safer future for our senior citizens.

What is elder abuse?

Elder abuse is any action or inaction that threatens the health or well-being of an older adult. Some people call it senior abuse or abuse of older adults. Older adults have the right to live safely, to be treated with respect, and to manage their affairs. When someone violates those rights and causes harm, that’s abuse. Often the person causing the harm is someone in a position of trust, like a family member, friend, or caregiver.

All abuse is an abuse of power and a violation of trust in a relationship. The harm can be physical, emotional, financial, sexual, or involve some other breach of a person’s rights and freedoms. Neglect is also a form of abuse.

If the abused person suffers from a mental impairment or some form of cognitive impairment, they may or may not realize that their rights have been violated. The person causing the harm may or may not know that their action or inaction is abusive. Bystanders might suspect something is wrong, but be unwilling to get involved or unsure about what to do.

Abuse can happen to anyone at any age. It is a myth that abuse only happens to dependent, frail, elderly people, but elder abuse is the topic in this Brandon’s Blog. Abuse often happens to capable, fully functioning older adults through the use of false pretenses. People are usually ashamed to find themselves in an abusive relationship. They might ask themselves: How did this happen to me? How did I get here?senior

Importance of protecting seniors from financial exploitation

Shielding elderly people from financial exploitation is of utmost relevance due to several reasons. To start with, elders are commonly more susceptible to fraud as well as exploitation due to factors such as diminished cognitive abilities, seclusion, and reliance on others for financial monitoring. This makes them very easy targets for fraudsters seeking to manipulate their savings as well as assets.

Senior citizens have actually worked hard throughout their lives to build economic safety and security. Succumbing to financial abuse cannot just lead to substantial economic losses but also to psychological distress and a lessened quality of life. As a result, it is vital to apply effective methods and also raise recognition to prevent senior financial exploitation to guard the financial health of our seniors.

Types of senior financial abuse

Fraudulent investment schemes

Fraudulent investment schemes are a common example of senior financial exploitation. These cunning ploys frequently set their sights on the more vulnerable elders, enticing them with alluring yet phony investment prospects. Tactics such as high-pressure sales tactics or too-good-to-be-true false stories, promising large returns, are artfully employed by wrongdoers to deftly maneuver the unsuspecting seniors. It rests upon the shoulders of the seniors and their family members to remain knowledgeable regarding these devious stratagems. The danger signals must be readily recognized, and essential measures must be undertaken to safeguard their hard-earned cash and possessions.

Credit card fraud and misuse

The realm of senior financial abuse unveils a tapestry woven with the threads of credit card misuse and manipulation, casting a shadow upon the vulnerable elderly. Within this intricate web, the unsanctioned utilization of a senior’s banking card unfurls—a symphony conducted by caregivers, kin, or assorted individuals, each choreographing their moves to orchestrate personal gain. An alternate strain of this discord emerges—a fraudulent overture composed to secure all requisite personal intricacies, orchestrating the grand theft of credit through the intricate dance of identity deception.

Concurrently, the stage may also witness the deliberate mishandling or extravagant depletion of an elder’s monetary reservoir, setting the scene for a precarious financial downfall. The ripples of these actions reverberate with a magnitude that resonates, birthing enduring economic fissures within the lives of the elderly. Recognizing the symphonies of credit card abuse necessitates the discernment of dissonant notes—a medley of peculiar charges decorating the canvas of the bank card, abrupt deviations in pecuniary rituals, and the enigmatic vanishing of funds.

Bank account mismanagement and exploitation

Amidst the labyrinthine complexities of the financial landscape, the mishandling and exploitation of bank accounts evidenced by unknown bank withdrawals showing up on bank statements emerge as a distinct manifestation of abuse, weaving a narrative intricate and multifaceted. This particular transgression entails the unsanctioned utilization of a senior individual’s bank account by another, driven by personal interests. Within this realm, lies the potential for funds to be withdrawn devoid of proper authorization, while the intricate tapestry of account particulars can be deftly manipulated.

There exists a pressing need to institute protective measures and comprehensive guidelines, serving as bulwarks against the perils of such misconduct. Awareness stands as a sentinel, with individuals poised to recognize the faintest tremors of these illicit activities, sounding the alarm and promptly conveying any semblance of dubious behaviours.

Identity theft and fraudulent activity

Within the intricate fabric of contemporary society, the spectre of identity theft and fraudulent activity stir as pressing concerns. This form of abuse is often not caught because the victim is embarrassed that they fell for a scam robbing them of their details and then their money.

In the clandestine realm of identity theft, personal information such as Social Insurance numbers and credit card details, are ruthlessly snatched, igniting a chain reaction of unauthorized acquisitions and the clandestine birth of accounts set up from the person’s identity. This modern marauder, garbed in digital shadows, breaches the sanctity of personal information, wielding the stolen arsenal to orchestrate a symphony of financial deceit.

It begins through conduits as diverse as the digital ether of phone and email scams, the beguiling façade of spurious charities, and the seductive allure of investment schemes. To fight this form of senior abuse, there must be a vigilant alliance between seniors, their family and their financial institutions. Regular account scrutiny, the safeguarding of personal financial documents and legal documents, and familiarizing oneself with the lexicon of common swindles, must be forged.

These steadfast actions become the shield and the sword, to protect against the potential ravages of financial abuse. Through their orchestrated defence, the vulnerable seniors find refuge from the looming storm, protected from the adverse winds of treacherous economic tempests.

Power of attorney misuse

Misuse of a power of attorney is another type of senior abuse. When people are provided authority through powers of attorney, they are entrusted with significant financial responsibility as well as decision-making power on behalf of the senior. Sadly, some people abuse this authority, using their power for individual gain instead of the advantage of the elderly.

This can consist of embezzlement, theft, as well as unapproved withdrawals or transfers of funds. Seniors and also their family members need to comprehend the risks associated with the power of attorney abuse as well as take steps to protect themselves from monetary exploitation. This might entail thoroughly picking as well as vetting potential power of attorney agents, developing safeguards as well as limitations on their authority, and also consistently keeping track of financial activity.

Unauthorized sale or transfer of assets or property

Yet another facet of this unfortunate mistreatment takes shape in the realm of unapproved transactions involving the trade or transference of holdings or possessions that rightfully belong to the elder person. This brand of maltreatment is especially harsh, for its consequences reverberate in a manner that can strip seniors of the lifelines that sustain their existence.

Vulnerability is often enhanced through illness, seclusion, and sundry other variables, providing the fertile ground upon which this act of transgression takes root.

Once again, senior citizens need education. Knowledge of the art of financial deception and scams is of prime importance. Diligence in establishing protective measures acting as a shield against this type of abuse is imperative. Heightened awareness and the safeguarding structures that can be built will guard against this kind of senior financial abuse.

Use of funds for self-benefit by a caregiver or relative

This particular strain of maltreatment happens when an individual occupying a place of trust exploits the financial position of an elderly person for their exclusive enrichment. The onus to comprehend the gravity of this predicament and protect against it falls upon both the senior and their family, to understand the gravity of this issue and initiate measures of due vigilance to forestall its occurrence.senior

Senior financial abuse: Unusual financial transactions or requests

Recognizing one of the pivotal indicators signalling potential exploitation of senior finances is detecting occurrences of rather unusual and perplexing financial transactions. It’s in these instances that the elderly might find themselves embroiled in monetary dealings of significant magnitude that, in comparison to their usual monthly transactions, appear strikingly atypical or even suspicious. These dealings, casting a wide net, might encompass substantial and recurrent cash withdrawals, perplexing movements of financial assets whose rationale eludes immediate comprehension, or the unforeseen emergence of new strange faces.

Elderly individuals are susceptible to being swayed towards participating in financial dealings that stray rather far from the conventional, such as bestowing money upon newfound companions or cashing investments to use those funds for strange new purposes.

Senior financial abuse: Sudden changes in financial situation

A senior’s economic circumstance might suddenly go through significant shifts, which can be a warning of financial exploitation. These changes might take the type of rather uncommon withdrawals or transfers entailing substantial amounts of money. Conversely, one may observe swift and also unforeseen adjustments made to bank and investment accounts or insurance policies, or even come across unpredicted applications for loans. To guarantee the proper protection of their assets, elderly people must make it a practice to consistently analyze their financial records and proactively look for the assistance of financial experts.

The duty falls upon both relatives and caretakers entrusted to take personal care of a senior citizen, to maintain a consistent state of watchfulness concerning any type of unusual adjustments or abnormalities within the senior’s financial picture. The early identification of such changes could efficiently ward off any additional attempts at financial exploitation, therefore protecting the financial wellness of their cherished senior.senior

Senior financial abuse: Isolation from friends and family

A strong signal of elderly financial exploitation happens when seniors remove themselves from relationships with family and friends and become isolated. Elderly people captured within the web of financial abuse very often, in a sudden and overwhelming fashion, remove themselves from the orbits of their social relationships, severing the strings that once connected them to friends and family.

This self-imposed seclusion, a calculated maneuver created by the perpetrator, works as a device of dominance over the older person, making it easy to keep the machinations of financial resources manipulation from prying eyes. It is incumbent upon family, friends and professional advisors to watch for this and be proactive when the signal is sent. The cultivation of an atmosphere for repeating social engagements, combined with the perpetuation of unblocked methods for dialogue with the aged, collectively works as an instrument for the unveiling as well as thwarting attempts at this kind of financial dominance.

Senior financial abuse: Physical or emotional abuse

Physical or emotional abuse leads to further financial exploitation of the elderly. This signal is complex, encompassing the art of intimidation, the spectre of threats, or overall intimidation. These vulnerable adults, captured within the clutches of this kind of risk of abuse, may present a range of emotions – stress, anxiety, as well as overall withdrawal from engagement.

By remaining watchful, family members and caregivers can catch this signal in its early stages and help build protection into the lives of seniors, restraining the dangerous advancement of financial abuse by another person. Within the nurturing cocoon of trust and also the embrace of emotional nourishment, this type of makeover promotes empowerment within the hearts of the elderly, strengthening them against the hazards that depend on the shadows making them susceptible to exploitation.senior

Senior financial abuse: Promoting awareness and education

In the world of guarding senior individuals against the clutches of financial abuse, the critical approach focuses on skillfully pushing education and learning. It becomes paramount to gear up the senior with insights into typical frauds and maneuvers executed by monetary predators, thus equipping them with enhanced vigilance and self-preserving capacities. Accomplishing this necessitates the creation of curricula, workshops, and also proactive community support, which equip elders with essential tools that allow them to identify the danger signals so that they can take on preemptive actions to protect their assets.

The urgency to consistently prioritize the creation of education and learning cannot be overstated, as it stands as the cornerstone for making sure that our seniors have the strength and also imperviousness to become victims of elder abuse.

Senior financial abuse: Encouraging seniors to seek independent advice

Empowering our senior population to look for independent advice stands as a crucial stride toward preventing the destructive grip of senior financial exploitation. Via the energetic promotion of this practice, a gateway opens to unadulterated and adept advice, directing elders to the path of sound financial management. This counsel, unburdened by biases or vested interests, imparts a detailed view of their fiscal terrain, arming them with an arsenal of knowledge to parse possible challenges as well as avoid the snare of possible scams or manipulation.

The result will be to empower them, as senior citizens can make educated financial decisions for themselves and not fall prey to scams and fraudsters. With a boosted understanding of their financial milieu, they will be able to set up an awesome barrier against the rough trends of financial exploitation.senior

It’s of utmost significance to establish robust legal safeguards as a way to combat the insidious scourge of elder financial abuse. These safeguards play a crucial role in protecting our respected senior citizens from the snares and traps set by unethical actors. The variety of lawful procedures incorporates not only rigorous regulations controlling financial institutions yet additionally the imperative of reporting any kind of idea of prospective abuse and also the charge of weightier penalties upon those verified culpable of preying on elders.

Moreover, the establishment of specialized systems dedicated to resolving senior misuse within the folds of law enforcement agencies becomes a critical action to guarantee the careful investigation and also attentive prosecution of instances of economic exploitation. With the release of these robust legal safeguards, we effectively broadcast an absolute message: Senior financial exploitation shall locate no quarter, as we stand unwavering in our dedication to shielding our venerable citizens from the blight of financial abuse.

Senior financial abuse: Steps to take when suspecting exploitation

The need for swift, as well as decisive activity, can not be overstated, focused on protecting seniors from further elder abuse. Whenever financial abuse situations are suspected, there needs to be the collection of any type of corroborating evidence or pertinent documentation that lends credence to these suspicions. From there, with utmost tact as well as sensitivity, one embarks upon a journey of discussion, delving into the matter at hand with the senior concerned and also their circle of friends and relatives that the senior citizen depends on.

Depending on the gravity of the abusive situation there needs to be a consultation with an appropriate legal representative fluent in the nuances of elder law. This provides the opportunity to get legal advice and figure out possible strategies. As an added layer of alertness, getting in touch with local law enforcement lays the groundwork for a thorough reporting of the claimed misuse. And at the conclusion of this intricate series, it is vital to meticulously chronicle all conversations and also actions carried out, crafting a precise backup of documentation that will stand as a testimony to the thoroughness of the query into the suspected exploitation.

If you suspect that a senior person has actually been ensnared through financial elder abuse, the onus directly rests on your shoulders to report this to the appropriate authorities. Among these, neighbourhood law enforcement agencies carry out an essential function. The Canadian Network for the Prevention of Elder Abuse opens up a wide variety of beneficial resources, prepared to work as overviews for those embarking on this essential task. Reporting these disturbing incidents to the proper authority, the quick commencement of an investigation, concurrently accompanied by the provisioning of the essential assistance that the influenced elderly warrants, is the best course of action.senior

In dealing with senior financial abuse, an important thread that must be delicately woven is the stipulation of emotional and also psychological assistance for our elders. The ordeal of falling victim to financial exploitation casts a long darkness, enveloping them in distress and susceptibility. This experience, commonly noted by a sense of betrayal and powerlessness, requires a thoughtful reaction from specialists to assist them to cope with the full range of their resulting emotional roller coaster.

The journey towards healing starts with compassion, a foundation of assistance that recognizes the discomfort as well as the chaos that the attacked senior citizens endure. It is crucial for professionals to approach this task with sensitivity, acknowledging that the emotional toll of financial abuse can be as considerable as the financial loss itself. By producing a secure and also non-judgmental space, experts lay the structure for elders to express their feelings, worries, as well as fears.

One opportunity whereby specialists can help with their assistance is via counselling services. Offering seniors access to knowledgeable therapists that concentrate on elder abuse can provide them with a space to unravel the emotions that this terrible experience has caused. Through open discussion, these counsellors can help seniors deal with their emotions, reclaim a feeling of control, and also establish strategies to cope with the aftermath.

Support groups additionally play a crucial role in the recovery trip. Assisted by professionals, these teams provide a forum where seniors can get in touch with others that have experienced similar situations. Sharing tales, insights, and also coping mechanisms within an area of understanding people can foster a feeling of camaraderie and validate elders’ emotions.

Collaboration with mental wellness professionals is similarly critical. These experts can supply customized interventions to attend to certain psychological difficulties coming from the exploitation. Strategies such as cognitive-behavioural treatment and anxiety or depression management can equip senior citizens with functional tools to use in their healing journey.

Senior financial abuse: Conclusion

In the contemporary landscape, the guarding of our seniors from the clutches of financial abuse stands as an essential that knows no compromise. The instances comparable to that entailing US Senator Dianne Feinstein’s late husband’s estate resounds as an emotional wake-up call, spotlighting the plain susceptibility that elderly people challenge. It befits us to really acknowledge the gravity of this problem and also to proactively launch strengthened defences to shield our aging populace.

It is crucial to raise awareness, educate seniors about different scams and exploitation tactics, and provide them with the necessary resources to spot and report any suspicious activities. By standing together, taking preventive measures, and advocating for stronger legal protections, we can create a safer environment for our senior citizens and ensure their financial well-being. It is imperative that we, as responsible individuals and communities, come together to take a firm stand against senior financial exploitation.

I hope you enjoyed this senior financial abuse Brandon’s Blog. Everyone needs to understand what constitutes senior abuse and especially senior financial abuse. People scammed out of their money have trouble making ends meet, regardless of age. As life becomes more expensive for everyone, it is a growing concern in Canada, affecting individuals of all ages and income levels.

Individuals must take proactive measures to address financial difficulties and promptly seek assistance when necessary. It is crucial to recognize that financial stress is a prevalent concern and seeking help is a demonstration of fortitude, rather than vulnerability. Should you encounter challenges in managing your finances and find yourself burdened by stress, do not delay in pursuing aid.

Revenue and cash flow shortages are critical issues facing people, entrepreneurs and their companies and businesses with debt problems that are in financial distress. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind.

The Ira Smith Team understands these financial health concerns. More significantly, we know the requirements of the business owner or the individual that has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

It is not your fault you can’t fix this problem on your own and it does not mean that you are a bad person. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team uses innovative and cutting-edge methodologies, to adeptly navigate you through the intricacies of your financial challenges, ensuring a resolution to your debt-related predicaments without resorting to the rigours of the bankruptcy process. We can get you debt relief now!

We have helped many entrepreneurs and their insolvent companies who thought that consulting with a Trustee and receiver meant their company would go bankrupt. On the contrary. We helped turn their companies around through financial restructuring.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

The Ira Smith Trustee & Receiver Inc. team understands that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.senior

Categories
Brandon Blog Post

BANKRUPTCY LAWYER: IS ONE ESSENTIAL TO FILE FOR BANKRUPTCY IN ONTARIO?

bankruptcy lawyer
bankruptcy lawyer

Bankruptcy lawyer: Introduction

Step right into this week’s edition of Brandon’s Blog, where we’re embarking on a profound exploration. Our focus today delves into a crucial theme that carries substantial weight within the psyche of a myriad of Canadian consumers grappling with financial adversity, as well as Canadian business owners navigating their enterprises with too many business debts through fiscal quandaries. The question at the forefront: do the circumstances warrant enlisting the expertise of a bankruptcy lawyer when contemplations of insolvency filings in Canada take center stage?

Venturing through the intricate landscape of insolvency and the realms of personal or corporate bankruptcy has the potential to stir feelings of frustration and helplessness. This sentiment amplifies mainly when the trajectory of your personal or corporate fiscal destiny hangs in a precarious balance, swaying like a delicate pendulum. The gravity of making prudent choices during this trying juncture cannot be overstated. At its core, lies the quintessential need to not only identify the right course but also to discern the adept professional from whose wellspring of wisdom guidance should be sought.

In this Brandon’s Blog, I will outline the scenarios in which consulting with a bankruptcy lawyer is highly advised, but as you will see, it is not essential in every circumstance. Whether you are taking into consideration submitting a restructuring proposal or seeking bankruptcy protection, recognizing who to turn to for specialist assistance for legal and financial advice can substantially affect the result of your financial journey.

I will discuss the intricate details surrounding insolvency as well as bankruptcy law in Canada. By diving into the significance of professional assistance and support, I intend to equip you with the understanding needed to make enlightened decisions during this difficult phase. Join me as we decipher the secrets of insolvency and bankruptcy and empower ourselves to safeguard a better financial future.

Bankruptcy lawyer: Overview of the insolvency and bankruptcy process in Canada

The bankruptcy procedure in Canada is governed by the Bankruptcy and Insolvency Act (BIA). It is a legal statute developed to supply relief to people and companies that are unable to pay their financial obligations. The process always includes the services of a Licensed Insolvency Trustee that is responsible for administering the insolvency process.

The Licensed Insolvency Trustee is first required to assess the debtor’s entire financial situation, including the causes of the insolvency, the current financial position and the nature of the assets and liabilities of the debtor. The Licensed Insolvency Trustee then needs to make recommendations to the debtor to solve their current financial crisis. Once agreed on, what insolvency or bankruptcy process will be implemented, the BIA and the restructuring consumer proposal, Division I proposal or the bankruptcy, is put into operation to offer a fresh start for the debtor while making certain there is fair treatment for the creditors.

A Licensed Insolvency Trustee is the only professional licensed in Canada by the federal government to administer the Canadian insolvency process chosen. In many cases, the process can be carried out without the advice of a bankruptcy lawyer.

bankruptcy lawyer
bankruptcy lawyer

Bankruptcy lawyer: Formal insolvency options in Canada

Navigating the intricate labyrinth of bankruptcy within Canada unfurls as a legal undertaking of profound significance, extending its benevolent embrace to both individuals and enterprises ensnared within the inescapable clutches of their fiscal commitments. This orchestrated progression finds its regulatory compass in the venerable BIA, its vigilant guardianship entrusted to a duly licensed sentinel of fiscal adversity, recognized as a Trustee.

Commencing this odyssey, the debtor sets forth to formally lodge their supplication for bankruptcy, an entreaty promptly received by the Licensed Insolvency Trustee, who, in turn, undertakes the judicious scrutiny of the debtor’s economic constellations. From this intricate appraisal blooms a stratagem, a masterwork designed to navigate the undulating terrain of debt repayment, fostering equilibrium amid the ranks of creditors.

Through the procession of this intricate ballet, the debtor finds sanctuary from the clamorous onslaught of creditor collections, an ephemeral respite nestled within the folds of the overarching process. This respite, however, is not a sojourn of idle reprieve; it entails the debtor’s obligatory participation in the convocations of credit counsel, a didactic interlude intended to illuminate the labyrinthine corridors of fiscal wisdom.

Once the intricacies of this design garner the seal of approval, the gears of asset liquidation are set into motion, unfurling a cascade of transactions wherein the debtor’s holdings metamorphose into liquid currency, a tribute disseminated among the consortium of creditors who await their apportioned spoils.

The culmination of this voyage heralds the debtor’s liberation from the shackles of residual indebtedness, a phoenix rising from the embers of fiscal duress, reborn into a realm unburdened by the obligations that once ensnared them.

The formal insolvency options in Canada are described below.

Insolvency and debt relief solutions for individuals –

  • Restructuring by making monthly payments under a consumer proposal for those who owe $250,000 or less (not including any debts secured by and registered against a person’s residence).
  • Financial restructuring under a Division I proposal, for those who owe more than $250,000.
  • Personal bankruptcy.

Insolvency and debt relief options for companies –

  • Financial restructuring under a Division I proposal as an alternative to bankruptcy.
  • Sale of assets through a receivership enforcement process initiated by a secured creditor.
  • Restructuring for companies that owe $5 million or more under the Companies’ Creditors Arrangement Act (CCAA).
  • corporate/business bankruptcies..

In certain situations, looking for the advice of a Canadian bankruptcy lawyer is of utmost significance. An insolvency or bankruptcy filing is an intricate legal process that needs careful consideration of an individual’s financial scenario. A bankruptcy legal representative can assist with whether corporate or personal bankruptcy, as the case may be, is the best option, the kinds of insolvency processes readily available, and the connected lawful obligations and effects.

Furthermore, individuals can seek assistance from a bankruptcy lawyer to guide them through the legal procedures. It is highly recommended that consumer debtors seek advice from both a licensed insolvency trustee and a bankruptcy lawyer in certain circumstances. Some typical scenarios that warrant additional counsel from a bankruptcy lawyer well-versed in insolvency law include:

  1. They are involved in complex family law proceedings.
  2. There are one or more legal actions against you that allege unlawful behaviour, such as fraud or fraudulent misrepresentation or the conversion of someone else’s property, such as funds held in trust.
  3. The bankrupt’s application for discharge from bankruptcy is being opposed and therefore there will be a court hearing.
  4. Their financial situation is intertwined with other issues where confidential consultation with legal advice is required and that advice must be protected by solicitor-client privilege.
  5. There are special asset considerations where a privileged discussion with a bankruptcy lawyer is essential before seeking advice and assistance from a Licensed Insolvency Trustee.

In corporate insolvency situations, we always recommend that the Directors obtain legal advice from a bankruptcy lawyer in addition to the corporation obtaining legal assistance.

A bankruptcy lawyer can provide customized guidance in such touchy situations as well as representation to guarantee the most effective feasible outcome for their clients.

bankruptcy lawyer
bankruptcy lawyer

Can I file for bankruptcy without a bankruptcy lawyer in Canada?

While it is possible to declare bankruptcy without a bankruptcy lawyer in Canada, it is recommended to seek legal counsel for complex corporate and personal filings. Hiring a bankruptcy attorney supplies several advantages, including knowledge of insolvency legislation, assistance in more complex proceedings and guidance on unusual issues, specific unique creditor issues or claims and personal liability under any personal guarantees.

In addition, a bankruptcy lawyer can represent you in court proceedings such as with litigants who have obtained approval of the court to continue litigation against the debtor and on a personal bankruptcy discharge hearing. This will guarantee that your legal rights are safeguarded throughout the process. Therefore, in these kinds of consumer and corporate insolvency matters, it is smart to talk to a qualified bankruptcy lawyer to ensure a smoother and much more successful bankruptcy process in Canada.

Determining the necessity of enlisting the services of both a bankruptcy lawyer and a Licensed Insolvency Trustee: Is a bankruptcy lawyer required to initiate bankruptcy proceedings in Canada?

Filing for bankruptcy in Canada can be a complex as well as stressful process, however, as defined above, it is feasible to do it without the help of a bankruptcy lawyer. A bankruptcy lawyer cannot launch the bankruptcy process in Canada. In Canada, bankruptcy, as well as any other insolvency process, is launched and administered by Licensed Insolvency Trustees that are qualified and also supervised by the Office of the Superintendent of Bankruptcy (OSB). So when someone files for bankruptcy, it is done with a trustee in bankruptcy (this is the old name for a Licensed Insolvency Trustee).

Trustees are accountable for overseeing and handling the Canadian bankruptcy and insolvency procedures, including the liquidation of assets and the distribution of proceeds to creditors for unsecured debts. They additionally offer debtors financial counselling, therapy and support on how to handle their financial resources in the future. To end up being a Trustee, people need to satisfy particular educational and professional requirements, consisting of completing specialized training, courses and examinations. Thus, Canadians can trust that their insolvency, as well as personal bankruptcy procedures, are being managed by qualified and also experienced professionals.

Regardless of the guidance and aid regarding your financial affairs from a Licensed Insolvency Trustee before and also after the initiation of a financial restructuring or personal bankruptcy process, a Licensed Insolvency Trustee practically acts on behalf of the unsecured creditors. So, for circumstances like those described above, if any debtor has an extra complicated scenario, is associated with sticky scenarios or is concerned about the director or personal responsibility as a result of a business restructuring or bankruptcy, then the recommendations of a bankruptcy lawyer should be acquired before entering into any insolvency procedure.

bankruptcy lawyer
bankruptcy lawyer

Bankruptcy lawyer and a Licensed Insolvency Trustee: Determining the necessity of enlisting the services of both a bankruptcy lawyer and a Licensed Insolvency Trustee

There arise certain junctures where the imperative of engaging a proficient bankruptcy lawyer to adroitly navigate the intricate labyrinth of the Canadian bankruptcy process becomes unequivocal. As expounded upon earlier, should your fiscal panorama manifest intricacies reminiscent of a Byzantine tapestry, replete with an entanglement of debts and creditors, the tutelage and expertise proffered by a bankruptcy lawyer morph into an invaluable compass.

The determination of the exigency to enlist the services not only of a bankruptcy lawyer but also of a bankruptcy trustee constitutes a pivotal crossroads for both individuals and enterprises ensnared in the throes of financial quandaries. While a bankruptcy lawyer adroitly dispenses legal counsel and advocates in the corridors of justice, a bankruptcy trustee’s role expands to encompass the labyrinthine realm of debt reorganization, proposal filings, and the art of debt alchemy. Their convergence encapsulates a holistic stratagem in the pursuit of resolving the monetary labyrinth.

Grasping the complexity inherent in bankruptcy law is tantamount, and a seasoned bankruptcy lawyer deftly steers through the legal firmament, charting a course that aligns with the best nexus of legal tenets. Conversely, a Licensed Insolvency Trustee proffers a detached analysis of the financial constellation, endowing clients with an array of options extending beyond the binary realm of bankruptcy and answering any questions about bankruptcy you may have.

At its essence, the verdict to summon forth both the prowess of a bankruptcy lawyer and the sagacity of a Trustee should hinge upon the unique tapestry woven by individual circumstances and the crystalline aspirations of the client. Ultimately, it comes down to the complexity and sensitivity of the person’s or company’s overall situation.

How to find a qualified bankruptcy lawyer or Licensed Insolvency Trustee in Ontario

When confronted with financial troubles in Canada, it’s important to make informed choices. If you’re thinking about bankruptcy, it’s smart to seek guidance from a Licensed Insolvency Trustee. These professionals can assist you through the intricate procedure and also give important understanding.

For those with especially complicated financial circumstances, or who is a corporate director of an insolvency company, it might be essential to employ the help of a seasoned bankruptcy lawyer.

Starting your search for trustworthy professionals can be frustrating. Nonetheless, a calculated strategy can aid. Begin by discovering the Law Society of Ontario’s website, where you’ll discover a comprehensive list of competent legal experts that concentrate on bankruptcy and insolvency.

To locate a bankruptcy trustee near you, explore the computerized database of the OSB. This will certainly give a list of bankruptcy trustees in your locale to seek insight, advice and assistance. For both a bankruptcy lawyer as well as a Trustee, it is essential to engage in a comprehensive conversation with any prospective advisor, delving into their specialist background, navigational technique, and cost structure.

Efficiency is not the only aspect to think about; reliability and also the personal vibe you get from that person to see if you make a connection are likewise essential elements that need to inform your decision. By locating an ally who can give adept support throughout this challenging period, you can navigate this hard juncture with greater ease as well as confidence.

Finally, check out Google and other online reviews. There is nothing better than reviews from people who were in your shoes before and sought assistance from a Licensed Trustee, bankruptcy lawyer or both. Their experience and insight into specific professionals will help you immensely. Things to look for include:

  1. What service did they perform for the person?
  2. Does the reviewer live in your general area?
  3. Did the professional do a good job?
  4. What were some of the reviewer’s favourite things in working with that professional?
  5. Did they work with any specific people in the firm that they highly recommend?
  6. How did the Licensed Insolvency Trustee or bankruptcy lawyer they chose to compare to others they may have consulted with?
  7. Are there any tips the reviewer offers to others?

Bankruptcy lawyer: Conclusion

Looking for legal advice when considering bankruptcy is not needed in every scenario. However, it is necessary when it concerns complicated plans. Hiring a qualified bankruptcy lawyer can provide countless benefits. They have the proficiency as well as knowledge to advise you before embarking on a bankruptcy process and afterwards to assist you with the whole procedure.

When considering filing an assignment in bankruptcy in Canada, it is crucial to comprehend the complexities of the process and also the potential effects. While it may be possible to navigate through it without an insolvency lawyer, talking to one will supply the specialist expertise necessary to guarantee a smooth and efficient process when you have complex or unique issues in your situation.

From evaluating your financial situation to exploring alternatives such as a restructuring proposal, a bankruptcy lawyer can direct you through the legal puzzle and also suggest the most ideal strategy. When it concerns matters as substantial as bankruptcy, seeking expert help is a sensible choice to secure your best interests and also secure a fresh financial start.

I hope you enjoyed this bankruptcy lawyer Brandon’s Blog. Problems with making ends meet are a growing concern in Canada, affecting individuals of all ages and income levels.

Creating a solid financial plan can be the key to unlocking a brighter and more prosperous future. By taking control of your finances, you can prioritize your expenses, set clear financial goals, and build a strong foundation for your dreams to come true. With the right mindset and approach, financial planning can empower you to regain control, eliminate this issue as a source of stress in your life and find peace of mind.

Individuals must take proactive measures to address financial difficulties and promptly seek assistance when necessary. It is crucial to recognize that financial stress is a prevalent concern and seeking help is a demonstration of fortitude, rather than vulnerability. Should you encounter challenges in managing your finances and find yourself burdened by stress, do not delay in pursuing aid.

Revenue and cash flow shortages are critical issues facing people, entrepreneurs and their companies and businesses with debt problems that are in financial distress. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind.

The Ira Smith Team understands these financial health concerns. More significantly, we know the requirements of the business owner or the individual that has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

It is not your fault you can’t fix this problem on your own and it does not mean that you are a bad person. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team uses innovative and cutting-edge methodologies, to adeptly navigate you through the intricacies of your financial challenges, ensuring a resolution to your debt-related predicaments without resorting to the rigours of the bankruptcy process. We can get you debt relief now!

We have helped many entrepreneurs and their insolvent companies who thought that consulting with a Trustee and receiver meant their company would go bankrupt. On the contrary. We helped turn their companies around through financial restructuring.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

The Ira Smith Trustee & Receiver Inc. team understands that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.

bankruptcy lawyer
bankruptcy lawyer

 

 

 

Categories
Brandon Blog Post

TENANTS IN COMMON VS JOINT TENANCY IN ONTARIO: THE MODERN RULES OF A 1 CO-OWNER UNHAPPY BANKRUPTCY

tenants in common vs joint tenancy

We hope that you and your family are safe, healthy and secure during this COVID-19 pandemic.

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

Tenants in common vs joint tenancy in Ontario: Shared ownership of property

There are two different types of property joint ownership: tenants in common vs joint tenancy. Whether you’re married or not, you still face the same problems. Having a co-owned home raises the issue of how the title should be held; tenants in common vs joint tenancy. Both are equally good. The answer really depends on the relationship between the co-owners and their estate planning needs.

A bankruptcy filing by one of the co-owners complicates matters further. A recent bankruptcy case decision in Ontario where only one of the joint owners filed for bankruptcy, highlights the problem, especially for non-bankrupt co-owner. This Brandon Blog discusses the recent bankruptcy case and what it means for both the bankrupt co-owner and the non-bankrupt co-owner regardless of the ownership choices between tenants in common vs joint tenancy.

Home ownership in Ontario: tenants in common vs joint tenants as co-owners

The word “tenants” is normally thought of with property rental. But both joint tenancy and tenants in common reference to a type of shared property ownership. As tenants in common, the ownership rights and all areas of an entire property are owned equally by all members of the group.

When one of the joint tenants dies, the deceased owner‘s share of the property passes to the surviving owner without going through the probate process. With tenants in common, in the event of death, this is not the case.. For asset protection and estate planning purposes, many married couples who want to hold title to the real property in a co-ownership structure, do so as joint tenants to avoid the probate process. Each joint tenant owns a 50% share ownership stake in the property.

Tenants in common may freely decide what ownership percentage of the property each owns. Each tenant in common does not need to own an equal percentage of the property; unequal ownership is fine as long as all co-owners agree on the ownership arrangements of unequal shares. The tenants in common can also transfer their share of the property through a Will, a real estate transfer, or even an arm’s length sale. Tenants in common are well advised to have a signed co-ownership agreement that spells everything out.

This is the primary difference between tenants in common vs joint tenancy in Ontario for the joint ownership of real property.

tenants in common vs joint tenancy
tenants in common vs joint tenancy

Property ownership part 2: tenants in common vs joint tenants in Ontario and the bankruptcy of 1 co-owner

When a co-owner becomes bankrupt, what happens? The Brandon Blog faithful knows that I have previously explained that upon bankruptcy of a person, the non-exempt assets of the bankrupt should be vested in the licensed insolvency trustee, subject to secured creditors‘ rights. For real estate ownership, the answer does not change whether title is held in tenants in common vs joint tenancy.

There is an exemption in Ontario for equity in one’s home of not more than $10,783. It is not an exemption for the first $10K, but rather if the total equity is below that amount. Therefore, we can consider the equity in a bankrupt person’s ownership interest in their home to belong to the Trustee for all practical purposes.

If the bankrupt has a 50% ownership stake due to a joint tenancy agreement, then it is the bankrupt’s equity in half the home. If the bankrupt’s ownership stake is under a tenants in common co-ownership agreement, then it is the equity in only the bankrupt’s co-ownership share. In either scenario, the ownership interest of the non-bankrupt owners are not directly affected. However, the other co-owners’ are affected one way or the other by the bankruptcy of a co-owner. The legal case I am about to tell you about is no exception.

Land Owner Transparency Registry: A Public Database

Upon the person’s bankruptcy, the bankrupt must disclose all assets to the Trustee. With computerization and the internet, it is easy for a Trustee to determine if the bankrupt has an ownership interest in the real estate where they reside. This is whether or not the bankrupt has disclosed such ownership interest.

The decision of the Honourable Justice Pattillo of the Ontario Superior Court of Justice in Bankruptcy and Insolvency dated July 28, 2021, in Re Johansen Bankruptcy, 2021 ONSC 5241 (CanLII) highlights the issues in the bankruptcy of a co-owner of real estate. In December 2016, Mr. Johansen filed a voluntary bankruptcy assignment. In his sworn statement of affairs, he listed no realizable assets and liabilities of $73,968 (unsecured) and $14,950 (secured). No mention is made of any ownership in real estate.

The Trustee learned of the bankrupt’s interest in the home he lived in with his mother in March 2017. In the period from April 2017 to October 2020, the Trustee wrote to the bankrupt and Mrs. Johansen as well as spoke to the bankrupt several times about his interest in the home and why it hadn’t been disclosed. The bankrupt did not provide any information other than denying interest in the property, and his mother did not respond.

A FedEx courier envelope containing a one-page statutory declaration purportedly signed by Mrs. Johansen on October 18, 2018, arrived at the Trustee on October 16, 2020. Her declaration stated, in part, that putting the 20% in the bankrupt’s name was intended to provide her son with an interest in her Estate over and above any other entitlements under her Will. According to her, the 20% was a gift to be realized only after her death.

In the Trustee’s view, the bankrupt and his mother are playing games with each other. The Trustee applied to the court for a declaration that the bankrupt held a 20% interest in the home at the time of bankruptcy, and that he could partition and sell it. Despite the Trustee having a lawyer, the bankrupt represented himself. It would have been better if he had gotten legal advice and been represented in court.

tenants in common vs joint tenancy
tenants in common vs joint tenancy

Tenants In Common vs Joint Tenancy: Can your 90-year-old mother be thrown out of her house?

The Judge determined that the bankrupt owned a 20% interest in the property based on the legal title, and hence, that 20% interest vested in the Trustee pursuant to s. 71 of the Bankruptcy and Insolvency Act (Canada) (BIA).

Mrs. Johansen’s statutory declaration to the effect that the bankrupt did not own the real estate and that the 20% was a gift that only passes to him on her death was not accepted by the Judge. The declaration was signed some two years after the bankruptcy when the Trustee’s ownership interest was well known. Despite repeated requests from the Trustee for information, it was not produced for another two years. In addition to what was noted by the Judge, his main concern was the way she characterized the bankrupt’s interest, given the evidence concerning the property they owned before this home, which Mrs. Johansen failed to mention.

Mrs. Johansen and the former marriage of the bankrupt’s wife, as well as the bankrupt, were the three parties on title to the home they purchased on January 30, 2007. They obtained a mortgage from TD Bank on January 30, 2007, which was discharged on February 21, 2007. Due to a marital split, the bankrupt’s wife was removed from the legal title on October 17, 2008, leaving just his mother Mrs. Johansen and himself as parties on the legal title. The bankrupt admitted that his ex-wife was paid for her interest in that home. On June 28, 2012, the bankrupt and his mother sold that home for $567,000, and the same day purchased the current home for $450,000.

The home was purchased in 2012. The title documents recorded at the time, its ownership is divided between 20% owned by the bankrupt and 80% owned by Mrs. Johansen. Mrs. Johansen and the bankrupt both signed the Land Transfer Tax affidavit showing as between tenants in common vs joint tenancy they chose to own the home as tenants in common. There are no mortgages recorded on the title.

All title searches, including a current title search, did not reveal the nature of the interests of each of Mrs. Johansen, the bankrupt or his ex-wife held in that previous home. However, it did show that each of them had an interest in it. The Judge determined that when Mrs. Johansen and the bankrupt bought the current home, it is a reasonable conclusion that the bankrupt had a 20% ownership interest in it. It was not intended to only pass on Mrs. Johansen’s death.

Justice Pattillo did not accept the bankrupt’s evidence that he has no interest in the property and had no knowledge that he was one of the parties on title. Given the history and the fact that he signed the affidavit of Land Transfer Tax at the time of purchase, Justice Pattillo held that the bankrupt was aware he had an interest in the legal title in the property.

Justice Pattillo found that the Trustee had the standing to bring the application for partition or sale of the property since he is a person with an interest in it. The Judge noted that Mrs. Johansen is 90 years old and does not wish to sell her home. Based on the evidence, however, he did not consider that to be of sufficient hardship to warrant refusing the requested remedy.

Tenants in common vs joint tenancy: The bankruptcy of 1 co-owner will affect the others

The Judge stayed his order for three months. He encouraged the bankrupt and through him his mother to seek professional advice so that this issue can be resolved with the Trustee before the sale process begins. The order will take effect if a resolution is not reached within that timeframe.

Now that the prospect of the sale of the entire home, not just the bankrupt’s co-ownership interest, was a reality, the bankrupt and his mother needed professional guidance. Their professional advice would be that the Trustee is only entitled to 20% of the bankrupt’s equity interest. So, if the mother from her own funds, or by getting a mortgage, can come up with the value of the 20% interest and pay it to the Trustee, then the house will not get sold. She will have bought the bankrupt son’s 20% interest, and the Trustee will have all the money he is entitled to.

If one co-owner goes bankrupt, the other co-owners are affected as well. It is the Trustee’s responsibility to convert the bankrupt’s equity into cash. One or more of the remaining co-owners are the natural buyers of the bankrupt co-owner’s interest. Sometimes non-bankrupt co-owners must sell, as is the case for Johansen if the mother cannot purchase the son’s equity from the Trustee, but most often someone will purchase the Trustee’s equity to maintain the status quo.

Had the choice of ownership interest as between tenants in common vs joint tenancy, this would not have changed the outcome of this case.

tenants in common vs joint tenancy
tenants in common vs joint tenancy

A lawyer can help you understand tenants in common vs joint tenancy in Ontario

I hope that you found the tenants in common vs joint tenancy Brandon Blog interesting. Problems will arise when you or your company are in financial distress, cash-starved and cannot repay debts. There are several insolvency processes available to a company or a person with too much debt.

If you are concerned because you or your business are dealing with substantial debt challenges, you need debt help and you assume bankruptcy is your only option, call me.

It is not your fault that you remain in this way. You have actually been only shown the old ways to try to deal with financial issues. These old ways do not work anymore.

The Ira Smith Team utilizes new modern-day ways to get you out of your debt difficulties with debt relief options as alternatives to bankruptcy. We can get you the relief you need and so deserve. Our professional advice will create for you a personalized debt-free plan for you or your company during our no-cost initial consultation.

The tension put upon you is big. We know your discomfort factors. We will check out your entire situation and design a new approach that is as unique as you and your problems; financial and emotional. We will take the weight off of your shoulders and blow away the dark cloud hanging over you. We will design a debt settlement strategy for you. We know that we can help you now.

We understand that people with credit cards maxed out and businesses facing financial issues need a realistic lifeline. There is no “one solution fits all” method with the Ira Smith Team. Not everyone has to file bankruptcy in Canada. The majority of our clients never do as we know the alternatives to bankruptcy. We help many people and companies stay clear of filing an assignment in bankruptcy.

That is why we can establish a new restructuring procedure for paying down debt that will be built just for you. It will be as one-of-a-kind as the economic issues and discomfort you are encountering. If any one of these seems familiar to you and you are serious about getting the solution you need to become debt-free, contact the Ira Smith Trustee & Receiver Inc. group today.

Call us now for a no-cost consultation.

We hope that you and your family are safe, healthy and secure during this COVID-19 pandemic.

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

tenants in common vs joint tenancy
tenants in common vs joint tenancy
Categories
Brandon Blog Post

BANKRUPTCY LAWYER IN TORONTO VS. BANKRUPTCY TRUSTEE IN TORONTO: WE EXPLORE AND EXPLAIN COMPLETELY THE DIFFERENCES FOR YOU

bankruptcy lawyer in toronto
bankruptcy lawyer in toronto

We hope that you and your family are safe, healthy and secure during this COVID-19 pandemic.

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

If you would prefer to listen to an audio version of this Brandon Blog, please scroll to the very bottom and click play on the podcast.

Bankruptcy lawyer in Toronto introduction

Canada is recognized for its cultural diversity, but it can be a battle to locate trustworthy information on the nation’s laws. Bankruptcy is a difficult topic to learn about; both learning the technical side and dealing with the emotional one.

If you or your company are thinking about bankruptcy, you might think you need a bankruptcy lawyer in Toronto. However, you do not necessarily require one. A licensed insolvency trustee in Toronto (formerly called a bankruptcy trustee in Toronto) can help you pick the perfect insolvency process for you and make certain that you survive it as best as possible.

In this Brandon Blog, I discuss the roles of a bankruptcy lawyer in Toronto and a licensed insolvency trustee. Sometimes they can overlap and many times they do not. We will take a detailed look at a bankruptcy lawyer in Toronto vs a licensed insolvency trustee. We will discuss the differences between the two and exactly how they can each help you.

Bankruptcy lawyer in Toronto – Do you need one to file personal bankruptcy?

Whether it is personal bankruptcy proceedings, or one of the formal alternatives to bankruptcy such as a consumer proposal or a Division I Proposal that are being contemplated, a bankruptcy lawyer in Toronto or elsewhere is not involved in the actual bankruptcy filing. or the Canada – restructuring & insolvency filing. That is what trustees in bankruptcy do.

When a person or company is contemplating an insolvency process, they can get a no-cost consultation with any one of the bankruptcy trustees they choose to meet with. During the consultation, information is gathered by the Trustee, analyzed and possible solutions are discussed.

Trustees must always be careful to not tread into areas that could possibly give them a conflict in providing their financial services. People wanting advice on asset transfers, asset protection, or preferring one or more creditors over others are areas that Trustees should not wade into.

In situations like that, I always advise potential bankruptcy clients that as there is no privilege in our discussions and we should not talk about those things so that I will not be conflicted. Rather, the person should get advice from a bankruptcy lawyer in Toronto or elsewhere where the discussions and the legal advice are protected by solicitor-client privilege.

bankruptcy lawyer in toronto
bankruptcy lawyer in toronto

Do You Need a personal bankruptcy lawyer in Toronto to get your bankruptcy discharge?

As I have written before in several Brandon Blogs, there are 6 possible outcomes in a bankrupt’s application for discharge. This depends on whether the discharge is being opposed by either the Trustee and/or one or more creditors. The possible bankruptcy discharge outcomes are:

  • Automatic – This discharge is absolute and is given by the Trustee at the earliest possible time the bankrupt person is entitled to a discharge. It means that the bankruptcy has performed all of his or her duties, has fully cooperated with the Trustee and nobody has opposed the discharge.
  • Absolute – An absolute discharge is obtained when the Trustee issues the automatic discharge. it is also possible to obtain an absolute discharge when a creditor opposes the bankrupt’s discharge, the matter goes to court for a hearing, but the court does not believe the evidence presented by the opposing creditor is persuasive and the court orders an absolute discharge.
  • Conditional – In this type of discharge, there was opposition to the bankruptcy receiving an absolute discharge. The court considered the evidence and concluded that the bankrupt must fulfill one or more conditions before being entitled to a discharge from bankruptcy. More often than not, a conditional discharge includes a certain amount of money the bankrupt must pay to the Trustee for the general benefit of the creditors.
  • Suspended – A suspended discharge is given when there is opposition to the bankrupt’s discharge and the matter goes to court for a discharge hearing. Based on the evidence, the court believes that the bankrupt, either before or during the bankruptcy estate file administration, has conducted himself or herself in such a way that although a discharge will be given, it should be delayed. The suspension acts to delay the discharge and can be combined with conditions.
  • Refused – The bankrupt’s discharge is opposed probably by at least the Trustee and probably one or more creditors. There is sufficient evidence before the court that the bankrupt has not lived up to his or her duties and has probably failed to fully cooperate and provide full disclosure to the Trustee. The court, based on the evidence, refuses to consider the bankrupt’s application for discharge until such time as the bankrupt performs all duties and discloses all information.
  • No order – This is not an actual discharge type, but can be the outcome of a discharge hearing. The court can issue a “no order” instead of a refusal. The facts are probably similar to when the court can issue a refusal. However, in a “no order” situation, the bankrupt remains in bankruptcy but the Trustee is then free to pursue its discharge. Once the Trustee gets its discharge, the bankrupt lose the protection offered by the stay of proceedings. Creditors are then free to pursue all of their rights and remedies against the bankrupt in the enforcement of their trying to collect their respective debts.

When the time comes for the bankrupt to get his or her discharge from bankruptcy, if the Trustee or a creditor opposes, the bankrupt would be well advised to consult with a bankruptcy lawyer in Toronto or elsewhere. The Trustee cannot give an automatic discharge and the matter is going to court for a trial. The bankrupt should get the benefit of legal advice and probably will need to retain the lawyer to provide legal services in representing the bankrupt in court. That is not the job of the Trustee.

Corporate Bankruptcy in Canada – Corporate bankruptcy lawyer in Toronto, Canada – Do you need one to file corporate bankruptcy?

As I will explain, every Canadian corporate insolvency file requires probably several, not just one bankruptcy lawyer in Toronto or elsewhere. Insolvency law is complex and lawyers will help all the parties involved.

The current economic climate in Canada is going to be challenging for Canadian businesses and I expect there will be many financial difficulties. Government COVID-19 support programs are scheduled to end soon. Companies have been tapped out while shut down just trying to stay alive with little or no revenue being earned. Companies will need cash now that it is time to start everything up again. No doubt there will be business casualties.

However, not all businesses are created equal. Some will be able to restructure, some will file for bankruptcy and others will merely shut their doors and fade away.

Among the keystones of a restructuring proceeding under either the Companies’ Creditors Arrangement Act or the Bankruptcy and Insolvency Act is the debt workout. The restructuring is designed to maintain the debtor’s business and negotiate a financial debt repayment strategy with its creditors. The aim is to save jobs, allow the company to continue while avoiding bankruptcy liquidation.

Key components of a debt workout normally include debtor-in-possession lending (DIP lending) while the company is reorganizing, new capital for the company coming out of its restructuring and getting unsecured creditors, and possibly secured creditors, to agree to accept less than they are owed. In the very large corporate restructuring files, there are normally lending syndicates due to large and complex lending arrangements. They too will need lawyers to help them with the insolvency law.

If a restructuring proceeding is not possible or does not succeed, then either the company’s secured creditor will begin receivership enforcement proceedings or the company will file an assignment in bankruptcy or a creditor will launch a bankruptcy application to put the company into bankruptcy.

In every corporate insolvency file, legal services are required by all the stakeholders. Canadian counsel plays an important part in providing advice. In the larger files, a large team of lawyers will be needed for both the company and its main creditors. The Board of Directors will need their own independent legal team. The bankruptcy trustee in Toronto will also need a dedicated team of lawyers to help navigate through the formal restructuring in court or help in a court-appointed receivership, private receivership or bankruptcy.

As you can see, in pretty well every corporate file, a bankruptcy lawyer in Toronto or elsewhere is pretty well a must-have requirement. Lawyers will be able to help the company, its Board of Directors, its creditors and the insolvency professional create effective solutions. The best ones will also make sure that they are also practical solutions.

bankruptcy lawyer in toronto
bankruptcy lawyer in toronto

Other situations where you could need a bankruptcy lawyer in Toronto, Barrie, GTA, or elsewhere

When looking for a bankruptcy lawyer in Toronto, Barrie, GTA and elsewhere, you want to find one that has substantial experience. Depending on the situation you or your company are involved in, the experience could be in one or more of:

  • financial reorganizations;
  • debt reorganizations and debt restructurings;
  • debtor legal rights and creditor rights;
  • security enforcement;
  • forbearance/standstill arrangements;
  • lender liability suits;
  • receivership and related matters for banks or other secured lenders, court and privately appointed receivers;
  • insolvency and bankruptcy litigation or other complex matters; and
  • acting for receivers and Trustees, debtors, secured creditors, unsecured creditors or any other stakeholder in an insolvency process.

Take Your First Step Towards A Debt Free Life

I hope that you found this bankruptcy lawyer in Toronto Brandon Blog interesting and that you now have a better appreciation for when getting bankruptcy legal advice is necessary. Problems will arise when you are cash-starved and in debt. There are several insolvency processes available to a person or company with too much debt.

If you are concerned because you or your business are dealing with substantial debt challenges, you need debt help and you assume bankruptcy is your only option, call me.

It is not your fault that you remain in this way. You have actually been only shown the old ways to try to deal with financial issues. These old ways do not work anymore.

The Ira Smith Team utilizes new modern-day ways to get you out of your debt difficulties with debt relief options as alternatives to bankruptcy. We can get you the relief you need and so deserve. Our professional advice will create for you a personalized debt-free plan for you or your company during our no-cost initial consultation.

The tension put upon you is big. We know your discomfort factors. We will check out your entire situation and design a new approach that is as unique as you and your problems; financial and emotional. We will take the weight off of your shoulders and blow away the dark cloud hanging over you. We will design a debt settlement strategy for you. We know that we can help you now.

We understand that people and businesses facing financial issues need a realistic lifeline and practical financial advice. There is no “one solution fits all” method with the Ira Smith Team. Not everyone has to file bankruptcy in Canada. The majority of our clients never do as we know the alternatives to bankruptcy. We help many people and companies stay clear of filing an assignment in bankruptcy.

That is why we can establish a new restructuring procedure for paying down debt that will be built just for you. It will be as one-of-a-kind as the economic issues and discomfort you are encountering. If any one of these seems familiar to you and you are serious about getting the solution you need to become debt-free, contact the Ira Smith Trustee & Receiver Inc. group today.

bankruptcy lawyer in toronto
bankruptcy lawyer in toronto

Call us now for a no-cost bankruptcy consultation.

We hope that you and your family are safe, healthy and secure during this COVID-19 pandemic.

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

Call a Trustee Now!