Tag: licensed insolvency trustee

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DECLARE BANKRUPTCY: A COMPLETE GUIDE ON WHAT IS IT LIKE TO DECLARE BANKRUPTCY

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting. We hope that you and your family are safe and healthy.

What is it like to declare bankruptcy?

What is it like to declare bankruptcy? It is a scary life event, but filing bankruptcy is not as bad or terrifying as the majority of people think. Actually, you have already been through the worst of it before you declare bankruptcy.

If it’s the right option for you, it will get rid of the tension, stress, and anxiety from your life that you have been lugging with you for a very long time. It does not require that much of your time. You will usually have 3 to 4 visits with the licensed insolvency trustee (formerly called a bankruptcy trustee) (Trustee). If all works out, you will never ever see the inside of the bankruptcy court and all your debt will be removed.

The purpose of this Brandon’s Blog is to describe what it is like to declare bankruptcy and what the bankruptcy process is all about.

When to declare bankruptcy

Bankruptcy law exists to help people who have handled an unmanageable amount of debt. Most of the time, it is a result of unforeseen expenses or other unexpected life events that are no fault of the person. Two main examples of such life events are job loss and illness.

Before deciding to declare bankruptcy, make sure to explore all your alternatives, and weigh the benefits and negative aspects of each reasonable option. Part of the no-cost examination we give everyone is doing precisely that; going through the alternatives, taking into consideration the pluses and minuses of each, and making our ideal professional recommendation to every person’s unique scenario.

If you determine that bankruptcy is your only viable alternative as lots of other Canadians do each year remember that the blot on your credit score will not be forever. By using credit properly in the future and paying your debts on time, you can begin to reconstruct your credit rating and put bankruptcy behind you.

To declare bankruptcy, either a bankruptcy restructuring or bankruptcy liquidation likewise assists companies that have unrestrained debt levels. We also offer solutions to companies and businesses searching for debt settlement help.

declare bankruptcy
declare bankruptcy

What are the consequences for a person to declare bankruptcy?

Everyone assumes that if you declare bankruptcy, it takes a massive emotional toll on you. Our experience in working with people we help is the exact opposite. Their financial debts, the fear of not having the ability to pay it off along with the anxiety of the unknown is what is devastating to everyone.

Once people declare bankruptcy, they tell us that the automatic stay of proceedings and the involvement of the Trustee stopping creditors’ collection calls are great benefits. Individuals that file for bankruptcy have already looked over the cliff and feared the worst. When they figure out that their worst worries never happen, and they currently have peace and quiet from collection phone calls, they feel like a weight has been taken off of them. As we tell people, your creditors will certainly now bother the Trustee, not you!

Your bankruptcy is a matter of public record. The Office of the Superintendent of Bankruptcy (OSB) maintains a public database. The Trustee alerts your creditors, Canada Revenue Agency (CRA) as well as the OSB of your filing. People can look up any name they wish for $8 per search. Although it is public, very few people spend money to browse the OSB database. It is mainly for Equifax and TransUnion to place on your credit history report. It is also for the federal government to keep data concerning people and companies that declare bankruptcy in Canada. There are no billboards or flashing neon lights with your name on it for all the world to see.

The most effective repercussion when you declare bankruptcy is that you have the chance to release either all or most of your financial debts and start life once again hassle-free.

How do I declare bankruptcy?

Anybody who is insolvent and owes more than $1,000 qualifies for personal bankruptcy or also known as a consumer bankruptcy filing in Canada. If you are having a problem meeting your financial responsibilities or have actually stopped satisfying them, you remain in financial trouble.

The primary step is to get in touch with a federally licensed Trustee asap to discuss your options. The Trustee will certainly initially collect info from you regarding your assets, liabilities, your household income, and expenses. This allows the Trustee to get a very good understanding of your one-of-a-kind situation.

You and the Trustee will then review your choices. Bankruptcy is just one of the feasible range of options. There are numerous bankruptcy alternatives which include, however, are not restricted to, debt consolidation and consumer proposals.

The Trustee will use the information you gave to prepare the bankruptcy forms. When you declare bankruptcy, of the various bankruptcy files the Trustee prepares, you are signing, and the Trustee is filing what is called an assignment in bankruptcy.

What should I do before I declare bankruptcy?

Many people think there are several things they should do before they declare bankruptcy. Common questions include:

  • Should I transfer my interest in the matrimonial home to my spouse?
  • When should I transfer the cash in my bank account to my spouse’s bank account?
  • Should I stop working or not look for work so that I will not have to make any surplus income payments?

The reality is that by the time you are contemplating bankruptcy, it is too late. The time to do your valid creditor proofing is not when you are insolvent, but when you are solvent! When you are not experiencing any financial problems.

Transferring assets most likely will be successfully attacked by the Trustee. That means that the Trustee will go after the person you have transferred assets to for no or little value. You will not only have protected assets, but you will also have caused your loved one to incur legal costs and have to cough up the assets.

Declaring bankruptcy is an emotional as well as a scary thing. There is only one thing you should do before you declare bankruptcy. You must meet with a Trustee for a no-cost initial consultation and be honest with them. Make full disclosure so that the Trustee can provide you with your realistic options. The Trustee will also fully explain to you what the process will look like and what might happen to you if you declare bankruptcy.

When is bankruptcy a good idea? The answer depends on your situation

Bankruptcy is not naturally negative or excellent, but it is vital for the honest but unfortunate debtor who finds themselves in big trouble with financial debt. Bankruptcy is actually for honest people that have come upon tough times. They need to look to bankruptcy due to the fact that they can’t see a way out. Even the Bible calls for debt mercy at the end of every 7 years (Deuteronomy 15:1).

If you find yourself in a hard financial situation and cannot see a way out, meet with a Trustee. Do not let fears or stereotypes stand in the way of getting the relief and your household need. To declare bankruptcy must be considered as taking a positive step in helping you and your family begin again on the right track.

declare bankruptcy
declare bankruptcy

Is filing bankruptcy bad? Can it be good?

You’ll listen to a great many people effectively say: “bankruptcy is bad”. Yet why? Why is the general consensus that filing for bankruptcy is a negative thing? While it is true that when you declare bankruptcy or a consumer proposal it is evidence of difficulty with your finances, that’s not the whole story.

A large part of the reason that people state bankruptcy is bad is that they do not understand the procedure. No two bankruptcy instances are alike. People are forced into bankruptcy for a whole host of different factors, most of which are outside their control and for that reason, not their fault.

What Happens to a company when it goes to declare bankruptcy?

The BIA regulates exactly how companies can liquidate or restructure and recover from crippling debt. An insolvent company may make use of Part III Division I of the BIA to reorganize its business and try to end up being profitable again. Management remains in place to run the daily activities of the company. Any significant change in the business organization should need to be approved by the Trustee, the bankruptcy court, or both.

Under a pure liquidation bankruptcy filing, the company stops operations and goes completely dark. The Trustee is assigned to sell the firm’s possessions and the money is used to pay for the bankruptcy administration and to make a distribution to creditors. The priority of payouts is governed by the BIA.

Trust claimants and secured creditors are paid first. For instance, secured creditors take less risk due to the fact that the money that they lend is backed by the firm’s assets. If the lender is concerned that the assets may not at any time be enough to fully cover the loan, it will also require additional backup by way of the personal guarantee of the entrepreneur. That personal guarantee can be either an unsecured promise or additional collateral by the entrepreneur pledging personal assets. They do this to limit their risk of loss if the company declares bankruptcy.

Bondholders have a better potential for recovery than shareholders because bonds are a financial debt of the business. The company promises to pay interest on the money it takes in through the sale of bonds. The company also promises to repay the principal according to the terms of the bond issuance.

Shareholders own the company and also take a higher risk. They might make more if the company does well, yet they could lose money if the company is not successful. The shareholders are last in line to be repaid if the company stops working. Bankruptcy laws establish the order of payment.

If I declare bankruptcy, what happens with the CRA garnishee?

If you declare bankruptcy or file a consumer proposal, personal income tax debt is one type of debt in the category of ordinary unsecured debts. When you’ve filed for bankruptcy or a consumer proposal, CRA can’t take any kind of further collection activity against you. This includes wage garnishment or freezing your bank account. Your Trustee will certainly alert CRA once you declare bankruptcy. The Trustee will also advise CRA to quit any type of collection activity against you.

What is it like to declare bankruptcy summary?

To declare personal bankruptcy is a major life event. However, it is a necessary thing to rid yourself of crippling debt. Most people who declare bankruptcy have been faced with a major life event. The main examples are illness, pay cuts, job loss, or divorce. It is not your fault. I hope this Brandon’s Blog has given you helpful information.

Do you have too much debt? Are you 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 the person who has 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 bankruptcy. We can get you debt relief freedom from one of the alternatives to bankruptcy.

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 debt settlement plan, we know that we can help you.

We know that people facing financial problems need 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 in 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 Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting. We hope that you and your family are safe and healthy.

declare bankruptcy
declare bankruptcy
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Brandon Blog Post

CONSUMER PROPOSAL VS BANKRUPTCY ONTARIO: THE BEST INFO YOU REALLY NEED

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting. We hope that you and your family are safe and healthy.

Consumer proposal vs bankruptcy Ontario introduction

What is the difference between a consumer proposal vs bankruptcy Ontario is a question people calling me up these days are asking. No doubt the looming end of the various COVID-19 government support programs is now sparking this interest. People and businesses were given a reprieve with Canada’s COVID-19 Economic Response Plan and the courts being closed. Now fear is creeping back into everyone’s minds about their debts that essentially were put on hold for the last 6 months.

So, since people are asking me the question, I want to answer the consumer proposal vs bankruptcy Ontario question in this Brandon’s Blog.

Consumer proposal vs bankruptcy Ontario: Who qualifies for and what is a consumer proposal?

A consumer proposal is different from bankruptcy. Consumer proposals are available to individuals only whose overall financial obligations do not exceed $250,000, not including debts secured by their principal residence.

Division 1 proposals are offered to both companies with any debt level and people whose debts go beyond $250,000 (omitting the mortgage or any other debts secured by their primary residence).

Consumer proposals are official methods regulated by the Bankruptcy and Insolvency Act (Canada) (BIA) readily available to individuals. Collaborating with a licensed insolvency trustee (Trustee) serving as the consumer proposal administrator, you make a proposal to:

  • Pay your creditors a percentage of what you owe them over a certain period not exceeding 60 months.
  • Expand the time you need to settle those debts.
  • Or a mix of both.

Payments are made via the Trustee, and the Trustee utilizes that cash to pay each of your creditors their pro-rata share. The consumer proposal must be completed within 5 years from the day of filing.

Consumer proposal vs bankruptcy Ontario: Who qualifies for bankruptcy?

You can declare bankruptcy if you:

  • Live in Canada.
  • Continue business or have assets in Canada.
  • Have financial debts totalling a minimum of $1,000.
  • Are insolvent.

There are different tests for insolvency laid out in the BIA. They are:

  • for any reason, you are unable to pay your financial debts as they generally come to be due;
  • you have ceased paying present debts in the regular course as they usually are due; or
  • the complete worth of your property is not, at a reasonable valuation, enough, or, if sold at a sale under legal process, would not be sufficient to make it possible for repayment of all your financial obligations.

Consumer proposal vs bankruptcy Ontario: What is bankruptcy?

A consumer proposal is an excellent option for you if you can afford to make payments towards your financial debts monthly. If you are entirely unable to make enough payments for a consumer proposal, then bankruptcy is probably your only other alternative.

By statute, the offer you make your creditors via a consumer proposal must be a much better option than what your creditors would certainly get in your bankruptcy. I help people make that analysis during our initial no-cost consultation prior to them selecting the ideal insolvency process for them. We discover the choices readily available, including a consumer proposal vs bankruptcy Ontario. Bankruptcy is an alternative when you cannot afford to fund a consumer proposal to your creditors.

If bankruptcy is the selected alternative, you work with me, as the Trustee, to complete the needed documents. I then submit them with the Office of the Superintendent of Bankruptcy Canada (OSB). When the OSB issues its Certificate, after that you are formally bankrupt.

From that point on, the Trustee will deal directly with your creditors in your place. As soon as you are bankrupt:

  • you will stop making payments to your unsecured creditors;
  • any type of garnishments against your wages or bank account will stop; and
  • any lawsuits for money against you from your creditors will also be stopped.

Consumer proposal vs bankruptcy Ontario: What are the advantages of a consumer proposal?

The benefits of a consumer proposal vs. bankruptcy Ontario are:

  • You maintain all of your assets.
  • Actions against you by creditors, such as wage garnishments will quit.
  • Unlike informal financial debt settlement, the consumer proposal is a legal forum where every one of your creditors has to deal with your restructuring.
  • You do not have to think any more about the “B” word.

Consumer proposal vs bankruptcy Ontario: What are the differences in credit score?

The person that files for bankruptcy will absolutely get an R9 rating. This is the lowest credit rating possible. It will continue to be on their record for at least 7 years. An individual that submits a consumer proposal will have an R7 credit score which is less extreme. It will certainly remain to be on their record for around 8 years overall, from the moment of filing.

You will absolutely pay less than the total you owe with a consumer proposal. Commonly as much as 70% less. All your unsecured financial obligations will be combined right into a simple regular month-to-month payment. This number will be based upon what you can afford.

Consumer proposal vs bankruptcy Ontario: What are the costs and fees of a consumer proposal versus filing for bankruptcy?

When doing a consumer proposal, the Trustee’s charges are paid for out of the repayment you bargain with your creditors. For example, if your consumer proposal has you paying a total amount of $20,000 over 5 years, the Trustee’s fee and disbursements are drawn from those funds. The cost of the consumer proposal is likewise regulated by the BIA. The expense does not go up or down based upon the amount you are required to pay in your consumer proposal.

However, if you were to file for bankruptcy, the cost is once again controlled by the BIA. The Trustee is paid out of the funds available in your bankruptcy. Examples of sources of funds in personal bankruptcy are any surplus income you might need to pay as well as any assets that are available to the Trustee to sell.

If there are not expected to be any type of funds in your bankruptcy, the regulated cost to be funded either by the debtor or a third party guarantor will be around $2,000. This is one more difference between a consumer proposal vs bankruptcy Ontario.

Consumer proposal vs bankruptcy Ontario: Are assets treated differently between a consumer proposal vs bankruptcy?

If you do a consumer proposal, you can keep your assets whereas in bankruptcy your assets in most cases are affected. This includes the equity in your home if greater than $10,000, an auto or other vehicle worth greater than $6,600 (without liens against it), investments, tax refunds, as well as any RRSP contributions made in the 12 months immediately before filing for bankruptcy.

This distinction between a consumer proposal vs bankruptcy Ontario is huge.

Consumer proposal vs bankruptcy Ontario: What if I default on my consumer proposal vs bankruptcy payments?

If you do not keep up your payments on a consumer proposal, and drop 3 months behind, you have defaulted and the consumer proposal is void. You additionally are unable to submit a brand-new consumer proposal. Collection activity by your creditors will begin again.

In bankruptcy, if you do not complete all your obligations, you will not have the ability to get your discharge from bankruptcy. As soon as the Trustee gets its discharge, your creditors will certainly return to collection activities too.

This is one more consumer proposal vs bankruptcy Ontario difference.

consumer proposal vs bankruptcy ontario
consumer proposal vs bankruptcy Ontario

Consumer proposal vs bankruptcy Ontario: When is a meeting of creditors held in a consumer proposal?

A meeting of creditors in a consumer proposal is held if one is requested by creditors that are owed at least one-quarter of the total amount of proven claims filed.

An ask for a meeting needs to be made by the creditors within 45 days of the declaring of the consumer proposal. The OSB can additionally ask for the Trustee to call a meeting any time within that same duration.

The meeting of creditors must be held within 21 days after being called. At the meeting of creditors, they vote to either accept or reject the proposal.

If no meeting of creditors is requested within 45 days of the declaring of the proposal, the proposal will be considered to have been approved by the creditors no matter any kind of objections made later.

How long does it take to complete a consumer proposal vs bankruptcy Ontario?

A consumer proposal is ended when the individual has made the call for payments over the amount of time stated in the proposal itself. In a bankruptcy, the discharge relies on a selection of different aspects, including whether it was the very first time the debtor filed for bankruptcy and if they need to make surplus income payments.

If the borrower has never proclaimed bankruptcy and they do not need to make surplus income payments, then they are entitled to be discharged 9 months. However, if the bankrupt has surplus income, then a first-time bankrupt will need to pay for 21 months before when they can be discharged

If this is not the person’s first bankruptcy, and they do not have surplus income, they cannot get a discharge before the expiry of 24 months. If that person has a surplus income requirement, then they must pay for 36 months before being able to be discharged.

This is another distinction between a consumer proposal vs bankruptcy Ontario.

Consumer proposal vs bankruptcy Ontario: What do consumer proposals and bankruptcy have in common?

Both a consumer proposal and bankruptcy are lawfully binding treatments that are administered by a Trustee. If you are thinking of a consumer proposal vs bankruptcy Ontario, it is vital that you consult with a Trustee to ensure that you completely understand what’s involved, and the costs. You can talk with friends or family that might have applied for one or the other before. It is also important that you get referrals from professionals you trust.

Declaring bankruptcy or doing a consumer proposal are both issues of public record. That means there will be a permanent public record concerning your insolvency that can be accessed by anyone. If your debts are joint or co-signed or guaranteed by someone else, the other person is liable for the debt. That is the case even if you file for either a consumer proposal or personal bankruptcy.

Even these similarities still point out differences between a consumer proposal vs bankruptcy Ontario.

How do I choose between a consumer proposal vs bankruptcy Ontario?

As you can see, when you consider a consumer proposal vs bankruptcy Ontario, there are most definitely differences between the two. But they are both formal insolvency processes to eliminate your debt. What’s essential, though, is that you discover the best method to get yourself back on the right track in such a way that will assist you to achieve your long-term goals.

Consumer proposal vs bankruptcy Ontario: How to file for bankruptcy?

In order to take advantage of either a consumer proposal vs bankruptcy Ontario, you must involve a Trustee. This is a person or company licensed by the OSB to provide the insolvency process. The 10 actions listed below are a guide to the bankruptcy procedure.

  • Call a qualified Trustee and go to a meeting with him or her to talk about your personal circumstance and your alternatives including if it is possible for you to prevent bankruptcy.
  • Deal with the Trustee to complete the needed forms. The Trustee will after that submit the bankruptcy with the OSB.
  • The Trustee notifies your creditors of the bankruptcy.
  • You participate in a meeting of creditors if one is called.
  • You participate in 2 counselling sessions.
  • Based on your personal exemptions, the Trustee markets your available assets; you may additionally need to make surplus income payments to the Trustee.
  • In certain circumstances, you might need to participate in an examination held by an OSB representative.
  • The Trustee prepares a report describing your actions throughout the bankruptcy.
  • You go to the discharge hearing if needed.
  • You obtain your discharge from your bankruptcy.

Afterward, the Trustee completes the administration, including paying a dividend to your creditors, if offered.

Consumer proposals and bankruptcy Ontario aren’t the only ways of obtaining debt relief and consolidating debt

There are additionally other ways of fixing debt problems that do not include a formal process or paying a fee. If you honestly wish to thoroughly and objectively take a look at all your options, contact a Trustee, and meet with him or her. They’ll pay attention to your scenario and concerns and advise you on what will work best for you even if you do not need to file for either a consumer proposal vs bankruptcy Ontario. Their assistance is normally cost-free and non-judgmental.

At my Firm, declaring bankruptcy is only encouraged until all other potential solutions have investigated. A consumer proposal is the only government-approved financial debt settlement strategy and is always the far better bankruptcy alternative.

Consumer proposal vs bankruptcy Ontario: Move on with your life

I hope you have enjoyed this consumer proposal vs bankruptcy Ontario Brandon’s Blog. Both a successfully completed consumer proposal or obtaining your discharge from bankruptcy lets you get back on the road to financial health, relieve the stress you face, and bring you:

  • Freedom from lawsuits and garnishments;
  • The ability to live better than just hanging on one payday to the next;
  • Improved credit scores; and
  • Better health and well-being.

Do you have too much debt? Are you 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 the person who has 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 bankruptcy. We can get you debt relief freedom.

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 debt settlement 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 in 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 Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting. We hope that you and your family are safe and healthy.

consumer proposal vs bankruptcy ontario
consumer proposal vs bankruptcy Ontario
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Brandon Blog Post

WHAT IS A LICENSED INSOLVENCY TRUSTEE? READ OUR BEST AND COMPLETE 12 STEP CHECKLIST

what is a licensed insolvency trustee
what is a licensed insolvency trustee

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting. We hope that you and your family are safe and healthy.

If you would prefer to listen to the audio version of this what is a Licensed Insolvency Trustee Brandon’s Blog, please scroll to the very bottom and click on the podcast.

What is a Licensed Insolvency Trustee introduction

What is a Licensed Insolvency Trustee is a question I see asked regularly. Is it the same as a bankruptcy trustee? The answer is yes. A bankruptcy trustee is an old name. Licensed Insolvency Trustee is the new name. The Office of the Superintendent of Bankruptcy (OSB) changed the name in 2015. The change came about partly because of submissions made by the Canadian Association of Insolvency and Restructuring Professionals (CAIRP).

The change came about since the new name more precisely explains the breadth of solutions they offer to consumers and businesses. The purpose of this Brandon’s Blog is to describe for the stressed-out person who is facing financial challenges, or the entrepreneur whose business is in financial trouble, what is a Licensed Insolvency Trustee all about and give a 12 point checklist to help you find the best one for you.

What is a Licensed Insolvency Trustee?

A Licensed Insolvency Trustee is a financial and debt specialist licensed and supervised by the OSB. The OSB released a directive calling for trustees to utilize the classification of Licensed Insolvency Trustee to more precisely show the solutions they offer.

What is the difference between a Licensed Insolvency Trustee, a credit counsellor, and a debt settlement business?

Licensed Insolvency Trustees, credit counsellors, and financial debt settlement companies, all provide financial guidance. However, they are extremely different.

A Licensed Insolvency Trustee is the only person who can file a bankruptcy or consumer proposal for you. A trustee can also offer you financial advice and help you plan on how to repay your debt. Credit counsellors and debt settlement businesses can give you financial advice and information. They can help you make a budget and make plans to repay your debt. But they can’t file a bankruptcy or consumer proposal for you.

Unlike the others, a Licensed Insolvency Trustee is an Officer of the Court, and as such, is the only financial debt relief professional in Canada legally allowed to administer insolvency proceedings under the Bankruptcy and Insolvency Act (Canada) (BIA).

What is a Licensed Insolvency Trustee and what can they do for me?

A Licensed Insolvency Trustee will first gather info to comprehend the individual’s or business’s entire circumstance, examine the effects of different choices, discuss them with you and also suggest the one he or she really feels is ideal for you. When filing a restructuring debt settlement proposal or for bankruptcy, Licensed Insolvency Trustees will direct the debtor through the whole procedure, will certainly prepare and submit the needed paperwork, and be the one to deal directly with all of your creditors.

So what is a Licensed Insolvency Trustee? It is the only expert that can offer you a complimentary consultation and advice as well as recommendations. After that, she or he will either direct you what to do if you do not need an insolvency process to repair your financial concerns or administer the insolvency procedure if one is required.

what is a licensed insolvency trustee
what is a licensed insolvency trustee

What is a Licensed Insolvency Trustee and what sets them apart?

By now you should realize that a Licensed Insolvency Trustee is licensed and supervised by the OSB. No other professional dealing with consumer or business debt issues is. Licensed Insolvency Trustees also have to go through a rigorous course of study and examinations in order to obtain that license.

So what is a Licensed Insolvency Trustee? It is someone who:

  • successfully complete the Chartered Insolvency and Restructuring Professional (CIRP) Qualification Program (CQP), the CIRP National Insolvency Exam and the Insolvency Counsellor’s Qualification Course;
  • passed an Oral Board of Examination;
  • has been found to be a person of good character and reputation; and
  • has been cleared through an RCMP investigation.

What is a Licensed Insolvency Trustee and how are their fees calculated?

There are set calculations and rules that all Licensed Insolvency Trustees must strictly follow when administering a bankruptcy or proposal. Trustee fees are calculated and drawn from the funds that have been paid into each individual proceeding. Licensed Insolvency Trustees are not allowed to simply set their own fees and rates.

In most bankruptcies and proposals, the Licensed Insolvency Trustee’s fees are based on a tariff set by the BIA. Unlike other professionals, working with a Licensed Insolvency Trustee is not a “fee for service” – this means that a phone call to discuss any questions you have or get ongoing support throughout the process won’t result in an invoice.

What is a Licensed Insolvency Trustee and how do I find one?

The best way to find one is through a referral from someone that you trust. This could be your lawyer, accountant, a relative or a close friend. Someone you trust, who refers you to someone they trust, is always the best. I take pride that my Firm has many times helped relatives of lawyers and accountants who we work with. If they are willing to refer a family member to us, that is the highest compliment anyone can pay to me as a professional.

You can also contact a local non-profit credit counselling service. There are two benefits to doing this. A local non-profit credit counselling organization is probably one of the most objective places to find out about all your debt relief options. They’re not trying to sell you anything, and they’re not paid on commission. So they can actually help you look at all your options and see if insolvency (a consumer proposal or bankruptcy) is your best option or if there is something else that might make sense.

The OSB maintains a searchable database of all Licensed Insolvency Trustees in Canada. You can search for a trustee located near you. Finding a trustee near you may be convenient, but, it will not give you a sense of whether you feel you can work with that professional.

You can also search for “licensed insolvency trustee” or “bankruptcy trustee” in your favourite search engine. Just be mindful that the companies who appear at the top of your search results with the word “Ad” next to their name have paid for that listing. It has nothing to do with their expertise or rating.

Looking at the online reviews given by people who have worked with them is a great way to start to get a feel for each professional. If they write blogs or have videos posted online, that will also help to get a feel for the personality of the Licensed Insolvency Trustee.

What is a Licensed Insolvency Trustee and have they been recognized by any rating agencies?

Best Bankruptcy trustees in Vaughan

I am pleased to report that, for the 5th year in a row, Ira Smith Trustee & Receiver Inc. has been voted as one of the Top 3 Licensed Insolvency Trustees in Vaughan, ON. (Yes, there are more than 3!). It is gratifying to get recognition fo the professional services we provide and our commitment to full service and support for our clients.

So what is a Licensed Insolvency Trustee and how should I go about choosing one? There are many factors that you must consider. Below is our 12 step checklist to make the best choice for you.

What is a Licensed Insolvency Trustee? Our 12 step checklist to help you find the best one for your situation

  • Do they have the necessary qualifications?
  • How many cases like yours have they done before?
  • Do they go to Court also or do you have to hire a lawyer to do so?
  • Is bankruptcy right for you and is it your only option?
  • How much will it cost you?
  • Will you be dealing with the actual licensee ultimately responsible to the OSB for your file?
  • Will you only be seeing one of many clerks once you enter the insolvency process?
  • How did you feel after meeting the people at their office after your initial consultation?
  • Do they practice exclusively in the bankruptcy/insolvency area?
  • Do they have experience in only personal insolvency matters, only corporate insolvency matters, or both?
  • Do they have enough experience and the time to handle your matter?
  • Will they communicate in a timely manner with you throughout?

As you can see, when trying to answer what is a Licensed Insolvency Trustee and who is the right one for me question, there are many things to consider.

What is a Licensed Insolvency Trustee summary

I hope you found this what is a Licensed Insolvency Trustee Brandon’s Blog about helpful. Sometimes things are too far gone and more drastic and immediate triage action is required.

Do you have too much debt? Are you 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 the person who has 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 bankruptcy. We can get you debt relief freedom.

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 debt settlement 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 in 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 Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting. We hope that you and your family are safe and healthy.

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WHEN ARE 2019 TAXES DUE CANADA: 4 AMAZING WAYS TO CRA PERSONAL DEBT RELIEF

The Ira Smith Trustee Team Is Absolutely Operational And Ira, In Addition To Brandon Smith, Is Readily Available For A Telephone Consultation Or Video Meeting.

When are 2019 taxes due Canada introduction

I have noticed recently that Canadians are searching online the question “when are 2019 taxes due Canada“. That leads me to believe that many people are unclear about the changes this year. Some people are searching because they don’t want to miss the payment deadline. Others may be searching because they want to know when the deadline is that they are going to miss because of the COVID-19 pandemic has hit them right in the wallet or purse.

The purpose of this Brandon’s Blog is to go over for individuals:

  • the important tax filing and payment dates for 2019 taxes;
  • what needs to happen on those dates and what if you can’t make it on time; and
  • ways you can deal with Canada Revenue Agency (CRA) to eliminate your tax debt

I remind you that I and my Firm are not personal or corporate tax advisors. We are licensed insolvency trustees. This Brandon’s Blog is not meant to be income tax advice or to replace professional income tax advice. To learn when are 2019 taxes due Canada for your personal situation, contact your own professional income tax advisor.

Is the Tax Deadline Delayed for 2019 Tax Returns?

You may have wondered how COVID-19 influences the filing of your 2019 tax return, repayment of any income tax owing and your tax obligations generally in terms of deadlines, or payments or refunds and tax credits. Apart from those that are self-employed, the income tax return filing date is usually April 30 of every year.

Identifying the turmoil brought on by COVID-19, the CRA provided most Canadians extra time to submit a 2019 tax return. CRA provided us till June 1, 2020, aside from self-employed people operating as a proprietorship or partnership. For those self-employed people, the filing day remained June 15, 2020, for a 2019 tax return.

So since that due date has passed, nevertheless, this year there might be a technicality as I describe below. The government wants every cent they are owed and they want it in a good time. Thus, there are fines for filing a late income tax return if you have an unpaid tax amount. If you are entitled to a refund or your tax balance is nil, there will be no charges for sending in your return after the deadline date.

Charges for filing your income tax return late when you owe the CRA are levied. The CRA will charge you a late-filing penalty if you file your 2019 income tax return after September 30, 2020 (notwithstanding the actual filing date was June 1), and you owe tax obligation that continues to be unpaid. The fine is 5% of your 2019 tax owing, plus 1% of your income tax owing for each complete month your return was filed after September 30, 2020, to a maximum of twelve months.

So without making you any guarantees, there is a real possibility that if you missed out on the June 1 due date, if you submit and pay on or prior to September 30, 2020, and you do not have any kind of prior years’ late-filing penalty, one may not be levied for 2019.

If the CRA charged a late-filing penalty on your return for 2016, 2017, or 2018 your late-filing fine for 2019 may be 10% of your 2019 balance owing, plus 2% of your 2019 balance owing for each and every complete month your return was submitted after September 30, 2020, to a maximum of 20 months.

So it seems the CRA will forgo arrears interest on 2019 tax obligations related to the specific income tax returns from April 1, 2020, to September 30, 2020. This procedure for your 2019 tax obligation does not terminate penalties and interest on a taxpayer’s account prior to April 1, 2020, to September 30, 2020. It does make it less complicated on a taxpayer’s 2019 tax debt that it will certainly not rise via interest charges throughout this challenging coronavirus pandemic time.

Why file by the June 1 deadline if no payment is due until September 30?

Filing your income tax return on time lessen any negative results on your tax credits and benefits payments. If your 2019 return has actually not been assessed by the CRA, details from your 2018 return will be used to compute benefits as well as credits payments up until September 2020. That will guarantee you continue to obtain vital payments. Nevertheless, without filing your 2019 tax return, you may not be getting exactly the correct amounts you are entitled to.

I doubt you desire any kind of disturbance to benefit payments you get for government programs such as the Canada Child Benefit (CCB) and GST/HST tax credits, as well as amounts from provincial programs that are carried out by the CRA.

By filing a return by the due date, you will lessen this impact. Also, if you are owed a refund, the earlier you file, the earlier it will show up in your pocket. By registering for direct payment, you’ll get your refund quicker.

If you are expecting a tax refund for sure you would certainly want to submit on time. CRA may not chase you for it if you don’t owe them for 2019. Submitting your tax return is the only way to get that refund. Remember, a refund means that you gave too much of your money to CRA during the year. For sure you want it back!

However, registering for a direct deposit could lead to other problems. For more information on that, read my Brandon’s Blog CANADA REVENUE AGENCY LOGIN: MASSIVE CREDENTIAL STUFFING CAUSES MANY PROBLEMS.

When are 2019 taxes due Canada: Are there new deadlines for GST/HST returns and payments as well?

Excellent information for the self-employed as well as entrepreneur small-business owners: while the CRA is not changing the filing target dates for GST/HST returns, it is forgoing late filing charges for returns submitted by the end of June. As for payments, any type of GST/HST installments that are due March 27 through June 2020 can be deferred up until June 30, interest-free.

When are 2019 taxes due Canada: What is the payment date?

The target date to pay amounts owed was initially extended to September 1, 2020. On July 27, the CRA revealed that the payment deadline for a person’s 2019 income tax obligation was additionally extended to September 30, 2020.

There are a few other concerns surrounding the declaring of your 2019 income tax return and the payment of any balance owing that you must understand:

  • Some taxpayers may have received a Notification of Assessment that says the date for settlement is April 30, 2020, or September 1, 2020. If you did get such a notice giving those dates for when are 2019 taxes due Canada, it is now incorrect.
  • On May 15, it was revealed that qualified Canadians who are currently obtaining the GST/HST credit and/or CCB payments will continue to get them up until the end of September 2020. Benefits starting in July 2020 and those arranged for August and September won’t be disrupted.
  • If CRA is unable to evaluate your 2019 return by early September 2020, your estimated benefits and/or credits will certainly stop in October 2020 and you’ll have to repay the approximated amounts that were released to you starting in July 2020.
  • By prolonging the due dates for federal returns and instalments, the CRA is additionally expanding the due dates for provincial/territorial individual returns and instalments. Note that the CRA does not administer the tax system for the province of Quebec.

When are 2019 taxes due Canada: What if I owe CRA and cannot pay it?

If you find yourself to be in a financially challenging situation then you need to take proactive activity. The COVID-19 pandemic has hit Canadians hard. I envision there will be many individuals that do not have the needed cash to pay their 2019 income tax debt by September 30. It is necessary to be proactive and positive since the CRA has special powers.

The CRA does have the capacity to take collection procedures without having to go via the court system. The federal government can garnishee your wages or salary, get the money you have on deposit at a bank as well as freeze your bank accounts. They can also make demand on anyone they think owes you money.

There are 4 ways to CRA personal debt relief:

  • If you are able to, borrow the money you owe and pay it to CRA on or before September 30. I don’t think this option needs any further explanation.
  • Contact a CRA collection officer and make a payment arrangement repayment plan. A payment arrangement is an agreement you make with the CRA. This allows you to agree on a monthly amount to pay that you can afford and then provide CRA with a series of post-dated cheques.
  • Consider filing a consumer proposal to consolidate your income tax and other debts so you can make one manageable monthly payment. Through a consumer proposal, you will pay much less than the total of all your debts.
  • If you cannot see your way to being able to do any of the three options listed above, the final one is to use personal bankruptcy to eliminate your income tax and other debts.

If you are able to make a settlement arrangement you have to maintain the payment plan by making certain your regular monthly post-dated cheques clear the financial institution every single time. Also, ensure that all your returns are filed promptly. If you fail to do any of these things, they can terminate the payment arrangement and begin collection action to recoup the tax debt.

September 30, the date when are 2019 taxes due Canada is coming up fast. If you know that you will not be able to pay that liability, don’t fret and don’t waste time. Give us a call. We will help you put together the best strategy that meets your overall needs.

When are 2019 taxes due Canada: A consumer proposal

A consumer proposal is a government-regulated debt negotiation program submitted with a Licensed Insolvency Trustee (Trustee). The purpose of submitting one is to eliminate problem financial debts to make sure that you can start the process of resuming life debt-free.

It can just be filed with a Trustee. When you sign your papers, they are filed with the federal government. It is a legal process under the Bankruptcy and Insolvency (Canada) (BIA).

This procedure is a lawful arrangement between you and you’re unsecured creditors to eliminate all of your debt by repaying only a part of the debt that you owe. If a simple majority by dollar amount accept the terms you have offered, then your consumer proposal is binding on all your unsecured creditors.

This court-sanctioned procedure enables you to bargain negotiation with your creditors. When you are carrying out your consumer proposal by making your required payments, you must also file your income tax returns as normal. CRA manages your refunds in the normal course. If you owe tax for any time period after the filing date of your consumer proposal, you additionally pay that amount as regular.

In a consumer proposal, you maintain your assets and as long as you make all the required payments you promised to make, nobody can garnishee your salary or earnings. If you have filed a consumer proposal, personal income tax obligations arising before your filing is an unsecured debt. When you have filed CRA can’t take any type of additional action against you, like wage garnishment, or freezing your bank accounts. As the Trustee, we alert CRA once you file as well as advise it to stop any additional action against you.

For further information on how a consumer proposal could work for you, please get in touch with me. If you know that when are 2019 taxes due Canada you will not be able to pay them, give us a shout so we can help put together a plan of attack for you.

When are 2019 taxes due Canada: Personal bankruptcy in Canada

If none of the above ways can work for you, then you will have to consider personal bankruptcy in Canada. Personal bankruptcy should be considered by anyone who:

  • is insolvent;
  • has seen a Trustee who has assessed you and determined that you will not be able to complete a consumer proposal; and
  • owes more than $1,000.

As soon as you become bankrupt you will be required to surrender most assets to the Trustee, other than those that are exempt under provincial law or are fully encumbered. These assets will then be sold and the money gained from the sale of the properties will be dispersed according to the BIA. You may additionally have to pay a part of your earnings to the Trustee for the benefit of your creditors.

Personal tax obligations can be discharged when you receive your discharge from personal bankruptcy. Many various other financial debts will also be released. If you have liability to CRA from being a director of a company, those financial obligations can also be discharged.

If you have actually declared personal bankruptcy, personal income tax debt is an ordinary unsecured financial debt. As soon as you’ve applied for bankruptcy CRA can’t take any kind of additional action versus you, consisting of a wage garnishment or freezing your accounts. We will inform CRA when you file as well as instruct it to quit any additional activity against you to try to collect their debt.

Your spouse will not be affected by your bankruptcy unless your spouse:

  • co-signed a debt;
  • owns assets with you jointly; or
  • has received a transfer of property from you at a time when you owed CRA money.

A creditor can go after your spouse for payment in these circumstances and also he/she will be called to account and pay.

You may also wish to check out our Top 20 personal bankruptcy FAQs. So if you know now that when are 2019 taxes due Canada you will not be able to pay it, consider giving us a call and we can run through your various options and tailor a plan to fit your unique circumstances.

When are 2019 taxes due Canada: Summary

I hope you found this is Canada when are 2019 taxes due Canada Brandon’s Blog informative. The Ira Smith Team family hopes that you and your family members are remaining secure, healthy, and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

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

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

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

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

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

when are 2019 taxes due Canada
when are 2019 taxes due Canada
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CCAA CANADA: OUR EXTRAORDINARY GUIDE TO 2020 TROUBLED CANADIAN COMPANIES SEEKING BANKRUPTCY PROTECTION

ccaa canada
ccaa canada

The Ira Smith Team is totally operational and both Ira and Brandon Smith are here for a telephone consultation, conference calls and virtual meetings.

Keep healthy and safe everybody.

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

CCAA Canada introduction

We are now about 5 months into this COVID-19 pandemic since the state of emergency was announced in Canada. There has also been a lot of media coverage of the many negative effects it has had on Canadians and the Canadian economy. I thought it might be interesting at this point to do some review on CCAA Canada. Now I am not talking about the Canadian Collegiate Athletic Association. Rather, I am going to look at the companies that have so far filed for creditor protection under one of Canada’s insolvency statutes. The Companies’ Creditors Arrangement Act.

When a company tries to reorganize under CCAA Canada – What does CCAA mean?

When Canadian companies who owe more than $5 million experience financial problems, they might go to court to seek creditor protection, filing under the CCAA Canada. That’s federal legislation that primarily offers a company time to try to work out its financial troubles with those to which it owes money.

As I have written before in various Brandon’s Blogs, if the company owes less than $5 million it can file under the Part III Division I reorganization section of the Bankruptcy and Insolvency Act (Canada). Although it is the other Canadian federal insolvency statute and some procedures are more streamlined and handled slightly differently, the net effect is the same as the matters I explain below about the CCAA Canada.

What does CCAA Canada protection mean? CCAA vs Chapter 11

“Bankruptcy protection” is a term closely associated with a US company filing under Chapter 11 of the US Bankruptcy Code. That term has been adopted into the Canadian insolvency dialogue. In Canada, it most likely means that the Canadian company has applied to a Canadian court to look for protection from their creditors by filing under CCAA Canada.

A firm files under CCAA Canada for consent to come up with a restructuring plan strategy that would certainly provide it time to rearrange its financial affairs to make sure that it can keep operating.

As long as a CCAA order continues to be in place, creditors are not allowed to start or continue any kind of action to recover money owed to them. They can’t try to confiscate the firm’s property or try to petition it into bankruptcy, without the prior approval of the court. This is called the CCAA stay of proceedings.

Considering that a CCAA Canada filing is made because a business is deeply in the red, the initial order of business is to strike some kind of satisfactory arrangement with its creditors. That includes secured creditors, unsecured creditors and shareholders.

Can CCAA Canada protection be extended?

Yes, under CCAA Canada, court-ordered protection can be extended. After Algoma Steel filed under CCAA Canada in April 2001, the firm had gotten eight extensions prior to emerging with a new ownership framework.

Who gets priority under a CCAA Canada filing?

Not all creditors are treated equally. There is a priority generally established for the ranking of creditors and the order in which they might be paid by a debtor.

First in a CCAA Canada restructuring, will be any government claims that rank as a priority deemed trust claim. Next will be any new charges ordered by the court as part of the restructuring. Examples of such court-ordered security charges are Key Employee Retention Plans, financing the company needs in order to survive during the restructuring period and the costs of the professionals involved in the restructuring for the company.

Secured creditors, including lenders and bondholders, usually head the list next when it concerns getting back their money. Secured creditors might hold security such as a general security agreement and/or a mortgage as security for their debt held.

Unsecured creditors follow next on the list of creditors. Unsecured creditors have supplied goods or services on credit to the company without being given any security. In the many retailer filings that have been in the news recently, even customers who have paid deposits for items not yet picked up or who have gift cards are also unsecured creditors. Last on the list are the shareholders.

What happens if the court doesn’t approve a CCAA Canada application or the sides can’t agree on how to restructure debt?

If a restructuring effort is not successful, or if the court does not approve it, a company can be placed right into receivership or bankruptcy. The main difference between a CCAA Canada filing and the options of receivership or bankruptcy, suggests that the company can no longer be a going concern and will be liquidated.

The choice between receivership or bankruptcy depends on the nature and extent of the creditors. If there is a major secured creditor who is owed more than the assets are worth, on a failed restructuring, the court will allow that secured creditor to appoint a receiver (or the court will appoint the receiver). The receiver will then liquidate the company’s assets and repay the secured creditor as much as possible. If there are no secured creditors (which is highly unusual), or there will be money left over from the liquidation after full repayment of the secured creditors, then there will be bankruptcy. The licensed insolvency trustee acting as the bankruptcy trustee will make a distribution to the unsecured creditors.

Sometimes the type of company or industry will require both receivership and bankruptcy. Retail liquidations are a good example. The reasons are outside the main topic of discussion for this CCAA Canada Brandon’s Blog, but, one day, I will do one on that topic.

What happens to shareholders in a CCAA Canada restructuring?

Holders of common stock generally come last. On a regular basis in a CCAA Canada restructuring, they tend to get wiped out. Their old shares come to be worthless. Usually, brand-new shares are issued in the restructured company.

Holders of preferred shares rank ahead of common shareholders (for this reason the title “preferred”) yet more often than not do not get back the full value of their shares.

Public company shares in a company if it enters CCAA Canada protection and all trading is halted

When a public company announces that it has filed under CCAA Canada, a trading halt is applied. The listing exchange notifies the marketplace that trading is not taking place. While the stop is in effect, brokers are forbidden from publishing quotations or signs of interest in trading. The listing exchange will end the trading stop by taking the actions called for by its rules. Generally, the marketplace is alerted that a trading halt is about to end either at the same time the halt finishes or a few minutes before.

When a company gets on the edge of bankruptcy, its stock value mirrors the danger of a CCAA Canada administration becoming liquidation. Purely as an example, a business that used to trade at $50 might trade at $2 per share as a result of the bankruptcy environment. After entering into a CCAA Canada filing, the company’s stock price might be up to $2.10. This value is composed of the potential amount that shareholders might get after liquidation and also the possibility that the firm might restructure and run effectively in the future. Investors can buy and sell these $2.10 shares in the market. The actual value does not reach zero unless the likelihood of restructuring is so low that liquidation becomes a certainty.

While the company is in a CCAA Canada restructuring, its stock will certainly still have some value, though it will likely plummet. The regulatory authorities will watch it very closely and shut down trading if any anomalies are encountered where investors could get hurt. This was recently seen in the United States in the Hertz Chapter 11 bankruptcy protection administration.

Nonetheless, if the business restructures and emerges from CCAA Canada reorganization as a solvent going-concern, its share price might start to rise again. How much will depend on the unique restructuring issues. If a business rises from its restructuring stronger than ever, investors can take advantage of the turnaround, as old stock may get cancelled during the insolvency process, and new shares issued.

List of CCAA filings under CCAA Canada during the COVID-19 pandemic so far?

There have been many media reports about companies filing under CCAA Canada during this coronavirus pandemic. I thought it would be useful to look at which companies have filed and what industries seem to be most affected between the calling for the state of emergency and the last date for which these statistics have been published, July 31, 2020. All of this information comes from statistics published by the Office of the Superintendent of Bankruptcy Canada.

The number of companies and the industries that these companies engage in is allocated as follows:

Cannabis6
Charity1
Construction4
Energy4
Entertainment1
Hospitality1
Manufacturing1
Media1
Mining2
Pulp and Paper1
Real Estate2
Retail8
Technology1
Travel1
34

 

The following chart shows the filings by the province in this same time frame:

ccaa canada
ccaa canada graph

CCAA Canada summary

I hope you enjoyed this CCAA Canada Brandon’s Blog. The Ira Smith Team family hopes you and your family are staying safe, healthy and well-balanced. Our hearts go out to every person who has been affected either through inconvenience or personal family tragedy.

We are all citizens of Canada and we have to coordinate our efforts to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Family members are literally separated from each other. We look forward to the time when things can return to something close to normal and we can all be together again physically.

Ira Smith Trustee & Receiver Inc. has always employed clean and safe habits in our professional practice and continues to do so.

Revenue and cash flow shortages are critical issues facing entrepreneurs and their companies and businesses. Should you take advantage of the CEBA? I say a resounding YES!. I just wanted to highlight all of the issues that you should consider.

If anyone needs our assistance, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

Are you now worried just how you or your business are going to survive? Those concerns are obviously on your mind. This pandemic situation has made everyone scared.

The Ira Smith Team understands these 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. 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 makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy. We can get you debt relief now.

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.

We understand 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.

The Ira Smith Team is totally operational and both Ira and Brandon Smith are here for a telephone consultation, conference calls and virtual meetings.

Keep healthy and safe everybody.

 

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BANKRUPTCY MEANS: SERIOUSLY, CAN IT EVER MEAN BEGGING FOR A BANKRUPTCY ANNULMENT?

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

Bankruptcy means introduction

From my perspective, bankruptcy means that a person or company has either filed an assignment in bankruptcy or the court has issued a bankruptcy order against the debtor. The debtor has taken the voluntary action to seek relief and the benefits obtained by doing so under the Bankruptcy and Insolvency Act (Canada) (BIA). Or a court, based on the application of one or more creditors, has ordered that the BIA applies and the debtor is adjudged bankrupt.

As I have written in the past, this is different from insolvency. Insolvency is the financial state where a company or person cannot meet their liabilities as they come due or whose assets, if sold at fair value, would not be enough to pay off all of the liabilities. Bankruptcy is a legal state.

I recently read an article about Mr. Stanley Frank Ostrowski aka Frank Ostrowski, who lives in Winnipeg, Manitoba. Mr. Ostrowski filed an assignment in bankruptcy on February 12, 2019. He listed his assets having a value of $250. He stated that his liabilities were $259,621. This is his second bankruptcy. His first was in 1983 and he received an absolute discharge in 1985.

The article states that Mr. Ostrowski has now made an application to the court to annul his bankruptcy. This Brandon’s Blog looks at: Is it possible to annul a bankruptcy and under what circumstances? Put another way, is it really the case that bankruptcy means you can file for bankruptcy and then say oops, I didn’t really want to file? I am not really sure that is how bankruptcies work.

The reasons why Mr. Ostrowski thinks bankruptcy means it can be annulled

In May 1987, a jury decided that Mr. Ostrowski was guilty of first-degree murder. In March 1992, he was found guilty of possession of cocaine for the purposes of trafficking. He was sentenced to 15 years in prison, concurrent with his life sentence for murder.

He served 23 years, 2 months and 24 days in prison. He got out of jail on December 18, 2009. In 2014, then federal justice minister Peter MacKay asked Manitoba’s Court of Appeal to review the case. Then justice minister MacKay believed that there was a miscarriage of justice with respect to the murder conviction.

In a November 2018 decision, the Court of Appeal set aside the conviction after it discovered a miscarriage of justice took place when two vital details were not revealed to the defence or the court. While the court set aside his conviction, it did not acquit him. In their decision, the three-judge panel said they thought there was enough proof against the accused, which the court could have found him guilty even if full disclosure had been made.

The court also held that it would be unfair to have another trial given that it had been 32 years since the shooting. The court also entered a judicial finding that the charge is stayed from further prosecution.

In June 2020, Mr. Ostrowski retained legal counsel to commence an action for damages because of his wrongful conviction. His lawyers have not yet launched the claim but they plan to. The article said that he will be seeking $16 million in compensation.

Now he wants to have his 2019 bankruptcy annulled. He believes he has a realistic chance of receiving sufficient compensation to be able to settle all his debts. So with all this background information, do I think his bankruptcy means that he can get his bankruptcy annulled?

Bankruptcy means: what happens if I declare bankruptcy?

I have written before about what happens when a person or company declares bankruptcy. There is a responsibility to make full disclosure to the licensed insolvency trustee (formerly called a bankruptcy trustee) (Trustee) all of your assets, liabilities, income and expenses. The debtor also must give to the Trustee all provincially non-exempt assets so that the Trustee can sell them for the benefit of the creditors.

In his bankruptcy filing documents, Mr. Ostrowski did not make mention of this potential lawsuit that had not yet been launched. He also did not indicate that he had the right to such an asset. If he had, there would be two realistic options.

He could have taken the position that the amount of recovery in a lawsuit not yet launched is unknown and speculative. So, the action should only be valued at $1 as a placeholder. By doing so, he would have made full disclosure to his creditors and to his Trustee as to the existence of this potential asset.

If Mr. Ostrowski had disclosed this asset and valued it at more than $259,371, then he would not have met the asset test for being insolvent and potentially would not have been able to file for bankruptcy. I say potentially because, in his affidavit, Mr. Ostrowski makes no mention of what his income and expenses were at the time of filing for bankruptcy or now. Mr. Ostrowski does not disclose in his affidavit whether or not he has to pay any surplus income to his Trustee for the benefit of his creditors.

Can bankruptcy be annulled?

Annulling a bankruptcy is more than just cancelling a bankruptcy. It is erasing it to the point as if it never happened. It is a complete elimination of the bankruptcy. If it was the person’s first bankruptcy, and it was annulled, they could honestly say they never were bankrupt.

To figure out what are the odds that Mr. Ostrowski will be successful in his application to annul his bankruptcy, we need to look at several factors. First, what reasons does Mr. Ostrowski say are the basis as to why his bankruptcy should be annulled?

In his affidavit sworn June 8, 2020, the reasons he gives are:

  1. “I have a realistic chance of receiving sufficient compensation to be able to settle my debts with my creditors in a manner that would be more advantageous to the creditors than if I pursue bankruptcy.”
  2. “I am advised by…” my lawyer “…that when he advised…” my Trustee, “… of my intention to seek an order annulling my assignment in bankruptcy…” my Trustee “…did not object to it.”.

That is it. No other reasons. To Mr. Ostrowski, his bankruptcy means that maybe perhaps he can do better for his creditors than they would get in his bankruptcy and his Trustee doesn’t object to his trying to annul his bankruptcy.

With all due respect to his legal counsel on this bankruptcy annulment application who only has what he has to work with, I rate those reasons somewhere between weak and lame! The bankruptcy annulment process was not designed for the convenience of the bankrupt.

Bankruptcy means when will a court annul a bankruptcy?

First, Section 181(1) of the BIA gives the court the authority to annul a bankruptcy. It says:

“181 (1) If, in the opinion of the court, a bankruptcy order ought not to have been made or an assignment ought not to have been filed, the court may by order annul the bankruptcy.”

This authority is discretionary. Generally, the court will only annul an assignment if it is shown that:

  • The debtor was not insolvent at the time of filing.
  • It was an abuse of process of the court
  • The debtor was trying to commit a fraud on his or her creditors.

If Mr. Ostrowski’s affidavit is the only evidence submitted in his application to annul his bankruptcy, he has not shown that the bankruptcy assignment “ought not to have been filed”.

Second, there have been cases where an assignment in bankruptcy has been annulled. The list of general reasons why the court found that a bankruptcy order ought not to have been made or an assignment ought not to have been filed are:

  1. An assignment in bankruptcy was completed and was to be held in escrow while the debtor negotiated with his creditors. The assignment was only to be filed if a resolution could not be worked out. A deal was reached but the assignment was filed in error. In other words, a verifiable mistake.
  2. The bankruptcy was of no benefit to the creditors. The creditors would receive a distribution but would bear all the costs of the bankruptcy administration.
  3. The debtor was restrained by court order from dealing with all of his assets without giving his estranged wife seven clear days’ notice and he filed an assignment in bankruptcy with no notice given.
  4. Joint assignment by a husband and wife where it was evident that a large amount of debt was from the husband’s unincorporated business and the wife was not in partnership with him.
  5. A bankruptcy assignment purportedly filed by an infant!
  6. The second assignment filed before the bankrupt received a discharge from the 1st bankruptcy.
  7. The husband filing an assignment in bankruptcy in an attempt to disgorge himself of his assets while embroiled in bitter family law proceedings.
  8. Directors of a company whose assets were already being administered under a court-appointed receiver having filed an assignment in bankruptcy for the company.

In all the above situations, the court DID annul the bankruptcy. The court did not agree that bankruptcy means it was the right choice in those situations.

Bankruptcy means when will a court NOT annul a bankruptcy?

Third, there have been cases where an assignment in bankruptcy was NOT annulled. The list of general reasons why the court found refusing the annulment request was appropriate are:

  1. The sole purpose of the bankruptcy was to rearrange the priorities of certain creditors.
  2. A bankruptcy to defeat the enforcement attempts of a judgment creditor.
  3. The sworn statement of affairs failed to show the name and amount of a creditor.
  4. The debtor had no assets.
  5. Debtor was insolvent and did not bring an application to annul the bankruptcy until 4 months after filing an assignment in bankruptcy. The court decided that an application to annul a bankruptcy only because the debtor did not wish to continue with the bankruptcy process should be brought immediately after the filing of the assignment in bankruptcy.

The last reason why the court did not annul a bankruptcy, is pretty much the reason Mr. Ostrowski says he wants his bankruptcy annulled. Only in his case, he is bringing the application some 18 months after becoming a bankrupt.

Interestingly enough, that last reason was a Manitoba case, Baker (Bankrupt), Re, 1997 CanLII 23100 (MB QB). In that case, the bankrupt contended that the Trustee filed the bankruptcy documents with the Office of the Superintendent of Bankruptcy in error. However, she waited for 4 months and the court was not persuaded that the filing was an error!

In Mr. Ostrowski’s case, his reasons boil down to it will be more convenient for him! As you can probably tell by now, I don’t place a high probability of his chances of success in persuading the court to annul his bankruptcy. But then I am not the judge.

Bankruptcy means what should Mr. Ostrowski do?

The answer as to what his bankruptcy means and what Frank Ostrowski should do lies within the BIA. Mr. Ostrowski has two choices and I believe it will be what the court decides.

First, the BIA allows for a bankrupt, with the permission of the inspectors in his bankruptcy, if any, to file a restructuring proposal. He could get that started right now without any court application.

If his debts are truly over $250,000, based on the claims filed to date, then he can file a proposal under part III division I proposal under the BIA. If the claims filed are a total under $250,000, then he could file a consumer proposal. Either way, the administration would continue under the BIA.

His proposal would be a very simple one. It would essentially say that he has a claim against several parties for what his lawyer believes is $16 million. He knows he will get at least enough to pay all of his creditors in full. So, if you vote in favour of my proposal, if I win, enough money will be paid to the Trustee to pay all the creditors in full. If I don’t win, or there isn’t enough money to pay everyone in full, all creditors will share in whatever is available.

Once the restructuring proposal is accepted by his creditors and approved by the court, his bankruptcy is annulled. He will get exactly what he is asking for. His creditors will get paid presumably in full. They will not just get the chance to have their debts settled as Mr. Ostrowski states in his affidavit.

Second, section 144 of the BIA says that the bankrupt is entitled to any surplus remaining after payment of all creditor claims in full, with interest, and the cost of the bankruptcy administration. So, if Mr. Ostrowski is successful and gets $16 million, that money would go to his Trustee, after the legal costs of winning that award. The Trustee would keep what is necessary to pay all the claims in full, with interest, and the costs of the bankruptcy administration. Mr. Ostrowski would keep the rest.

I recommend the first way, the restructuring proposal route because that could get Mr. Ostrowski’s bankruptcy annulled fairly quickly, which is what he is asking for.

It will be interesting to see what the court decides. I will let you know when I find out.

Bankruptcy means summary

I hope you found this bankruptcy means Brandon’s Blog informative and interesting.

The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

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

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

Income, revenue and cash flow shortages are critical issues facing entrepreneurs, their companies and individual Canadians. This is especially true these days. Some people think that bankruptcy means the end of their life. Bankruptcy should be a last resort for anyone. We strive to help people and companies avoid bankruptcy. But if bankruptcy is necessary, do not think of it as the end of life. It really is a fresh new beginning. That is what bankruptcy means.

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

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

bankruptcy means
bankruptcy means
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Brandon Blog Post

INSOLVENCIES IN CANADA: THE CALM BEFORE THE SCARY STORM?

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

Insolvencies in Canada introduction

Insolvencies in Canada are at a record low. Is it the calm before the scary storm?

Consumer insolvencies in Canada have been driven to unusually reduced degrees in recent years because of sustained low-interest rates and strong property values.

In this Brandon’s Blog, I discuss what could very well happen in the 4th quarter of 2020 and into 2021.

Insolvencies in Canada – recent history

The lower number of insolvency filings is not a new phenomenon. Insolvencies in Canada have been at historically low levels for many years. It was not until last year that personal insolvency filings increased year over year.

In 2019, consumer insolvencies for the 12-month period finishing December 31, 2019, increased by 9.5% compared to the 12-months ending December 31, 2018. Personal bankruptcy decreased by 1.2%, while consumer proposals were 17.9% higher.

After many successive years of steady decline, business bankruptcies in Canada had reached a plateau level in 2019. Typically speaking, business bankruptcies in Canada have been stable.

During the 1st quarter of 2020, the Office of the Superintendent of Bankruptcy Canada (OSB) reports that between the 4th quarter of 2019 and the end of the 1st quarter of 2020, for insolvencies in Canada:

  • Total insolvency filings decreased by 5.4%.
  • Consumer filings were down by 5.5%.
  • Business insolvency filings were 2.6% lower.
  • In all cases, bankruptcy filings were drastically lower and restructuring proposals were essentially flat.
  • For personal filings, Alberta was basically flat while the other provinces and territory showed decreases.
  • In business filings, Ontario showed a slight increase (8.3%) and British Columbia showed a huge increase (43.5%). Again, it was restructuring proposals, not bankruptcy, making up the majority of business filings. All other provinces and territories showed a decrease.

Then the effects of the economic shutdown of the country started taking hold in April 2020.

April 2020 insolvencies in Canada and the United States

The total variety of insolvencies in Canada (both bankruptcy and proposal filings) decreased by 38.7% in April 2020 contrasted to March 2020. Personal bankruptcy decreased by 41.5% and proposals decreased by 37.2%.

The number of insolvencies filed in April 2020 was 43.5% less than the total in April 2019. Consumer bankruptcies decreased by 43.1%, while consumer proposals decreased by 54.8%.

The story in the United States is very similar. American Banker reports that presently in the US, personal bankruptcy filings are actually reduced year over year. It reports that according to information from the federal courts, there were 186,000 consumer bankruptcy cases in the first quarter of 2019. By comparison, there were 175,000 for the initial quarter of 2020.

A lot more noticeably, the rate of consumer insolvency cases for April of 2020 was 46% lower than in April of 2019.

There are a variety of reasons in both countries. From my discussions with a couple of US bankruptcy lawyers, I am friendly with, it seems the reasons in both countries are generally the same.

In no particular order, the main reasons are:

  • Mortgage payment deferral programs masking what might otherwise be increased delinquencies.
  • Lower overall credit card spending while people are at home in self-quarantine.
  • Various government programs supplying much-needed cash to unemployed people and businesses.
  • Government programs deferring the timing for filing income tax returns and the payment of income tax.
  • Moral suasion so far stopping banks, credit card companies and collection agencies from aggressively making collection attempts during this time.
  • The closure of the courts making it impossible to sue anyone.

    insolvencies in canada
    insolvencies in canada

The economy is starting to reopen

In conjunction with the federal government, the provinces and territories are starting to reopen cities and businesses. No doubt there will be a lot of growing pains as the economy reopens. What should we expect? What will it mean for insolvencies in Canada?

In his first speech as Governor of the Bank of Canada, on June 22, 2020, Tiff Macklem stated that he expects there will be an initial boost to the Canadian economy as it reopens and activity resumes. He does not expect that good news to last very long. Rather, he expects there will be the 2nd stage of economic recovery that will certainly be long and slow, due to the remaining unpredictability around the coronavirus.

The federal government will need to wean Canadians off of the various support programs. When that happens, all the financial pain currently hiding under the radar will rise to the forefront. COVID-19 support programs, payment deferrals and other “time outs” will end and the courts will reopen. Creditors will get back to business as usual in chasing delinquent accounts. The federal, provincial and territorial governments will feel they have done enough to the tune of trillions of dollars. Their attitude will be, in so many words, it is now time for you to stand on your own two feet again.

In fact, some government attitudes are already changing.

Will temporary layoffs be a harbinger for business insolvencies in Canada?

Throughout the coronavirus pandemic, BC seemed to handle their lockdown and other COVID-19 things a bit differently than the other provinces and territories. As they now consider reopening, BC businesses are worried.

British Columbia businesses are discouraged by Labour Minister Harry Bains’s failure to recognize the seriousness of problems facing the mainly small and medium-sized businesses. Their issue is the possibility for thousands of companies to have to make an insolvency filing. Their main worry is that they will be compelled to make severance payments as a result of the unexpected scenarios brought by the COVID-19 pandemic.

The Minister has it within his power to supply a Ministerial Order to expand the temporary layoff time frame under the Employment Standards Act to provide companies with the breathing room” required to survive, recoup, and facilitate return-to-work for laid-off staff.

All provinces and territories face extraordinary difficulties as a result of the economic results from COVID-19. Few business owners can plan for or have the cash-on-hand to terminate all or a considerable part of their labour force at the same time throughout the very best of times.

BC companies will be faced with fears as the clock ticks to target dates beginning in very early July requiring several companies to either recall or permanently terminate laid-off staff members. They don’t have enough business or money to rehire everyone. They also don’t have the cash to make the severance payments. Without legislative support, this problem will face all Canadian businesses.

In the nick of time, the federal government has come to the rescue. On June 23, 2020, Prime Minister Justin Trudeau announced that the federal government has expanded the period for temporary layoffs by as much as 6 months. Employers now have more time to recall staff members who were laid off due to COVID-19.

Now, for employees who were laid off before March 31, the government has proposed that their employers have the earlier of 6 months or up until December 30 to recall their staff. For employees laid off between March 31 and September 30, their company will have up until December 30, unless a later recall day was given on their layoff notification.

I caution that this is a proposal floated by our PM right now and not actual legislation. Labour legislation is largely left up to the provinces and territories. It is interesting to note that the Feds seem to be stepping into this. As we all know, ultimately, businesses will either be able to survive or will have to restructure under our laws for insolvencies in Canada.

Will extending employee recalls be a harbinger for personal insolvencies in Canada?

So now that employees can expect to remain unemployed for longer, what is that going to mean? For several years now polls have shown that Canadians are on the brink of insolvency. As I already mentioned, rock-bottom interest rates and rising real estate values, leading to lots of home equity lines of credit room to borrow on. This has kept Canadians in debt and out of becoming one of the statistics for insolvencies in Canada.

So the question is, once the Canada Employment Response Benefit (CERB) runs out, what will the unemployed do? Seems to me there are a few options, none of them good:

  1. Cut back on spending as much as possible. In places like the Greater Toronto Area (GTA), you have to be a magician to be able to live on $2,000 per month (after putting away the amount you will have to pay eventually in CERB income tax).
  2. Burn through the rest of your savings until you have no cash.
  3. As a result of 1 or 2, go deeper into debt on your lines of credit and credit cards until you have no more borrowing room.

Once all of this has happened, the only thing left to do will be to consult with a licensed insolvency trustee (formerly called a bankruptcy trustee) to discuss your realistic options for eliminating debt.

Insolvencies in Canada summary

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

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

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

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

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

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

insolvencies in canada
insolvencies in canada
Categories
Brandon Blog Post

THE CONTROVERSIAL QUEBEC PLAN TO REDUCE CREDIT CARD DEBT IN CANADA

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

Stay healthy, well balanced and safe and secure everyone.

Credit card debt in Canada introduction

Yesterday I received my current credit card statement in the mail. I scanned the pages and something on the page titled “Important Changes To Your Credit Card Agreement” caught my eye. The province of Quebec is trying to reduce credit card debt in Canada for its residents. I will explain it in this Brandon’s Blog.

Average Canadian household debt 2020

Credit rating agency Equifax Canada says typical consumer debt boosted 2.7% to get to $72,950 on average per household at the end of 2019. At the end of 2019, TransUnion reported that Canadians charged $100 billion in bank card financial obligations for the first time ever and they’re not done contributing to it. So credit card debt in Canada was certainly out of control then.

I won’t bother quoting what both the Equifax and TransUnion projected as to what would happen to average Canadian household debt in 2020, or about credit card debt in Canada. Suffice to say that in late 2019, an Ipsos poll carried out for Manulife Canada found that 45% of Canadians report spending more than they take home, and also 40% question if they will ever get rid of all of their debt. Nearly half of Canadians are afraid of being indebted for life, and 67% assume everyone is in the very same situation.

In the first quarter of 2020, unemployment was low and the Canadian economy felt like it was in decent shape. Then came the coronavirus pandemic. The fallout from COVID-19 and the shutdown of the Canadian economy have yet to be fully felt. My crystal ball is definitely broken because of it.

Average line of credit debt in Canada

Suffice to say from everything that I have read so far, average Canadian household debt is going up, due mainly to job losses and falling incomes. The Canadian government statistics about Canadians receiving the Canada Emergency Response Benefit (CERB) are staggering. As of June 4, 2020, the government has processed applications from 8.4 million Canadians. Overall as of that date, the federal government has paid out $43.5 billion of CERB benefits.

So with close to 9 million people getting CERB payments up until now, lots of Canadians are making a great deal less money than they did two months back. According to Statistics Canada, Canadians earned monthly, on average, $4,383; those on CERB make $2,000 a month. While it’s great to have some cash coming in, that gap (as well as it will certainly be a lot more for some) is likely to be a significant problem for out-of-work Canadians.

The Quebec plan to slow down credit card usage in Canada did not start out being controversial

To understand what additional pressure there will be on Quebeckers come August 1, 2020, we first have to understand the history of the issue. Quebec’s intentions started out being very good, especially for the time it was developed. But, that was then and now is now!

On November 15, 2017, Quebec’s Bill number 134, “An Act mainly to modernize rules relating to consumer credit and to regulate debt settlement service contracts, high-cost credit contracts and loyalty programs”, was enacted. On August 1, 2019, particular elements of this legislation, aimed at trying to suppress charge card financial obligations in Quebec, began. So everyone had advance warning to change their spending ways.

Starting then, new credit card accounts opened required the minimal monthly payment to be upped to 5% of the outstanding balance on those brand-new charge cards. For cards provided prior to August 1, 2019, cardholders could continue to pay a minimum of 2% of the monthly balance. They had until 2025 to start paying the brand-new minimum of 5%. Nonetheless, the minimum monthly payment was gradually being boosted by half a percentage point annually. This starts on August 1, 2020, up till it gets to the five percent level.

At the time, consumer advocates felt that other provinces will be watching carefully what Quebec is doing. The Quebec government certainly thought that credit card debt in Canada was a problem. It wanted to be proactive in dealing with this problem for Quebeckers. If you had to pay more every month on your old debt, hopefully, people would start feeling the pinch and adjust their budgets to spend less using credit cards. That was the theory.

So that was what was printed on my credit card statement. A reminder that if you lived in Quebec and were responsible for repaying the debt on the credit card, the minimum monthly payment was about to increase.

Given the current state of the Canadian economy and people’s personal financial affairs, this requirement in Quebec to pay more every month on your credit card debt cannot be good news.

Total credit card debt in Canada, not monthly payments, is the real problem

This leads to what or who is the real culprit. Quebeckers having to pay more each month as a minimum monthly payment is not the problem. I don’t mean to single out Quebec residents. I only mention them because it is Quebec that enacted the legislation. The real problem is that Canadians’ total credit card debt in Canada is too high and people cannot pay off the balance they charged each month on the due date. So, they are only making minimum monthly payments, while continuing to charge more, to stay alive until the next month.

Increasing minimum monthly payments is not making a plan to be debt-free

High charge card debt is clearly jamming a lot of people. Time will tell just how effective a technique it is to elevate the minimum monthly payment to 5% to tackle outstanding credit card debt. Due to the current situation, it is pointless to start looking at data for the rest of 2020. Hopefully, this year is not indicative of what future years will look like.

In my opinion, it would have been a lot more impressive for Quebec to at the very same time develop online financial education modules for its people. What is truly required is to show people that paying just the minimum monthly balance doesn’t solve their total debt problem.

As I have stated in many of my blogs, to create a real plan to be debt-free, people need to:

Unpaid credit card debt consequences Canada and how to avoid them

Right now, there is an unofficial moratorium on the banks and collection agencies calling people who are delinquent in their credit card payments. All the lenders are treading lightly, given the many problems currently in the Canadian economy. Given all the problems, now may be the best time to try to resolve long outstanding credit card debt issues.

Once things get back to whatever normal is going to look like, lenders and collection agencies will be calling everyone again. If a satisfactory payment plan is not entered into, lenders may sue once the courts open up again. Once a lender gets a judgment against you, they can garnishee your wages or your bank account.

Under the Ontario Wages Act, R.S.O. 1990, c. W.1, a financial institution that has a judgment against you (like a bank or bank card business) can garnishee up to 20% of your net wages (after statutory deductions for taxes, CPP, and EI). Try living with that kind of wage garnishee and/or your bank account frozen.

So anyone with debt problems needs to realistically look at the various solutions that may be available. I have already talked above about how to start tackling debt problems, especially credit card debt in Canada.

Once you have redone your budget, have family buy-in so everyone is onside helping the household and you are following it, there are extra actions that you can take in dealing with your creditors. These steps include:

Negotiating yourself with the credit card company – Right now is the perfect time to negotiate. Lenders are not receiving payments and many have deferral programs set up. If you have cash on hand, now is the perfect time to approach a lender and offer a discounted amount that you can afford to pay if they agree. Make sure you have properly budgeted so that if you pay that cash out now, you can still survive until your work and income returns back to what it was pre-pandemic.

Non-profit credit counselling agency help – If you don’t feel you can negotiate on your own, go to a community non-profit credit counselling agency. They can review your budget to make sure that it is realistic and give you additional help. They can also try to strike a deal with your creditors for you to either pay the full balance out over time without additional interest or penalties or, a reduced payout now.

Consolidation loan – If you are working from home and still have all your income, a decent credit rating and you can get a loan to consolidate your debts to pay them out, that has many benefits. The issue is that the annual interest rate charged on the consolidation loan must be significantly less than the average interest rate you are paying on your debts. Now you can pay off either your total debt, or the lower negotiated balance, and then just have the lower interest rate one loan to repay.

This can be done under either the self-negotiating method or if you are using a not for profit local credit counselling agency to help you. Either way, stay away from payday loan lenders.

Consult with a licensed insolvency trustee (formerly called a bankruptcy trustee) – Whether things are too far gone to use any of the above methods, or you just want to know what all of your options are, consult with a licensed insolvency trustee to determine how best to deal with your credit card debt in Canada.

Most licensed insolvency trustees, including my Firm, provide a no-cost initial consultation. I can go over with you all of your options. We will discuss all that I have already mentioned, plus the concepts of a consumer proposal, Division I Proposal and bankruptcy. I will give you the pros and cons of each, give you my best recommendation and then you will have all the information you need to decide.

Credit card debt in Canada summary

The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

I hope you have found this credit card debt in Canada Brandon’s Blog helpful. Quebec’s original plan for helping its residents reduce credit card debt in Canada did not start out to be controversial. It was designed to get Quebeckers to think about how they were getting into credit card debt and to force them to work into their budget a larger monthly minimum payment. The aim was to curb out of control spiralling credit card debt. The COVID-19 pandemic and the resulting economic shutdown combined with the upcoming August 1 changes will no doubt make things harder for Quebeckers only able to make minimum monthly payments on their credit card balances.

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

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

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

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

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

credit card debt in canada
credit card debt in canada

Stay healthy, well balanced and safe and secure everyone.

 

Categories
Brandon Blog Post

HOW HERTZ TEACHES US MODERN AND RISKY RULES OF BUSINESS BANKRUPTCY IN CANADA AND THE USA

business bankruptcy in canada
business bankruptcy in canada

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

Stay healthy, well balanced and safe and secure everyone.

If you would prefer to listen to the audio version of this business bankruptcy in Canada and the USA Brandon’s Blog, please scroll to the bottom and click play on the podcast.

Business bankruptcy in Canada Introduction

Late in the day on Friday, May 22, 2020, Hertz Global Holdings Inc. (Hertz) filed for Chapter 11 bankruptcy in Delaware. The filing gives Hertz some breathing room to operate its business. During this time, Hertz also needs to come up with a business turnaround plan and a debt restructuring plan that creditors can support. The movement of Hertz stock last week teaches us some modern and risky rules of business bankruptcy in Canada and the United States.

Corporate bankruptcies and the Hertz investors

Hertz stock closed on the NASDAQ exchange on May 22 at US$2.84. It dipped to a low of US$0.40 on May 26. Legendary investor Carl Icahn sold all of his Hertz shares at an average price of $0.72. He dumped his 39% stake in Hertz at a loss of nearly $2 billion. Last Friday Hertz shares closed at US$2.57 per share. This morning, the trading touched US$3.40 per share.

So Hertz is up handsomely since May 26. Hertz has filed for bankruptcy protection. It doesn’t make sense that investors should be pushing the stock up. Hertz is selling off its fleet and further depressing the used car market. So far there is no indication that a business plan and debt reduction plan has been developed, let alone accepted by the creditors.

As far as assets, they have locations and a database of customers. But every major rental car company also has locations and a database. Whenever business and leisure travel resumes to pre-COVID-19 levels, if you can’t rent a car from Hertz you will rent it from a different company. So what are the non-fleet assets worth?

So on the surface, the investor money finding a home in Hertz stock and pushing up the stock price doesn’t make sense. So, are there savvy investors getting into Hertz or are they all just following the herd and will all end up losers?

Why Hertz filed for Chapter 11 bankruptcy protection

Since 2014, Hertz has had four different CEOs. It is difficult to develop and implement a cohesive business strategy with such turmoil in the senior management ranks. As the coronavirus pandemic brought travelling to a sudden halt, Hertz suffered dramatically as a mass of its revenue depended on business travellers and vacationers renting vehicles when arriving at their destination airport. Nobody knows how long it will take until travel gets back to where it was and what Hertz needs it to be.

Hertz’s debt has been increasing as it invested heavily in its vehicle fleet. They may have also missed the mark in the mix of vehicles consumers want, requiring it to take on even more debt to make further fleet purchases. Hertz could no longer afford to make the interest payments on its debt load. At the time of its bankruptcy filing, Hertz had US$1 billion of cash and US$13 billion of debt.

The $13 billion in financing Hertz made use of to acquire its fleet of 500,000 automobiles. The financing was done via what is known as asset-backed securities. These are connected straight to the value of the vehicles. When the value of the cars drops, Hertz must make up the difference in cash within about three months, unless values rebound before that time.

However, with the coronavirus pounding the brakes on the economy and eliminating employment for so many, the drop in the value of used vehicles is expected to remain that way for a long time. Hertz knew that it could not make up the difference to its lenders when they made a demand, which was their right. Hence the bankruptcy filing.

The modern risky rules of investing in business bankruptcy in Canada and the USA

Normally, in a public company restructuring, it is not only the creditors that take a hit. Shareholders usually get a good drubbing. Share values fall and new shares are issued to raise capital. This further dilutes the holdings and value of those holdings for shareholders. But investors must believe that Hertz will come back. How else can you explain the surge in the share price?

Before this year, the company had ten consecutive quarters of positive growth. They were still losing money, just not as much. Investors must believe that Hertz will be able to survive. They must believe that the company although leaner and smaller, this is the time to jump on an opportunity to make money.

I am not a financial advisor, I am not saying whether this is a good or bad investment. It certainly is a very risky one. All I am saying is that as a licensed insolvency trustee (formerly called a trustee in bankruptcy) administering business bankruptcy in Canada, this does not make any sense to me.

I guess only time will tell if these investors pushing up the stock price are insightful risk-takers or losers. Carl Icahn doesn’t believe it.

Business bankruptcy in Canada and the USA summary

I hope you have found this business bankruptcy in Canada and the USA Brandon’s Blog helpful.

The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

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

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

Revenue and cash flow shortages are critical issues facing entrepreneurs and their companies and businesses. This is especially true these days.

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

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

Stay healthy, well balanced and safe and secure everyone.

Categories
Brandon Blog Post

BANKRUPTCIES IN ONTARIO: OUR EXCLUSIVE 6 THINGS LIST CREDITORS MUST KNOW ABOUT CANADIAN BANKRUPTCY

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

Stay healthy, well balanced and safe and secure everyone.

Bankruptcies in Ontario -Introduction

Much of the insolvency chatter developing from the COVID-19 pandemic world in which we find ourselves is now concentrating on the waterfall of brand-new bankruptcies in Ontario that are predicted to arrive. I have previously written about some of the big-name US retailers that have filed for Chapter 11 bankruptcy protection.

Businesses shut down, job losses, government funding for people and businesses to try to hang on through this coronavirus are all in the headlines. What our “new normal” will look like and which companies and jobs will survive, right now, is anybody’s guess.

In this Brandon’s Blog, I want to highlight things creditors must know about canadian bankruptcy and bankruptcies in Ontario. By being well-versed, creditors will hopefully be able to better understand what is in store for them and for the debtors.

1. Bankruptcies in Ontario – the automatic stay of proceedings

In Canadian insolvency matters, an automatic stay of proceedings happens when a company or person files under the Bankruptcy and Insolvency Act (Canada) (BIA) for either:

  1. Bankruptcy
  2. Consumer proposal
  3. Corporate or large personal restructuring

The stay of proceedings is automatic under the BIA. Other than in one specific situation which I will touch on in a minute, absent proof that some sort of fraud is being committed on the court, a judge will not interfere with the automatic stay provisions. So an unsecured creditor will not be able to start or continue any action for collecting on a debt.

The one exception is in a restructuring where the major secured creditor goes to court and provides evidence that no matter what the restructuring may look like, they will never support it. The secured creditor would at the same time be requesting the court to lift the stay of proceedings so that they can enforce on their security.

Absent a restructuring proposal that promises to pay out that secured creditor 100% PLUS proof that the company or person has a realistic chance of refinancing to take out that secured creditor. Even in that situation, the court could give the debtor some time to pull it off, but it will be a very short lease. Otherwise, the secured creditor will probably get their wish and the restructuring effort will end.

In the case of a privately appointed receiver, there is no automatic stay of proceedings. This is notwithstanding that the conduct of the receiver in a private receivership is also governed by the BIA. The reason there is no automatic stay of proceedings is that a private receivership is not a filing under the BIA.

In either a court-appointed receivership or a corporate restructuring under the Companies’ Creditors Arrangement Act (Canada) (CCAA), the stay of proceedings authority does not come from statute per se. The respective statutes allow for the judge to order a stay of proceedings. That language is then incorporated into the court order appointing the receiver or authorizing the bankruptcy protection CCAA filing. In these cases, the court is available for anyone to make an application to lift the stay if they can prove that they are being prejudiced. Again, normally only secured creditors will be able to show prejudice.

2. Bankruptcies in Ontario – Know whether, when, and where proof of claim needs to be submitted

For bankruptcies in Ontario and restructurings, it is important to know what kind of insolvency proceeding is taking place. The notice you receive from the licensed insolvency trustee (formerly called a bankruptcy trustee) (Trustee) will tell you what kind of proceeding it is. It will also provide a proof of claim form to be completed. The notice will provide all the details.

It is important that you know:

  • The details.
  • How to complete a proof of claim form.
  • Where to send it into.
  • What timelines there may be.

Some creditors wish to file a proof of claim only so that if a dividend is declared they will get one. In that case, you can complete and file the proof of claim any time before the Trustee issues a final dividend. The Trustee must send a final notice to all named creditors who have not yet filed a proof of claim before issuing a final dividend.

Some creditors wish to actively participate in the insolvency process. They may wish to attend the meeting of creditors, vote on a restructuring proposal under the BIA. If creditors wish to actively participate in bankruptcies in Ontario, they should complete and file the proof of claim with the Trustee within the time-frame indicated in the notice accompanying the proof of claim form.

In a receivership, there will only be a need to file a proof of claim if the receiver has realized enough money from the sale of assets to pay out the trust claims and secured creditor claims in full and now has money for the unsecured creditors. This is very rare. In that situation, the receiver will conduct a claims bar process later on in the administration. That is when a notice with a blank proof of claim form will be sent out to the known creditors.

In a restructuring under the CCAA, first, the restructuring plan, called the Plan of Arrangement, is finalized. Then the Trustee will send out notices and blank proof of claim forms for creditors to complete and submit. Filling out the form at that stage will allow creditors to actively participate in the meeting and voting on the plan, as well as be in line to receive a payment.

3. Bankruptcies in Ontario – Obtaining a preference repayment from a future bankrupt debtor is not illegal or unethical, but you may have to give it back

If a customer of yours offers to pay you money, even if it turns out to be on the eve of an insolvency filing, take it! Always take the money; stress over any claim for it by a Trustee later.

The premise of the BIA is that all unsecured creditors will be treated equally. So, if certain unsecured creditors receive partial or full payment on the eve of filing, and then the debtor goes bankrupt, there is a presumption of a preference. The onus is on the creditor who received payment to rebut the presumption of a preference. If the Trustee is successful in attacking such a transaction, then the creditor must pay over the money to the Trustee. The creditor will also have spent money on its own legal fees. There will also probably be a cost award for all or a portion of the Trustee’s legal costs also.

Notwithstanding all this, it is better to have the money than not. Perhaps the Trustee will not knock on your door. Or, maybe you can avoid a lot of heartache by agreeing to and paying over a settlement amount that is less than 100% of what you received. Finally, there is a very limited number of defences to rebut the presumption of a preference. Perhaps your situation falls under one of them.

Taking the money is not immoral, unethical or illegal. You just may not be able to keep it if your customer files for bankruptcy after making the payment to you.

4. Bankruptcies in Ontario – review the Trustee’s Report very carefully and ask questions

The Trustee’s report outlines issues of importance regarding the conduct of the debtor both pre and post-filing. Sometimes, there may be an action that the Trustee could take to enhance the recovery of an asset, but lacks the funding to do so.

In those cases, a creditor or a group of creditors can choose to either:

  1. Fund the Trustee to take the action for the general benefit of all unsecured creditors.
  2. Get court approval to take the action in their own name under s.38 of the BIA.

It would be unusual for creditors to fund the Trustee. The simple reason is that they would be responsible for 100% of the costs but have to share any recovery with all the other unsecured creditors on a pro-rata basis. For this reason, it is not done.

Many times a creditor or group of creditors will choose to obtain court permission to take on the action in their own name. The court will insist that the creditor group make the opportunity to all creditors. However, a “buy-in” will be set. Most of the time other creditors won’t pony up to join in. Either they are not sophisticated enough to realize the potential benefit or they feel it is not worth their spending money in that way.

Under an s.38 action, if successful, the creditor can first pay back all its costs in doing the action. Next, they are entitled to keep up to the full amount of their claim. If any funds are left over, they must be paid over to the Trustee.

I am administering a bankruptcy file right now where there was foreign real estate. I did my investigation and determined that although saleable, the properties would take many years to sell and then to repatriate the money back to Canada. The major unsecured creditor wished to take control of the sales process. So, her lawyer got court approval for her to do so under s.38 of the BIA. No other creditor joined in with her. The properties are now sold, we have so far received a six-figure payment from the surplus sitting in her Canadian lawyer’s trust account after she was fully repaid all of her costs and the amount of her claim.

There is another six-figure amount sitting in a foreign country. We have retained legal counsel in that country now to get the rest of the funds repatriated into our trust account. Once received, we will finalize our vetting of all proofs of claim and make a distribution to the unsecured creditors.

5. A discharge from personal bankruptcies in Ontario ends the debtor’s liability for pretty well all debts

Unless the Trustee of a bankrupt corporation raises enough money for all of the creditors to be paid off in full, with interest, a corporation is never discharged from bankruptcy. In personal bankruptcy, the debtor is eventually entitled to an absolute discharge. The absolute discharge can be:

  • Received straight away when the debtor is able to be discharged.
  • Given once the bankrupt fulfills all of the conditions of discharge.

There are only a handful of claims that are not discharged upon the discharge of the bankrupt. Those are:

  1. Trust claims.
  2. Secured claims.
  3. Those claims which fall under s.178 of the BIA.

If a debtor wishes to get out of a liability where the creditor holds security, such as vehicle financing, the debtor needs to trigger a default prior to filing for bankruptcy. So continuing with the vehicle example, the debtor could tell the lender that it cannot afford to make any more payments. The debtor would then give the vehicle and the keys to the lender.

The debtor should then wait for notice from the lender that the vehicle has been sold, the lender has suffered a shortfall and demands payment for the shortfall. The shortfall is an unsecured claim. The debtor now files for bankruptcy after the shortfall claim has crystallized. There now is no longer a secured claim for this debt.

If the debtor does not wait for the shortfall notice from the lender, they run the risk that the shortfall occurs after the date of bankruptcy. In that case, the shortfall unsecured claim will not be a debt discharged by the bankrupt’s discharge.

I have previously written about the s.178 claims. You can read about them in my blog.

Lacking affirmative action by a debtor or Trustee, all secured claims go through the bankruptcy unaffected. It is incumbent on the Trustee to get a lawyer’s security opinion on the validity of any secured creditor’s security as against the Trustee. I have a corporate bankruptcy file now where the legal opinion was that the security was not valid. I advised the creditor who did not object. I guess they already knew!

6. Bankruptcies in Ontario – A fully completed restructuring also discharges most debts

The most essential element of reorganization situations under the BIA and CCAA that creditors need to know is about how debts get discharged in a restructuring. Similar to a personal bankruptcies in Ontario, in a successfully completed corporate restructuring, the debtor’s debts are discharged. Again, except for trust claims and secured creditor claims, the ordinary unsecured debts of a corporation are fully discharged when a restructuring plan that has been accepted by the creditors and approved by the court is fully completed. When the payout is made to the creditors and the company has successfully completed it, there are no pre-filing debts remaining.

So what is the significance to creditors? Well, if you are a director of the company, any debts that would have been a director liability, other than for a trust claim, vanishes. As there is no debt left, there is nothing left for the director to be responsible for.

Likewise, if someone personally guaranteed a premises lease to the landlord, if the lease is disclaimed as part of the restructuring, then the landlord has an unsecured claim. Once that claim is fully discharged in the restructuring, there is no debt left for the guarantor to be responsible for.

Creditors should also know that a company in a restructuring, may come to you to renegotiate your agreement with the company. If you refuse, the company could disclaim the agreement and any claim you have will be an unsecured claim in the restructuring.

7. Bankruptcies in Ontario bonus tip

It is better to get professional advice about extending credit to a customer and the best way to do it before you approve the credit. Getting professional advice after they have filed for bankruptcy limits your options.

Bankruptcies in Ontario – Summary

I hope you have found this bankruptcies in Ontario Brandon’s Blog helpful.

The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

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

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

Revenue and cash flow shortages are critical issues facing entrepreneurs and their companies and businesses. This is especially true these days.

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

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

Stay healthy, well balanced and safe and secure everyone.

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