Tag: Office of the Superintendent of Bankruptcy

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CONSUMER PROPOSAL IN CANADA: CONSUMER PROPOSAL TORONTO ONTARIO REVIEW

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consumer proposal in canada

Consumer proposal in Canada: Introduction

In this vlog, I try to provide answers to the most asked questions about a consumer proposal in Canada (the Proposal, the Plan or CP). A Proposal is an official method controlled by the Bankruptcy and Insolvency Act (BIA) readily available to people.

Consumer proposal in Canada: Collaborating with the trustee

Collaborating with a licensed insolvency trustee (LIT) serving as administrator of your Plan you make an offer to:

  • pay your creditors part of the total you owe them over a specific duration;
  • expand the length of time you need to repay that part of your financial debts; and
  • stay clear of bankruptcy

Consumer proposal in Canada: The consumer proposal payments

Payments are made with the LIT. The LIT uses that cash to pay each of your creditors their in a proportionate share based on the proven claims filed by them with the LIT. The financial obligations need to be repaid through the CP within 5 years.

Consumer proposal in Canada: Who qualifies?

You need to be a person and not a corporation. Your overall financial debts need to not surpass $250,000. This limit doesn’t include debts from a home loan, mortgage or credit line supported by your primary house.

You need to likewise satisfy the insolvency requirements. This implies that:

  • your financial debts value is above the value of your possessions;
  • if you sold off your assets you wouldn’t adequate funds to repay your financial obligations completely;
  • you are having difficulty making a complete settlement on every one of your financial obligations monthly

Making just the minimal month-to-month payments as disclosed on your credit card or loan statements do not count as repaying your financial debts.

Consumer proposal in Canada: What is the price of a consumer proposal?

Your Plan payments also cover the fee for the Proposal. There are no different costs either for:

  • submitting a Plan; or
  • charges paid to the LIT to administer your CP


Consumer proposal in Canada: How long will my consumer proposal take?

A Plan could last for no more than 5 years. You could reduce the term either by boosting the amount of your month-to-month repayment or by providing a round figure repayment all at once. The one-time repayment makes sense if you can get an adequate loan from either a financial institution or family member.

Consumer proposal in Canada: What are the steps of a consumer proposal?

A CP permits you to pay all or part of your unsecured debt in regular monthly amounts over time. The maximum length of time is 5 years.

In drafting your Plan, the LIT must make sure that your consumer proposal provides a better result for your creditors than in your bankruptcy.

The normal steps are:

  • A LIT will consult with you and develop a Plan that you both think will work for both you as well as serve the needs of your financial institutions and others you owe money to
  • The LIT administering your CP will send the Proposal to the Office of the Superintendent of Bankruptcy
  • The LIT will mail out the CP to your creditors who then have 45 days to approve or deny it
  • The creditors can approve or deny your Plan at a meeting of creditors.

Typically, in a CP in Canada, there is no need to hold a meeting.

Consumer proposal in Canada: Can a consumer proposal eliminate debt collectors and avoid my income from being seized?

Yes, as soon as the filing of a Plan happens, all creditor seizure activities stop. However, it does not stop family law payments under a proper settlement agreement or court order.

Consumer proposal in Canada: In a consumer proposal will I hand over my home and my auto?

KEEP IN MIND: If you were to surrender your secured properties after declaring your Proposal, you will not be relieved from any type of financial debt shortfall since it happened after the declaring of your consumer proposal.

Make certain that if you are offering up secured assets, wait until they have started their enforcement and are claiming any shortfall against you BEFORE you give your CP.

Normally lenders who register a mortgage or other security for a loan are outside the Plan process. It is the equity you have in your residence or car that must be considered when you and the LIT first sit down to work out a budget. This will affect the type of offer you are going to make.

If you have enough income to keep paying the mortgage against your home and/or your auto loan and you wish to keep the assets, you can do so. Again, your equity must be considered in the offer you make to your creditors. Your income and expenses must be reviewed to make sure you can afford all these expenses plus the monthly payment under your Proposal.

Consumer proposal in Canada: Will I need to surrender my charge cards?

Generally, you should be ready to offer every one of your charge cards to the LIT and you will not be able to ask for a brand-new charge card until after your Plan is finished. You nevertheless can make use of a guaranteed/secured credit card throughout this CP process.

Consumer proposal in Canada: If I miss out on repayment will I automatically become bankrupt?

We highly recommend you to make your repayments consistently and on time. If you drop 3 behind, your consumer proposal will certainly finish. If that were to happen, you will no longer have protection from your creditors and their collection efforts. However, you will not automatically become bankrupt if you default on your Proposal.

Consumer proposal in Canada: What should I do if I have excessive financial debt?

If you’re thinking about a debt settlement program or are looking for ways to end your financial debt call Ira Smith Trustee & Receiver Inc. We understand the stress and pain your financial problems are causing you. We feel your pain and we can end it for you.

Our strategy for every single person is to develop a result where Starting Over, Starting Now comes true, starting the minute you walk through our door. You’re just one call away from taking the necessary actions to get back on the road to leading a healthy and stress-free life.

 

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Brandon Blog Post

PERSONAL BANKRUPTCY CANADA FAQ: VIDEO – PERSONAL BANKRUPTCY FAQ CANADA

Personal bankruptcy Canada FAQpersonal bankruptcy canada faq: Introduction

Last week I provided you with my infographic, video and blog to give you information on the Canadian corporate bankruptcy Canada process. I focussed on how an incorporated business files for a voluntary bankruptcy in Canada. This week, I want to describe how an individual files for voluntary bankruptcy. I also want to answer what I have found to be the personal bankruptcy Canada faq. So look at the infographic and watch the video below. Feel free to read in more detail below the video.

Personal bankruptcy Canada faq: Personal bankruptcy process in Canada

One of the most asked questions is “What is the bankruptcy process in Canada?”. Last week our infographic and video described the corporate bankruptcy process in Canada. This week’s video describes the personal bankruptcy process in Canada.

VIDEO – Personal bankruptcy Canada faq

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Personal bankruptcy Canada faq # 1 – How do I recognize if I am in financial trouble?

If you are having difficulty paying your debts or have actually quit paying them altogether then you are in financial difficulty. Call an expert, a government qualified trustee to check your choices for reducing your debt and eliminating your stress and pain.

Personal bankruptcy Canada faq # 2 – Is bankruptcy my only alternative to get relief from debt?

The short answer is no; there are other options. You should always start first with a free consultation with a licensed insolvency trustee (LIT or Trustee). A LIT is a private party licensed by Industry Canada to carry out the restructuring and liquidation rules under the Canadian Bankruptcy and Insolvency Act (BIA). The LIT will discuss options with you to first avoid bankruptcy. These options include:

  1. credit counselling;
  2. debt settlement;
  3. restructuring; and as a last resort
  4. bankruptcy

Bankruptcy does not deal with debts such as home mortgages, vehicle loan, spousal support or child support. Debt settlement firms try to bargain with your lenders to lower the amount owing. They also prepare a payment plan for you to settle the debt; they do not “erase your debt”.

The Canadian government is in the process of implementing new rules to curb the activities of some debt settlement companies. Some of them charge you for reviews that a licensed insolvency trustee performs for free. They also sell you products you don’t need, under the guise of helping you improve your credit score.

Personal bankruptcy Canada faq # 3 – I have actually seen advertisements from Debt Settlement firms stating they could erase my debt without making use of a Trustee in bankruptcy. Just how does that work?

They don’t and their ads are misleading. If you first have a free consultation with a LIT, you will learn that a number of choices available to you that include yet are not restricted to debt reduction including a consumer proposal.

Understand that these debt settlement firms are not licensed trustees. Eventually, they stop charging you for things a LIT would do for free. Then they ultimately hand you over to a LIT for either a consumer proposal or bankruptcy. You could have just gone to see a professionally licensed Trustee to start with!

Personal bankruptcy Canada faq # 4 – Do I get approved for bankruptcy?

You qualify for individual bankruptcy in Canada if you are financially troubled, insolvent and owe greater than $1,000.

Personal bankruptcy Canada faq # 5 – Should I file bankruptcy?

Without the detailed information of your unique circumstance, that decision cannot be made. Get In touch With Ira Smith Trustee & Receiver Inc. for a complimentary no commitment session so you will understand your options for ending your debt pains, Starting Over, Starting Now.

Personal bankruptcy Canada faq # 6 – If I declare bankruptcy, will I lose my house and car?

There are certain claims that are not released by your discharge from bankruptcy. Examples are home mortgages and car loans, if you choose to keep them. It comes down to what is your equity in those assets. The answer to that question and your ability to cash-flow those debts will be the determining factor. There is a list of items that are exempt from seizure. Call Ira Smith Trustee & Receiver Inc. to find out more.

Personal bankruptcy Canada faq # 7 – Once I file bankruptcy, exactly what occurs to the money I owe?

Once you declare bankruptcy you will be required to surrender certain non-exempt assets to the Trustee. These assets will then be sold and the money earned from the sale of the assets distributed among your creditors.

Personal bankruptcy Canada faq # 8 – Even though I have not located work in my field, I still owe on my student loans. Will my bankruptcy get rid of that debt?

Is your date of bankruptcy within 7 years of when you discontinued to be a full or part-time student? If so, your student loan debt will not be released by your discharge from bankruptcy. In particular instances, you could be able to apply to the court for a discharge of your student debt obligations under the “hardship provision”.

Personal bankruptcy Canada faq # 9 – What takes place to my salary or wages throughout a bankruptcy?

Salaries and wages are not influenced by bankruptcy. However you will need to complete an Income and Expense Form noting your household earnings as well as costs. This becomes part of your budgeting procedure. If your earnings goes beyond specific requirements developed by the Office of the Superintendent of Bankruptcy (OSB) (“surplus income”), you will be required to pay part of the surplus income into the bankruptcy estate through the trustee.

Personal bankruptcy Canada faq # 10 – Canada Revenue Agency has actually frozen my bank accounts and has a garnishee with my employer on my earnings. Just how can I stop all that?

If you have filed personal bankruptcy, personal income tax debt is an unsecured debt. As soon as you’ve declared bankruptcy or made a consumer proposal, Canada Revenue Agency (CRA) cannot start or continue taking any kind of enforcement activity versus you, consisting of wage garnishment or freezing your assets. Your Trustee will alert CRA once you file. The LIT will also advise both CRA and your bank and employer that any enforcement activity against you for your debt cannot continue.

Personal bankruptcy Canada faq # 11 – Will I still owe loan after I state bankruptcy?

Maybe, due to the fact that bankruptcy does not cover secured lenders – home mortgages, auto loan, student loans (if it is less than 7 years given that you discontinued to be a full or part-time student). It also does not cover certain other debts:

  • penalties or fines enforced by the court;
  • spousal support;
  • child support; or
  • debts arising from fraud.

Personal bankruptcy Canada faq # 12 – How long will I be bankrupt?

The time you spend in bankruptcy will depend on whether this is a first or 2nd bankruptcy and if you have surplus income. Get In touch with Ira Smith Trustee & Receiver Inc. to find out more.

Personal bankruptcy Canada faq # 13 – Who will know that I have declared bankruptcy?

As soon as you declare bankruptcy your Trustee will tell your creditors, CRA, and the Superintendent of Bankruptcy. The two Canadian credit bureaus, Equifax and TransUnion, obtain filing records from the Superintendent of Bankruptcy, so it will be on your credit report.

Bankruptcy filings are a public document. On top of that particular personal bankruptcies, those with non-exempt assets estimated to realize more than $15,000, need an ad in the “legal” section of a local newspaper.

Personal bankruptcy Canada faq # 14 – How will bankruptcy influence my credit score ranking?

An individual that files bankruptcy gets the lowest credit score ranking. Details of your bankruptcy that influences your credit report is inevitably eliminated many years after your discharge from bankruptcy.

Personal bankruptcy Canada faq # 15 – What does a LIT/Trustee do?

A Trustee is an individual or company licensed by the OSB to carry out mandates under the BIA such as bankruptcy, proposal, consumer proposal, summary administration bankruptcy and business reorganizations. A LIT is an officer of the Court. The Trustee has a duty of care for the rights of both the debtor and the creditors.

The LIT also makes certain that the legal rights of the insolvent/bankrupt are not abused.

Here is a listing of standard steps taken by a Trustee:

  • Reviews and counsels debtors on available alternatives
  • Prepares official documentation that is both filed with the OSB and used to tell creditors
  • Ensures the validity of creditors’ claims
  • Ensures that debtors are provided with mandatory counselling and access to mediation services if there is a dispute about any income they are required to contribute
  • Sells the debtor’s assets, except those exempt from seizure by provincial and federal laws, and hold the proceeds in trust for distribution to creditors
  • Administers the bankrupt estate from beginning to end
  • Assesses the debtor’s conduct both before and during a bankruptcy, as well as the cause(s) of the bankruptcy; and
  • Arranges for (and if necessary reports all the above to the Court) for the bankrupt’s application for a discharge (in the case of personal debtors)

Personal bankruptcy Canada faq # 16 – How do I pick the ideal Trustee?

Make an appointment for your free consultation. Meet with the Trustee and ask any questions you might have about alternatives to bankruptcy, consumer proposal, debt settlement/restructuring, bankruptcy and/or the bankruptcy procedure. Get a feel for not only the answers you receive, but how interested does the Trustee seem in you as a person. Can you see yourself relating well to that person. Does the Trustee make you feel comfortable and the type of person you want to work with.

If not, consult with a different Trustee firm and repeat the procedure until you find a Trustee that you really feel comfy working with.

Personal bankruptcy Canada faq # 17 – Is my spouse/partner impacted by my bankruptcy?

Your partner/spouse will not be financially affected by your bankruptcy unless they have co-signed a debt or own assets jointly with you. A creditor could pursue your spouse/partner for any debt that they have co-signed for. This includes a mortgage on your jointly owned home.

Personal bankruptcy Canada faq # 18 – How will my bankruptcy impact my present divorce case?

In Canada, the bankruptcy process does not interfere with the majority of the divorce proceeding. The Trustee will stand in the shoes of the bankrupt spouse when it comes to the rights for either the equalization payment or the division of property. All issues about spouse and child support and child custody issues carry on as if there was no bankruptcy at all.

Personal bankruptcy Canada faq # 19 – What is Chapter 7?

Chapter 7 is not applicable in Canada. It is the liquidation section of the U.S. Bankruptcy Code, the federal law governing bankruptcy in America.

Personal bankruptcy Canada faq # 20 – What is Chapter 11?

Chapter 11 is not applicable in Canada. It is the corporate restructuring section of the U.S. Bankruptcy Code, the federal law governing bankruptcy protection in America.

Personal bankruptcy Canada faq – What Now?

I hope that you have found this information helpful. Bankruptcy is the last thing we try to do for a person in financial difficulty. If caught early enough, we can get involved in a debt settlement restructuring program for you.

The Ira Smith Team knows that you are worried because you are facing significant financial challenges. The stress placed upon you is enormous. We understand your pain points.

Contact the Ira Smith Team today. We know how to solve your financial challenges, remove your pain and put things back on a healthy path. Contact us today for your free consultation so that we can save your life, Starting Over Starting Now.

personal bankruptcy canada faq
personal bankruptcy canada faq
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Brandon Blog Post

CANADA BANKRUPTCIES: GRAPHIC & VID – CANADIAN BANKRUPTCY AND INSOLVENCY LAW

Canada bankruptcies: Introduction

The purpose of this infographic, video and blog is to give you Canada bankruptcies information. I want to explain how Canadian bankruptcy and insolvency law works for companies and what the major steps corporate bankruptcy laws in Canada are. So watch the video below and feel free to read in more detail right below the video.

Canada bankruptcies: Video

 

Canada bankruptcies: The 10 standard steps in a voluntary corporate bankruptcy

The actions of a Licensed Insolvency Trustee (Trustee) takes with respect to the assets and the claims of creditors in a corporate bankruptcy may differ from case to case. However, there are 10 standard steps the Trustee takes in each corporate bankruptcy file. These steps are to understand and deal with the nature of the assets and the creditor claims.

Here are the 10 steps I take as a standard process with each corporate bankruptcy.

Step 1 – Initial meeting with Trustee

I meet with the Directors of the company by providing a free consultation. In this meeting, I learn the causes of the company’s insolvency and the nature and extent of the assets and the claims of various creditors. This includes potential trust claimants and secured creditors.

After obtaining the information I need to provide advice specific to that company’s situation, I decide if the company is a candidate for a restructuring, either informally or in a bankruptcy protection mode. If possible, this is preferable, as it will save jobs and allow the company to continue in business. If not, I advise about corporate bankruptcy and what is involved.

Step 2 – Directors meeting

If bankruptcy is the answer, the Directors formally meet and pass a resolution stating that the company is insolvent and must file an assignment in bankruptcy. The resolution also indicates which Director is authorized to sign all documents and be the Designated Officer in the bankruptcy proceedings. The Designated Officer is the person that will attend the First Meeting of Creditors and answer questions about the causes of the company’s insolvency and bankruptcy and how the company conducted business.

Step 3 – Signing all documents

With the signed Directors’ resolution in hand, I prepare all necessary bankruptcy documents. I then meet with the Designated Officer to explain the documents and have them all signed by him or her.

Step 4 – Filing with Official Receiver

The Official Receiver is the local representative and part of the Federal Office of the Superintendent of Bankruptcy. I electronically file the required documents and wait for the Official Receiver to issue the bankruptcy certificate. The company is not officially bankrupt until the day and time that the Official Receiver issues the bankruptcy certificate. Normally it gets issued on the same day or the next day. So, if the timing of the start of the bankruptcy is important, I need to take a time lag into consideration.

Step 5 – Bankruptcy certificate

The company is not officially bankrupt until the day and time that the Official Receiver issues the bankruptcy certificate. Normally the issuance is on the same day or the next day. So, if the timing of the start of the bankruptcy is important, I need to take a time lag into consideration.

Once the certificate is issued, my firm Ira Smith Trustee & Receiver Inc., is named as the Trustee. This appointment is valid until the First Meeting of Creditors. At the meeting, one of the things the creditors must vote on, is affirming the Trustee’s appointment.

Step 6 – Trustee takes possession

Now that I am the Trustee, I have a duty to take possession of the company’s books and records and the known assets. Taking possession of the assets is subject to the rights and wishes of any trust claimants or secured creditors.

Step 7 – Trustee notifies known creditors

Within 5 days of the date of bankruptcy, I must familiarize myself with the books and records as ot the names and addresses of the creditors. I must also in those same 5 days, set the time and place for the First Meeting of Creditors and mail out the notice to the creditors advising of the bankruptcy, the creditors meeting details and providing a proof of claim form. I must also arrange for a notice of the bankruptcy be placed in a local newspaper so that any unknown creditors are officially on notice.

Step 8 – Trustee safeguards assets

Again subject to the rights of any trust claimants or secured creditors, I must safeguard, insure and store the assets. I can begin formulating a plan for selling the assets if there is equity for the bankruptcy estate. However, I cannot sell any assets before the First Meeting of Creditors without a Court Order. At the creditors meeting is where I seek the approval of the creditors for the plan I have prepared to sell the assets. After obtaining that approval, sales can be completed by the Trustee.

Step 9 – Trustee prepares the report

I prepare my Trustee’s Report To The Creditors On Preliminary Administration. The report is handed out to the creditors present at the First Meeting of Creditors. It is also a public document, so any creditor who could not attend the meeting can receive a copy.

The report covers the following areas:

  • Background information
  • Causes of financial difficulty
  • Description and estimated value of the company’s assets
  • Any trust, secured or property claims against the assets
  • What conservatory and protective measures to safeguard the assets the Trustee has taken to date
  • Books and records of the company
  • What the Trustee’s review to date of the books and records has determined, if anything
  • Did the Trustee retain legal counsel yet and if so, for what reason? If there is a trust, secured or property claims that the Trustee knows about, it would be normal for the Trustee to get a legal opinion on the validity and extent of such claims prior to the creditors meeting. The Trustee would advise the creditors of what the legal opinion says and how it will affect the sale of assets, or if there is even anything for the Trustee to sell.
  • The claims of the creditors identified to date.
  • What the anticipated realization and distribution to the unsecured creditors may be
  • The Trustee’s fee
  • Any other matters

Step 10 – The First Meeting of Creditors

Within 21 days of the date of bankruptcy, I hold the creditors meeting. My report described above is distributed. The Trustee, the Designated Officer and possibly the lawyer hired by the Trustee, attend the creditors meeting. Also attending are any creditors who wish to take part.

The creditors meeting is the place where the creditors can ask questions and find out information about the causes of bankruptcy and the Trustee’s estimate of what the unsecured creditors may receive by way of a distribution.

As mentioned above, the creditors also must approve the actions and activities of the Trustee to date, and approve any steps the Trustee wishes to take in realizing upon assets and dealing with creditors’ claims. The creditors also appoint up to 5 Inspectors. The Inspectors are representatives of the creditors who supervise and assist the Trustee and ultimately must approve the Trustee’s actions.

canada bankruptcies
canada bankruptcies

 

These are the 10 standard steps I take in every voluntary corporate bankruptcy. The exact things I must do to realize upon the assets and deal with the claims of creditors will depend on the assets and claims themselves. When the bankruptcy administration is complete, including any distributions made, the Trustee then obtains a discharge.

Is your company experiencing financial difficulty?

I hope that you have found this information helpful. Bankruptcy is the last thing we try to do for a company in financial difficulty. If caught early enough, we can get involved in a turnaround situation for your company to keep jobs and value.

The Ira Smith Team knows that you are worried because your company is facing significant financial challenges. Your business provides income not only for your family. Many other families rely on you and your company for their well-being. The stress placed upon you due to your company’s financial challenges is enormous. We understand your pain points.

Contact the Ira Smith Team today. We know how to solve your company’s financial challenges, remove your pain and put things back on a healthy path. Contact us today for your free consultation so that we can save your company, Starting Over Starting Now.

canada bankruptcies
canada bankruptcies

 

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ONLINE BANKRUPTCY SEARCH: THIS CANADIAN INSOLVENCY RECORDS SEARCH RENEWAL (IRS) WON’T CHASE YOU FOR MONEY!

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Online bankruptcy search: Introduction

This blog is about the Canadian government’s plan to update its online bankruptcy search function. It is an update to our November 15, 2017 Brandon’s Blog titled: “BANKRUPTCY FILINGS FREE PUBLIC RECORDS: WILL FREE SEARCHES TURN YOU INTO A PERSONAL BANKRUPTCY RECORDS SLEUTH FOR THE TRUTH”.

As you can imagine, I have a schedule for creating Brandon’s Blog. I created the above-mentioned blog and related video on the Office of the Superintendent of Bankruptcy (OSB) insolvency records search renewal (IRS) program and posted it for publishing on November 15. After doing so, the OSB published an update on its IRS program. The purpose of this blog is to give you the updated information.

The OSB November 2017 update offers more information about the IRS post it published in August 2017.

Online bankruptcy search: Updating the technology

The OSB has stated that its updated IRS system will consist of modern-day safeguards. The new IRS will secure the private information of people or companies who have either filed or become bankrupt or who have filed a consumer proposal or Division I proposal.

Online bankruptcy search: The legislative need

Under the Bankruptcy and Insolvency Act (BIA), the Superintendent of Bankruptcy is required to keep and make available a public document of all personal and corporate bankruptcies and proposals. The public document, includes the names of the insolvent debtors given statutory stay of proceedings from the commitment to pay their financial debts.

This record consists of vital information needed to administer the bankruptcy system. It is also important for the running of an efficient and well-functioning Canadian marketplace.

Online bankruptcy search: The purpose of the current system

The current Bankruptcy and Insolvency Records Search data source offers Canadians with access to search the public database for specific people or companies that have submitted a (consumer) proposal or bankruptcy, as the case may be. It is also for creditors to see if any party applying for credit are in an insolvency proceeding.

Online bankruptcy search: Uses of the current system

The OSB’s database allows for searches for:

  • creditors to take necessary activity with respect to specific insolvency filings;
  • insolvent debtors, either an individual or Directors of a company, to acquire information about their bankruptcy or proposal;
  • Licensed Insolvency Trustees (LIT) to properly administer insolvency estates;
  • people and companies making informed credit choices on people or organizations applying for loans or trade credit.

Online bankruptcy search: How many times a year is the current system searched?

Each year the current database, (which has a cost of $8 each search for public users), is searched about 800,000 times by individual Canadians, including LITs (for whom there is no charge). Any member of the public who pays the charge could browse the government insolvency records. The present system does not limit access in any other way.

Online bankruptcy search: The proposed new IRS

The OSB will be changing the current system. It is outdated by today’s privacy standards. The OSB will create a new IRS. While still attending to the legislative needs to give access to a public document of bankruptcies, it will substantially make individual information of debtors more secure.

As compared to the old system, the IRS will consist of many steps developed to particularly restrict the disclosure and use of the individual’s details of the debtors who file for an insolvency proceeding.

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online bankruptcy search

Online bankruptcy search: New IRS protections

Examples of the brand-new protections which are not available in the current system, to shield disclosure of individual information, are:

  • Individual information entered will just be confirmed, not offered in a search result.
  • Searchers will need to recognize the first, last name, as well as date of birth of a debtor. This is required to get verification of an individual in bankruptcy or who has filed a (consumer) proposal.
  • The new system will no longer supply access to bankrupts’ documents that do not match the search requirements. The new IRS will be search specific, and not providing a complete list of names matching search criteria.
  • For every right search, a decreased measure of individual information will certainly be returned in the public search results page. Home addresses and complete postal codes will no longer be included in search results.
  • The public document search retention will be lower. The duration for the storage of details will be 10 years post-discharge.
  • The new system will consist of innovations designed to decrease the possibility for unexpected uses of the information. For example, machine-based searches.

Online bankruptcy search: Meeting the needs of LITs

The OSB has talked to the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) as part of developing the IRS. The OSB has dealt with comments received thus far. The IRS layout will certainly make best use of technology to protect personal information. The new system will fulfill the specific needs of LITs, in meeting their insolvency estate management and legal requirements.

It must be kept in mind that the OSB has no plan to remove the $8 charge from the current system before its being retired. The first introduction of the fee was designed exclusively to sustain the OSB’s operating expenses in developing and keeping the existing system.

The new IRS will consist of many measures to appropriately reduce disclosure and increase the defense of personal information of debtors. The OSB says that it has no proof that a service charge with the brand-new IRS would better safeguard debtor information against improper use.

Online bankruptcy search: This IRS won’t chase you for money!

As a result, the OSB says it will look at and suggest getting rid of the historic governing arrangement which permitted the charging of a cost to get access to the public record. The OSB states that this will align with Treasury Board Policy. That is why this IRS, is not planning to ever chase you for money!

Online bankruptcy search: What to do if you think you might need an insolvency process

Are you or your company insolvent and in need of restructuring? Are you scared to become another entry in an online bankruptcy search? If so, the worst thing you can do is procrastinate and not take positive steps to remedy your situation. Contact the Ira Smith Trustee & Receiver Team. If we meet with you early on, we can create a restructuring and turnaround strategy designed specifically for you.

online bankruptcy search 1
online bankruptcy search
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OUR 5 TOP TIPS IN CHOOSING A BANKRUPTCY TRUSTEE

bankruptcy trusteeA bankruptcy trustee is now called a licensed insolvency trustee

A bankruptcy trustee is now called a licensed insolvency trustee (LIT). Last week we discussed why you need a licensed insolvency trustee if you or your company has too much debt, even if you do not wish to file for bankruptcy. You should first see a LIT even if you would prefer one of the many alternatives to bankruptcy. This week we’re going to give you some pointers on how to choose a LIT.

Many people are under the mistaken impression that the LIT works only for you, but that’s not right. Although you can choose your LIT and you’ll be making payments to them, the LIT doesn’t technically work for you.

Who does the LIT act for?

The LIT is an independent third party officially appointed by the local Office of the Superintendent of Bankruptcy to manage the bankruptcy process. Their main job is to make sure that the bankruptcy administration to make sure that the assets are properly liquidated and that both you and your creditors follow all the bankruptcy rules.

How do I choose a LIT?

Here are 5 tips for choosing a LIT:

  1. If you have a friend, family member or colleague who has a bankruptcy trustee to recommend, that’s a great place to start.
  2. There’s a list of all licensed insolvency trustees and licensed insolvency trustee firms on the website of the Office of the Superintendent of Bankruptcy Canada. Always check this list to make sure that a trustee you’re interested in working with is on this list. There are unscrupulous, unlicensed debt settlement consultants and companies out there who make themselves appear as though they’re licensed trustees, but they’re not. They will either try to convince you that they can settle with your creditors on your behalf or act as a middleman (for a fee of course) and refer you to a licensed trustee.
  3. The Office of the Superintendent of Bankruptcy Canada publishes professional misconduct decisions on its website. Check to see that your trustee has a clean record.
  4. Set up a free, no-obligation consultation with a bankruptcy trustee. Ask questions and make sure that you’re comfortable with the trustee and satisfied with the answers to your questions. If not, you can move to another LIT. A consultation doesn’t obligate you to stay with the trustee unless you’ve signed the paperwork.
  5. Do research ahead of time so that you will know the right things to ask the LIT during your free consultation. A great place to start is by watching our video 12 THINGS A LICENSED INSOLVENCY TRUSTEE MAY NOT TELL YOU.

What should you do if you have too much debt?

Ira Smith Trustee & Receiver Inc. has a great reputation and a cumulative 50+ years of experience dealing with diverse issues and complex files. We deliver the highest quality of professional service. Give us a call today and Starting Over, Starting Now you will be well on your way to solving your debt problems.

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CANADIAN BANKRUPTCY EXPERT: GO TO A LICENSED INSOLVENCY TRUSTEE

canadian bankruptcy expertCanadian bankruptcy expert introduction

There are several misconceptions when it comes to the Canadian bankruptcy expert known as a licensed insolvency trustee and that the role of the trustee is only for the bankruptcy process. It is true that a licensed insolvency trustee is the Canadian bankruptcy expert, but it is not the case that a licensed insolvency trustee only can administer Canadian bankruptcies.

  1. Misconception # 1 is that trustees only deal with bankruptcy. Although you may know that a trustee is a Canadian bankruptcy expert, they’re also highly trained and educated debt consultants who, depending upon your particular circumstances, can offer you several alternatives which include credit counselling, debt consolidation and consumer proposals.
  2. Misconception # 2 is that because it is a legal process, you need a lawyer. Although you may have heard many radio commercials telling you that you need a lawyer if you’re going to declare bankruptcy, and if you are dealing with income tax debt to keep using a certain lawyer and not a licensed insolvency trustee, this is simply not the case. Even though it is is a legal process, to file bankruptcy in Canada you need the services of a licensed insolvency trustee. In fact, bankruptcies and consumer proposals can only be administered in Canada through a licensed insolvency trustee.

What is the role of a trustee?

The Office of the Superintendent of Bankruptcy (OSB) licenses trustees to administer bankruptcy proceedings. When you file for bankruptcy, the trustee becomes the administrator of your property and assets.

Why use a trustee instead of a debt settlement company?

Debt settlement companies can’t administer a bankruptcy or a consumer proposal – ONLY a licensed insolvency trustee can. In addition a trustee:

  • is federally regulated
  • has undergone a background check by the RCMP before being granted a licence
  • is subject to a stringent code of ethics
  • maintains his/her competency by completing ongoing mandatory professional development each year
  • The Federal Government and the Court regulate trustees’ fees and for consumer matters, they are usually less than the fees of the debt settlement companies who make unsubstantiated claims

What should you do if you or your company have too much debt?

If you’re dealing with serious financial issues, contact a trustee, who is the Canadian bankruptcy expert. For the reasons already given, you should do this whether or not you’re contemplating filing. The reason is very simple: the licensed insolvency trustee will assess your situation, offer you all of your available options and will do this for you for free! You can’t find a better deal anywhere.

We’re experts in dealing with debt. Contact Ira Smith Trustee & Receiver Inc. today for a free consultation and you will be well on your way to regaining your former quality of life Starting Over, Starting Now. Read our blog next week when we’ll be discussing how to choose a licensed insolvency trustee.

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# VIDEO: THE HISTORY OF CONSUMER PROPOSAL DEFINITION #

consumer proposal definition, starting over starting now, trustee, BIA, Bankruptcy and Insolvency Act, debt, bankruptcy, trustee in bankruptcy, consumer proposal, debts, Office of the Superintendent of BankruptcyConsumer Proposal definition

It is important to know what the consumer proposal definition is. A consumer proposal is a relatively new addition to the Bankruptcy and Insolvency Act (BIA), even though it has been around for 23 years. Although the origins of the current BIA can be traced back to the original 1869 An Act respecting Insolvency, the consumer proposal section was enacted with the 1992 amendments to the BIA.

According to the Office of the Superintendent of Bankruptcy, the consumer proposal definition is:

“A consumer proposal is a formal, legally binding process that is administered by a bankruptcy trustee. In this process, the trustee will work with you to develop a “proposal”—an offer to pay creditors a percentage of what is owed to them, or extend the time you have to pay off the debts, or both. The term of a consumer proposal cannot exceed five years.

Payments are made through the trustee, and the trustee uses that money to pay each of your creditors.”

My consumer proposal definition

My consumer proposal definition is THE GREAT alternative to bankruptcy. It’s available only to people, whose total debts do not exceed $250,000, not including debts secured by their principal residence. Working with a trustee in bankruptcy you make a consumer proposal to:

  • Pay your creditors a percentage of what you owe them over a specific time
  • Extend the time you have to pay off the debt
  • Or a combination of both

Watch this short video

I hope that you enjoy the video. Most people facing financial challenges, or insurmountable debt that they can never repay, cannot focus on the consumer proposal definition. We understand that what you need is an experienced trustee to recommend you solutions tailored specifically to your situation. Contact Ira Smith Trustee & Receiver Inc. for sound, professional advice and a solid financial plan for Starting Over, Starting Now.

 

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WHAT CAN I DEDUCT FOR SURPLUS INCOME IN BANKRUPTCY?

what can I deduct for surplus income in bankruptcy, surplus income in bankruptcy, surplus income, bankruptcy, Bankruptcy & Insolvency Act, Office of the Superintendent of Bankruptcy, trustee, starting over starting now“What can I deduct for surplus income in bankruptcy?” is one of the questions about bankruptcy that we are very frequently asked. The concept of surplus income in bankruptcy doesn’t really seem to make much sense. After all, if you are bankrupt, how can you have surplus income? So let’s start at the beginning and clear up all the confusion in order to answer the question “what can I deduct for surplus income in bankruptcy”.

What is surplus income in bankruptcy? If you have filed an assignment in bankruptcy, under the Bankruptcy & Insolvency Act you are required to make a surplus income payment each month based on your income. The more you earn, the more you are required to contribute. The Office of the Superintendent of Bankruptcy sets limits for what a family is allowed to earn. The larger your family, the more you are allowed to keep. The thresholds are increased each year. The government has established a list of income levels for households of different sizes. If the household’s income exceeds the level set by the government then you have surplus income in bankruptcy and additional payments must be made to your trustee during your bankruptcy. The government’s instructions regarding surplus income can be found in Directive 11R2 from the Office of the Superintendent of Bankruptcy.

What can I deduct for surplus income in bankruptcy? There are some allowable deductions for surplus income in bankruptcy:

  1. child support payments
  2. spousal support payments
  3. child care expenses
  4. expenses associated with a medical condition
  5. Court-imposed fines or penalties that are in the process of being paid
  6. expenses permitted by the Income Tax Act (or similar provincial legislation) that are a condition of employment
  7. any other debt where a stay of proceedings has been lifted by the Court, and a recourse authorized
  8. interest paid on debts that are not dischargeable in bankruptcy under paragraph 178(1)(g) of the Act

As a result of these deductions in the calculation, that is why everyone wants to know what can I deduct for surplus income in bankruptcy.

If you’re considering an assignment in bankruptcy you will require the services of a licensed bankruptcy trustee. Contact Ira Smith Trustee & Receiver Inc.We provide the depth of expertise found in a large company, delivered in a boutique setting that ensures high quality and cost effective service. With a cumulative 50+ years of experience dealing with diverse issues and complex files, the Ira Smith team delivers the highest quality of professional service. Take the first step to Starting Over, Starting Now.

Call a Trustee Now!