Tag: personal bankruptcy

BANKRUPTCY ACT CANADA: ARE YOU REALLY PREPARED FOR IT?

Post author By Brandon Smith
Post date July 10, 2019

Introduction

No person wishes to go make a filing under the Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) (Bankruptcy Act Canada), however occasionally it is inevitable. You might think that people who file are just those that are careless with their finances. However, with most of the people I see, it is usually an event outside of their control that pushes them over the edge.

In personal bankruptcy, things such as illness, divorce, job loss, unanticipated catastrophes, identity theft and fraud are many times the causes of insolvency. Of course, lack of proper budgeting, overspending and inappropriate uses of credit are also involved. In corporate insolvency, the #1 cause always seems to track back to management.

Insolvency filings happen every year. In 2018, a total amount of 128,846 insolvency filings were made with the Office of the Superintendent of Bankruptcy (OSB). This is 2.4% more from 2017. Consumer insolvency filings increased 2.5% (125,266 filings), while company filings dropped 0.8% to 3,580.

At the very same time, people choosing to avoid bankruptcy by filing a proposal continued increasing in 2018, bringing this number to a brand-new level. Proposals represented 52.6% of consumer filings in 2017. In 2018, they expanded by 6.6% to 56% of all personal filings.

Are you considering a Bankruptcy Act Canada filing, or at least speaking to a Licensed Insolvency Trustee (formerly called a trustee in bankruptcy) (Trustee)? In order to help you start your fact-finding, I want to tell you what will happen to your bank accounts, retirement accounts and your other important financial funds. Understanding what to anticipate can assist you to stay clear of some pricey blunders.

Bankruptcy or (consumer) proposal

Being insolvent is that you are not able to settle your financial debts. People with severe financial problems can make Bankruptcy Act Canada filing by filing either for bankruptcy, a consumer proposal or Division I proposal.

Proposals are official methods controlled by the Bankruptcy Act Canada for personal filings. Dealing with a Trustee you make a proposal to:

Pay your creditors a portion of what you owe them over a particular time period not going beyond 60 months
Extend the time you need to settle the debt
Or a mix of both

The Proposal is made via the Trustee, who uses the money in your proposal fund to pay the cost of administration and distribution to each of your creditors their pro-rata share. A consumer proposal needs to be finished within 5 years from the day of filing.

Proposal

People with severe financial problems can apply for bankruptcy. They can also try to avoid bankruptcy by using the Proposal provisions of the Bankruptcy Act Canada.

There are numerous advantages to avoiding bankruptcy. The main differences between proposals and bankruptcy are:

Unlike informal debt settlement, a Proposal produces a binding discussion forum where each of your unsecured creditors has to participate in for your debt restructuring.
You can keep your property, including your home, if you can afford to in your budget.
Lawsuits against you and enforcement proceedings, such as wage garnishments, cannot begin or continue.
In a successfully completed Proposal, you do not need to file for bankruptcy.

Keep in mind that financial institutions have “set-off” legal rights, implying that if you declare bankruptcy or file for bankruptcy when you’re behind in payments to them, they will take the funds in your accounts to try to cover all or some of what you owe them. This is notwithstanding that there is a stay of proceedings once a Bankruptcy Act Canada filing takes place and such an offset really should not take place.

So if you are thinking of filing either for bankruptcy or a proposal, I want you to be prepared for what might happen to your financial assets.

Your bank account

In a bankruptcy, the cash in your bank account is a property which must be paid over to the Trustee. Upon your filing, the Trustee will put all your banks on notice to provide the funds in any accounts maintained with them to the Trustee. As noted above, the bank may very well offset cash in your savings or chequing account against the money you may owe them, including credit card debt.

In a Proposal, you do not lose control of the money in your bank accounts. Rather, they are considered by the Trustee in formulating the type of Proposal you should offer your creditors. Remember, your Proposal must offer your creditors a better alternative than your bankruptcy would. However, even though there is a stay of proceedings invoked once you file your Proposal, it is not uncommon for a bank where you maintain an account and to whom you owe money, to take the money in your account and offset it against what you owe them.

So the moral of this story is that you are best to have bank accounts at financial institutions to whom you do not owe any money.

In a bankruptcy, your RRSP, RRIF or DPSP are excluded from seizure. However, the Trustee is entitled under the Bankruptcy Act Canada to receive the equivalent to any amounts contributed to these accounts in the 12 months preceding your filing date. In a Proposal, this 12-month amount must be included by the Trustee in the calculation of what amount your Proposal should offer your creditors.

Canada Pension Plan (CPP) and Old Age Security income (OAS)

Canada Revenue Agency (CRA) is the only one permitted to garnish your CPP earnings if you have an unpaid personal income tax. By filing either for bankruptcy or a Proposal, the stay of proceedings will be invoked and CRA will have to stop the garnishment of your CPP and you will get the CPP payments you are qualified for.

However, the earnings obtained from CPP and OAS will certainly be taken into account by the Trustee in determining if you have any surplus income payment obligation in bankruptcy. In a Proposal, that amount also has to be considered in developing your Proposal.

Tax-Free Savings Account (TFSA), Registered Education Savings Plan (RESP) and other non-registered account investments

In a bankruptcy, just like any other non-exempt property, the amount held in your TFSA and any other non-registered investment account must be paid to the Trustee. In a Proposal, these amounts need to be taken into account in determining what type of Proposal to make. It may very well be that these accounts are collapsed in order to help fund a Proposal.

Similarly, RESPs are not excluded in personal bankruptcy. In a Proposal, the amount must be considered as an asset in calculating how much must be offered in your Proposal to stand a chance for success.

The reason that an RESP is not excluded from seizure in bankruptcy is relatively straightforward. Your child does not acquire ownership or other entitlement to the RESP funds as parents can take possession of the funds prior to the child becoming a post-secondary school student. For that reason, it is the parents who have ownership of the funds.

Consequently, the Trustee of an insolvent mother or father that has an RESP can collapse it. If the parent in bankruptcy wants the RESP to not collapse, adequate arrangements need to be made with the Trustee for the equal amount of funds in the RESP at the filing date be paid to the Trustee for the bankruptcy estate and the bankrupt’s creditors.

Annuity revenue in bankruptcy

Annuities are agreements where you pay a company (normally an insurance company) a specific amount, in order to get regular monthly payments for a specific period of time or for the remainder of your life.

If an annuity contract is properly set up with an insurance company, it will be exempt from seizure in bankruptcy. However, the income stream it produces will be considered by the Trustee in determining whether the bankrupt person has a surplus income obligation.

Your RRIF can also be considered as an annuity as it provides a legislated stream of payments. The RRIF is exempt from seizure in a bankruptcy, other than for any contributions in the 12 months immediately prior to filing. Like an annuity, the entitlement to payments will be considered by the Trustee in doing the surplus income calculation.

In a Proposal, you don’t give up ownership of an annuity contract or RRIF, but the income must be considered in preparing a suitable Proposal.

Bankruptcy Act Canada summary

Do you have financial problems? Do you not have enough money to pay your bills in full when due?

As a Trustee, we are the only professionals licensed, authorized and supervised by the federal government to offer insolvency advice and to implement solutions under the Bankruptcy Act Canada. A consumer proposal is a federal government licensed debt settlement plan to eliminate your debt. We will help you to select what is best for you to free you from your debt issues.

Call the Ira Smith Team today so we can eliminate the anxiousness, tension, discomfort and pain from your life that your cash problems have caused. With the unique roadmap, we develop just for you, we will promptly return you right into a healthy and balanced problem-free life.

Call the Ira Smith Team today. We have generations and decades of experience helping people and companies looking for debt restructuring and a debt settlement plan to AVOID bankruptcy.

You can have a no-cost consultation so we can work with you to fix your money troubles. Call the Ira Smith Team today. This will certainly allow you to go back to a new healthy and balanced life, Starting Over Starting Now.

Tags avoid bankruptcy, avoiding bankruptcy, Bankruptcy, bankruptcy act canada, Bankruptcy and Insolvency Act, Consumer Proposal, Debt, debt settlement, Division I Proposal, informal debt settlement, insolvent, Ira Smith Trustee, licensed insolvency trustee, personal bankruptcy, proposal, stay of proceedings, trustee in bankruptcy, wage garnishment

Brandon Blog Post

CONSUMER PROPOSAL STORY 4 – TRUE STORIES

Post author By Brandon Smith
Post date June 5, 2019

Introduction

This consumer proposal story 4 Brandon’s Blog is about how four of our clients were able to enter into a government approved debt settlement program, shed their debt and restart their lives.

As I have written in previous blogs, a consumer proposal is the only government approved debt settlement plan. It is designed for people who have $250,000 or less in total debt, other than for any debts secured against their home such as a mortgage or secured home equity line of credit.

If the consumer proposal receives the (deemed) acceptance by the required majority of creditors and it also receives (deemed) court approval, then the consumer proposal is approved. The insolvent person must now make the payments to the licensed insolvency trustee who is the consumer proposal administrator.

The following four real client consumer proposal story situations of mine I believe are representative of the kind of person we help end the pain and anxiety their debts are causing them. I have changed the names of the people for this Brandon’s Blog.

Buzz

This client is a 56-year-old married male. I will call him Buzz. He has annual income, net of income tax of $100,000. He has assets with a net realizable value of $1,000. His consumer debt totalled $71,000.

In reviewing his budget and affairs, we calculated that in personal bankruptcy, he would be required to contribute surplus income for 36 months as he was previously bankrupt. His surplus income obligation in bankruptcy was just over $34,000 in equal monthly instalments of $944.44.

We advised him that since his budget had room for him to make monthly payments, he should consider a consumer proposal. We drafted and filed his consumer proposal requiring him to pay $40,000 in total over 5 years. This resulted in equal monthly payments each of $667.

Buzz’s creditors accepted his consumer proposal and he is making the payments. This way he avoided bankruptcy and ended up with an approved debt settlement plan with monthly payments he can afford.

Woody

This client is a 65-year-old single male. I will call him Woody. He has annual income, net of income tax of $27,600. He has assets with a net realizable value of $500. His consumer debt totalled $108,000.

In reviewing his budget and affairs, we calculated that in personal bankruptcy, he would be required to contribute surplus income for 9 months as he was never previously bankrupt. His surplus income obligation in bankruptcy was just over $1,880 in equal monthly instalments of $208.89.

We advised him that since his budget had room for him to make monthly payments, he should consider a consumer proposal. We drafted and filed his consumer proposal requiring him to pay $24,000 in total over 5 years. This resulted in equal monthly payments each of $400.

Woody’s creditors accepted his consumer proposal and he is making his payments. This way he avoided bankruptcy and ended up with an approved debt settlement plan with monthly payments he can afford.

Mr. & Mrs. Potato Head

Our 3rd client is a 47-year-old married man and his 43-year-old wife. I will call them Mr. & Mrs. Potato Head. Their yearly income, net of tax obligations was $51,996. Their assets had a realizable value of $953. They are collectively responsible for the exact same consumer financial debts amounting to $31,820.

In assessing their budget, we computed that in a bankruptcy, they would need to pay surplus income for 9 months as neither were bankrupt before. Their surplus income responsibility in a joint bankruptcy was $5,271 in regular monthly instalments of $585.67.

We encouraged them that given their budget plan had room to make month-to-month payments, they must take into consideration the possibility of making a consumer proposal. We prepared and filed their consumer proposal needing them to pay $7,020 over 3 years. This led to regular monthly payments each of $195.

Mr. & Mrs. Potato Head’s creditors approved the consumer proposal and they are making their payments. In this manner, they will not go bankrupt and wound up with an accepted debt negotiation strategy with month-to-month payments they can manage.

Jessie

This client is a 67-year-old married female. I will call her Jessie. She has annual income, net of income tax of $58,416. She has assets with a net realizable value of $250. Her consumer debt totalled $67,000.

In examining her budget plan, we determined that in bankruptcy, she would be called for surplus income payments for 36 months as she was once a bankrupt. Her surplus income commitment in a bankruptcy would be $17,465 in regular monthly instalments of $485.13.

Considering that her spending plan had space to make month-to-month repayments, we encouraged her to seriously think about making a consumer proposal. We composed and submitted her consumer proposal needing her to pay $21,500 over a 40 month period. This would be regular monthly payments each of $537.50.

Jessie’s creditors approved her consumer proposal and she is making her repayments. By doing this she stayed clear of bankruptcy and wound up with an approved debt negotiation strategy with regular monthly repayments she can manage.

Consumer proposal story summary

I hope these real-life consumer proposal story 4 examples gives you a better idea of the kind of people this debt settlement program strategy is meant to help. It is a way for people to shed their debt and get back on a proper footing.

Are you in financial distress? Do you not have adequate funds to pay your financial obligations as they come due?

If so, call the Ira Smith Team today. We have decades and generations of experience assisting people looking for financial restructuring, a debt settlement plan and to AVOID bankruptcy.

As a licensed insolvency trustee (formerly called a bankruptcy trustee), we are the only professionals accredited, acknowledged and supervised by the federal government to provide insolvency advice and to implement approaches to help you remain out of personal bankruptcy while eliminating your debts. A consumer proposal is a government approved debt settlement plan to do that. We will help you decide on what is best for you between a consumer proposal vs bankruptcy.

Call the Ira Smith Team today so you can eliminate the stress, anxiety, and pain from your life that your financial problems have caused. With the one-of-a-kind roadmap, we develop just for you, we will immediately return you right into a healthy and balanced problem-free life.

You can have a no-cost analysis so we can help you fix your troubles. Call the Ira Smith Team today. This will allow you to go back to a new healthy and balanced life, Starting Over Starting Now.

Tags bankrupt, Bankruptcy, bankruptcy trustee, Consumer Proposal, consumer proposal administrator, consumer proposal stories, consumer proposal story, Ira Smith Trustee, licensed insolency trustee, personal bankruptcy, surplus income, surplus income calculation, surplus income payments

Brandon Blog Post

FINANCIAL SECURITY REPORT: HALF OF CANADIANS CAN’T MAKE ENDS MEET

Post author By Brandon Smith
Post date May 1, 2019

Financial security Introduction

Brand-New Ipsos study findings were released on April 22, 2019, simply 2 days prior to the next Bank of Canada interest rate announcement. This brand-new survey shows exactly how Canadians really feel about their financial security or its absence. Ipsos claims almost fifty percent of Canadians cannot make ends meet on a monthly basis.

Fifty percent of Canada is worried about the effect of increasing rates of interest on their financial resources. They feel even worse about their debt load from just a couple of months back.

Canadians maxed out on debt

Canadians are maxed out on debt with 48% of Canadians on the edge of bankruptcy. They claim that they go by the end of every month to within $200 or less far from financial insolvency.

In regards to Canadians and their beliefs, people are worried about their debt levels and financial security. Forty-eight percent of those questioned claim they cannot make ends meet. They understand that they are most likely to take on even more debt at the end of each month to pay all of their expenditures. So practically fifty percent of all Canadians need to handle even more debt to satisfy their current expenses, which in part includes existing debt repayments!

It’s no longer about purchases – that ship has already sailed!

It ends up from the survey that this isn’t about the fact that we’re in a low-interest-rate atmosphere any longer. It also isn’t about people making high-end or lifestyle new purchases that are considered unnecessary.

They have actually already done all that. Especially people in Toronto and Vancouver that have stretched to buy costly houses, home furnishings and appliances. They used the low-interest rate mortgages and home equity credit lines to do it.

New debt on top of old debt

So now they understand that they better not take on even more debt. However, guess what? It is currently far too late for almost half of Canada. People are claiming they currently just cannot make ends meet. Therefore, they have no choice but to take on even more debt.

Brand-new debt to make old debt repayments! Undoubtedly, these individuals stay in a hazardous downward spiral. People are questioning whether can continue in this way and are thinking about personal bankruptcy.

It is true that the survey has a small sample size. This Ipsos survey reveals growing tension and grief. Nevertheless, personal bankruptcies remain historically low in this nation. Undoubtedly, there are local distinctions. Albertans are experiencing far more personal insolvencies as a result of the slowness in the energy market.

I think there are 2 really basic reasons for almost half of Canadians dealing with financial insolvency yet personally bankruptcy levels are down. First, financially troubled Canadians are utilizing the consumer proposal arrangements section of the Bankruptcy and Insolvency Act (Canada) (BIA). This is a good thing because they are avoiding bankruptcy.

Second, people still have adequate equity in their houses. So, they are still able to borrow for brand-new debt to satisfy old debt payments other living costs. This is not a good thing. The thing Canadians do not seem to be doing yet is tightening their belts and lowering month-to-month expenses.

Bank of Canada

The Bank of Canada (BOC) increased its overnight interest rate 5 times since mid-2017. At the end of 2018, everyone, including the BOC assumed that fad was most likely to continue. Nevertheless, in its first 2019 interest rate announcement, the Bank altered its signals and currently appears completely satisfied to hold steady on the interest rate for what might be for the rest of 2019.

On April 24, 2019, the BOC announced that it was maintaining the overnight bank rate target at 1 ¾ percent. The BOC did so based on its observations of the Canadian and global economies.

Their statement included, that in Canada:

economic development throughout the very first half of 2019 is anticipated to be slower than was forecast for in January 2019.
The oil price decrease and recurring transport restrictions have actually suppressed financial investment and exports in the oil industry.
Financial investment and exports outside the oil market, at the same time, have been adversely impacted by unpredictability and the global downturn.
Beyond the oil and gas market, the financial investment will be sustained by high prices of other commodities and exports will broaden with reinforcing international need.

As far as the global market, the BOC stated:

The global economy reduced by greater than the Bank projected in its January Monetary Policy Report.
Continuous unpredictability connected to trade disputes has weakened business views.
Stagnation throughout many countries has resulted.
In reaction, several reserve banks have reported a slower speed of monetary plan normalization.

As a result, the BOC kept its target for the overnight rate at 1 3/4 percent.

Financial questions for Canadians

Virtually fifty percent of Canadians currently are sorry for the debt they have. I believe what this does is brings recognition for you to have a serious discussion in your home. The discussion requires to be about:

Exactly how near the margin are you living?
What household costs could you drop?
Could you survive if one of you were to lose your job?
If not, what can you do now to prepare for that if it were to one day happen?
Have you filed all your income tax returns and paid all your tax obligations?
Did you get a tax refund and what are you most likely to do with that cash to help with your situation?
Are your Christmas gifts expenses all paid or are you still rolling those costs on your credit card bill every month?

Despite that the job market has seen wage strength, the Canadian economic situation has not produced great financial signals. There are spots that seem to be a little murkier. Our rising cost of living is nearing 2% on an annualized basis and we’re paying much more for gas at the pump. We’re paying a lot more for produce. So there are things that are costing us even more simple to manage. So if income is increasing a bit, costs are climbing much more.

So Canadians are currently really feeling a little sweaty. They aren’t certain what is most likely to take place. Currently, there appears to be a little bit of a rest on the interest rates.

Canadians need to set up a proper household budget

I would certainly suggest that not everybody has taken a hard look at their financial situation. There’s plenty of presumptions that can take place due to the fact that you just do not understand your numbers. I see that occurring all the time.

So perhaps people really feel a little even worse off than they actually are due to the fact that they do not understand their numbers. They understand they stay in difficulty, however, do not have the capability to assemble a roadmap for saving themselves.

A truth check is needed instantly. Most likely fifty percent of those that claim they cannot make ends meet can save themselves without turning to an insolvency process. If they just recognized their realities about their very own money situation. The other half of the half, or 25% of Canadians, probably do meet the financial insolvency definition and need professional help.

The trick might just be that Canadians need to promptly get a good handle on what their month-to-month income and expenses truly are. Share that info with the entire household and make and follow a household budget that has everybody’s agreement. Your financial security in retirement may depend upon it.

Readers of my Brandon’s Blog will know that I always state the advantages of correct budgeting. To check out this budgeting topic you can look as far back as my collection of blogs that began late in 2014 with A BALANCED BUDGET IS TO FINANCIAL HEALTH WHAT A BALANCED DIET IS TO PHYSICAL HEALTH. You can additionally check my more recent 2019 blogs, USEFUL TIPS FOR SAVING MONEY CANADA: THIS PRO ATHLETE TEACHES US and also MY BILLS ARE HIGH: 6 THINGS TO IMMEDIATELY DO.

What about you or your company?

Do you have way too much debt? Are you having difficulty making your month-to-month expenses? Is your company having a hard time handling its economic difficulties that you cannot figure how to get out of?

If so, call the Ira Smith Team today. We have decades and generations of experience assisting people and companies looking for financial restructuring or a debt settlement plan. As a licensed insolvency trustee, we are the only experts recognized, accredited and supervised by the federal government to provide insolvency advice and carry out alternatives to aid you to stay clear of bankruptcy.

Call the Ira Smith Team today so you can end your tension, stress and anxiety that your financial problems have triggered. With the special roadmap, we develop unique for you, we will right away return you right into a healthy and well-balanced hassle-free life.

You can have a no-cost evaluation so we can help you repair your debt difficulties. Call the Ira Smith Team today. This will most certainly permit you to return to a brand new healthy life, Starting Over Starting Now. financial security

Tags bank of canada, Bankruptcy, Bankruptcy and Insolvency Act, BIA, budget, Consumer Proposal, cost of living, credit card, Debt, financial insolvency, financial security, household budget, household debt, Ipsos, Ira Smith Trustee, make ends meet, personal bankruptcy

Brandon Blog Post

BANKRUPTCY STATISTICS CANADA 2018: SCARED OF INSOLVENCIES IN CANADA OR DEBT?

Post author By Brandon Smith
Post date January 14, 2019

bankruptcy statistics

If you would rather listen to the Bankruptcy statistics Canada 2018 blog audio file, please scroll down to the end for the podcast.

Bankruptcy statistics: Introduction

On January 4, 2019, the Office of the Superintendent of Bankruptcy Canada issued its bankruptcy statistics report “Insolvency Statistics in Canada—November 2018”. Most of the headlines on this report quoted that Canadian insolvencies rose 5.2% in November 2018. While true, that headline alone could create the impression that we now have runaway bankruptcies in Canada. Nothing could be further from the truth. Let me explain.

Bankruptcy statistics: The latest numbers

Total insolvencies in November 2018 was 5.2% higher than total insolvencies in November 2017. That is what the press has quoted. However, that statistic by itself is meaningless. The complete number of insolvency filings (proposals and bankruptcies) in Canada lowered by 2.5% in November 2018 contrasted to the previous month.

For the 12-months ending November 30, 2018, total insolvencies boosted by 2.0% compared with the 12-month period ending November 30, 2017. This is a fairly modest total increase. Keep in mind that insolvencies in Canada have been at historically low levels for the last 9 years! A total annual increase of 2% from a historic low number is hardly an epidemic.

Consumer insolvencies for the 12-months ending November 30, 2018, increased by 2.0% compared to the 12-months ending November 30, 2017. Consumer personal bankruptcies were down by 5.0%, while consumer proposals were up by 8.4%. The percentage of proposals in consumer insolvencies increased to 55.7% during the 12-month period finishing November 30, 2018, up from 52.4% throughout the 12-months ending November 30, 2017. This means that over half of those Canadians who made an insolvency filing in this time period avoided bankruptcy. This is a good thing.

Business insolvencies for the 12-month period ending November 30, 2018, decreased by 0.6% compared to the 12-month period ending November 30, 2017. The industries with the largest decrease in insolvencies were mining and oil and gas. The industries with the largest increase in insolvencies were building and construction and retail.

Bankruptcy statistics: What is the real issue

The real issue is not these statistics. Rather, it is the historic high level of Canadian household debt amassed when interest rates were at near zero percent levels. Now that we are in a gradually increasing interest rate environment for the foreseeable future, not every person or company carrying high debt will be able to continue meeting their obligations and will have to resort to an insolvency proceeding.

I have written about the dangers of carrying too much debt for many years now. We are now entering the period where the rubber meets the road. Stephen Poloz, Governor of the Bank of Canada, feels the Canadian economy is doing sufficiently well to slowly boost rates of interest. Mr. Poloz believes to be tightening up that a bit. At the exact very same time, the latest insolvency statistics show that the marketplace now tells a story that there may be room for some actual pessimism about the Canadian economy.

Previous Bank of Canada Governor Mark Carney and the former Finance Minister, the late Jim Flaherty, warned the Canadian consumer to place the economy on their back and march it up a high hill. We did and it worked. This is now the outcome of it.

Bankruptcy statistics: Canadian household debt

There’s a good deal of conversation on what that suggests specifically for Canadians. It isn’t that the warnings have actually not been there for a while. The most recent statistics show that Canadian household debt is around 170 percent of disposable income. The regular Canadian owes $1.70 for every single buck of revenue made each year, after tax.

Twenty years ago, the proportion was 100%. So as you can see, there has been a stable climb in Canadians’ cravings for more financial debt. We have among the greatest financial obligation percentage of any of the Organisation for Economic Co-operation and Development participant nations. For those carrying high debt, it is now time to buckle your seat belts as interest rates will continue to rise.

There were indications that the Canadian consumer was thinking of their budgeting. Statistics Canada previously reported that retail sales were slowing down. Now in the latest insolvency statistics, we see that retail is one of the industry sectors that had an increase in corporate insolvency filings.

With rates of interest increasing, so does the cost of borrowing and the cost of maintaining variable rate loans. Fixed rate loans that mature will need to be refinanced at higher interest rates if the loan cannot be repaid in full.

Bankruptcy statistics: Debt in a rising interest rate environment

Do you have too much debt? Does your company have too much debt and is in danger of shutting down? Are you concerned that future interest rate hikes will make currently manageable debt totally unmanageable? Are the pain and stress now negatively affecting your health?

If so, contact the Ira Smith Team today. We have decades and generations of helping people and companies in need of financial restructuring and counselling. As a licensed insolvency trustee (formerly known as a bankruptcy trustee), we are the only professionals licensed and supervised by the Federal government to provide debt settlement and financial restructuring services.

We offer a free consultation to help you solve your problems. We understand your pain that debt causes. We can also end it right away from your life. This will allow you to begin a fresh start, Starting Over Starting Now. Call the Ira Smith Team today so that we can begin helping you and get you back into a healthy, stress-free life.

Tags bank of canada, bankruptcy statistics, bankruptcy trustee, Canada, Consumer Proposal, financial restructuring services, insolvencies, insolvency, Ira Smith Trustee, Jim Flaherty, licensed insolvency trustee, Mark Carney, Office of the Superintendent of Bankruptcy, personal bankruptcy, stephen poloz

Brandon Blog Post

FINANCIAL NEW YEAR’S RESOLUTIONS 2019: WILL YOU KEEP YOUR FINANCIAL NEW YEAR’S RESOLUTIONS 2019?

Post author By Brandon Smith
Post date January 7, 2019

If you would prefer to listen to the audio of this financial new year’s resolutions 2019 version of this Brandon’s Blog (with an introduction from a celebrity guest), please scroll to the bottom and click on the podcast.

Financial New Year’s resolutions 2019: Introduction

The New Year has arrived. I wish all of my readers a healthy, happy and prosperous New Year. By now, many people have made themselves promises on how they will improve in 2019. Many people make New Year’s resolutions, including financial new year’s resolutions 2019. In this Brandon’s Blog, I explore what are many of the common resolutions people make and what the chances are on people actually carrying them out.

Financial New Year’s resolutions 2019: The 8 most common resolutions

Other than the first one, in no particular order, the 8 most common New Year’s resolutions are:

Lose Weight. The Number 1 New Year’s Resolution is to drop weight. We’ve all seen it, or become aware of it. Many resolve to lose weight, but few truly complete it in the long-term. That is why January every year is when the weight loss programs, gyms and workout products advertise heavily.

Do Better Than Last Year. Often, life is simply hard. In between family members, good friends, your work, and all the various other stress and anxieties that life can toss at you, it simply appears sometimes that absolutely nothing can go right. And also some years are simply a plain draw. So, after a year of grinding via the days, weeks, and months, you’re prepared for a do-over. You’re prepared to do anything to make sure that the following year begins the very best way it can. So, this resolution is to merely attempt to have a better year than the last one.

Exercise. One of the most usual New Year’s resolutions has to do with ones very own health and wellness. Among the many health and wellness promises, is working out. When you consider it, it’s not just wishing to slim down (which is the number 1 resolution), it’s in fact about wishing to be more powerful, quicker and generally in better shape.

When your body is in peak condition, it does do far better. An in shape body functions far better, provides you with much more power, boosts your mind’s abilities and a lot more. DON’T try to push your body in the beginning to do more than it can handle. Any personal trainer will tell you to begin slowly and work yourself up from there. Set realistic goals for yourself.

Save More/Spend Less. Cash is what people need and the most common of all the financial New Year’s resolutions 2019 is to make sure that we have more of it in the New Year. This is especially true for most Canadians, who are living paycheque to paycheque.

The best way to start your financial plan for the New Year is to first look at what happened in the year that just ended. Reflect on your year. I’m certain you’ll realize some things about your immediate past financial behaviour. Some items that you wish you had not purchased or lost money on. Or, if you understood then what you currently know, you would certainly have done things in a different way and saved yourself a couple of bucks in the process.

In other words, look at your income and expenses carefully and budget properly for the New Year. Your proper budget must include saving a certain amount from each paycheque to put away in an emergency savings fund for when there is an unexpected, well, emergency. Your budget will also hopefully allow for other savings to be able to invest for the longer term.

Use the start of the brand-new year to begin preparing just how you could invest your new savings. In your personal financial plan or budget, concentrate on things you NEED versus the many things you WANT. By doing this one simple thing, you will find you will have more in your savings account. This is the best way to stay on track to meet your financial New Year’s resolutions 2019.

Get More Sleep. Depending upon the researcher you listen to, the body requires between 6-8 hours of rest. Our bodies can work on much less, yes, yet it’s not something that a lot of medical professionals advise. This is another one of the resolutions fitting into the health and wellness category.

Get A New Hobby/Skill. Whether we intend to confess or otherwise, most of us wish to be our best selves. We do not simply intend to be the individual that undergoes the movements, we intend to have something we can expect each week, and even take pride in.

So, with a brand-new year, comes a chance to learn new skills or do something different in our lives than just the “same old, same old”. For some, it, in fact, implies attempting to get new skills for getting a better paying job. For others, they see it as a possibility to handle a new pastime or discover something that they’ve always intended to do or learn.

Quit Smoking/Drinking. Humans are animals of routine, yet in some cases, those behaviours are actually, REALLY negative for you. Two of the ones that cover the “negative for you” checklist is alcohol consumption to such an excess that it is an addiction and smoking cigarettes. Like any addiction, this is very tough to do and many times requires the help of trained professionals.

Volunteer. While practically every one of these resolutions is created to aid oneself in one fashion or another, this one helps both the self and others. One of the best ways to help others is to volunteer your time. Volunteer to what? To help any place you can certainly. In some cases, it’s at a homeless shelter, or to assist a close friend in need. There are many opportunities to help the less fortunate. However the crucial point is that you place yourself 2nd, and the needs of others first. Spreading a little happiness can go a long way for a person. Therefore if you wish to assist others, do not hesitate to ask, “What do you need?”. You may be amazed by simply just how much you can help somebody.

Financial New Year’s resolutions 2019: Why do we do it?

We cannot forecast the future. In some cases, it’s tough to anticipate what will take place in the following couple of hours, not to mention the following 12 months. Why do we do it? Well, it’s mainly since we intend to think that we have some power over the future. If we can state to ourselves, “This year will certainly be different, this will certainly be the year I will make changes for me”, it’ll place us in the best attitude to get down to business and do things. The feeling that we have control over our lives is exceptional.

Financial New Year’s resolutions 2019: Will we keep our resolutions?

It begins straightforward. We look in the mirror, see what we don’t like and resolve to make the changes that probably should have been made a long time ago. We will establish worthy ventures to do simply that thing or things. However, most people will drop off the wagon within a short period of time. What? I’m not being mean, I’m being genuine. Making significant changes in your life is hard.

We are hyped for the New Year. We are. so tired of what occurred in the previous year that we are ready to make the changes we promised ourselves we would make. We may also have invested a lot of time informing other people what changes we will make in the New Year. But then life gets in the way and we fall short.

Financial New Year’s resolutions 2019: Falling short is OK

It does not matter that I fell short all my resolutions actually. I need to so that I can ensure that I can improve further! Of course, I should not try to fail them, but it is normal to fall short. No one is perfect. As long as you see that you have made improvements in the right direction, that is what really counts.

So, make sure that your goals are realistic. Even if you fall short, you have improved immensely and that will be your new starting point for the next New Year’s resolutions. I hope all of you improve your life in some area this year, and that will be your new starting point when 2019 comes to an end. This includes your financial New Year’s resolutions.

Do you need professional help to meet your financial goals?

As I stated above, sometimes professional help is required to meet a New Year’s resolution. We may not have all the skills required. Improving your financial situation may be one of those areas where professional help is required. Maybe you only need a coach to keep you focussed on performing your financial new year’s resolutions 2019. Perhaps on a personal level, you might require only some credit counselling or debt consolidation. On a more formal basis, you may need a debt restructuring plan in the form of a consumer proposal in order to eliminate your debts and get back on the right financial path. In some extreme cases, personal bankruptcy may be what is needed.

Perhaps your company is in need of financial restructuring. Perhaps your lender is threatening receivership or bankruptcy so you are in need of a financial advisor skilled in insolvency matters. A licensed insolvency trustee (formerly called a bankruptcy trustee) is the only professional licensed and supervised by the Canadian Federal government skilled in both personal and corporate insolvency matters If you or your company have too much debt, call the Ira Smith Team for your free consultation. We understand your pain, and we have the prescription to end your pain forever. Call the Ira Smith Team today, so that you can begin your improved life for this New Year 2019, Starting Over, Starting Now!

Tags 2019, Bankruptcy, bankruptcy trustee, brandon’s blog, Consumer Proposal, Debt, financial advisor, financial new year's resolution 2019, financial new year's resolutions 2019, Ira Smith Trustee, licensed insolvency trustee, New Year's Day, New Year's resolution, new year’s resolutions, personal bankruptcy, personal trainer, receivership, workout products

Brandon Blog Post

CONSUMER PROPOSAL CANADA PART OF BANKRUPTCIES LAWS IN ONTARIO?

Post author By Brandon Smith
Post date December 12, 2018

Introduction

I prepared this vlog to explain the differences between a consumer proposal (CP), one of the bankruptcies laws in Ontario and bankruptcy. This discussion is based on the inquiries that we are asked often. Hopefully, this information will help you understand better specifically what a CP debt settlement strategy is and how it will certainly assist you to remove all your financial obligations. All this while AVOIDING personal bankruptcy.

Main benefits of a CP

Take into consideration several of the benefits of the CP vs. bankruptcy:

- Unlike informal debt negotiation, the CP creates a forum where every one of your unsecured creditors must take part in for your debt restructuring.
- You keep your property.
- Legal actions against you on your property and debts, such as wage garnishments, cannot continue.
- You do not require to file an assignment in bankruptcy

CP vs. bankruptcy

How do I recognize if I have a financial problem?

If you are having difficulty satisfying your debts or have actually quit paying them, you are probably insolvent. Another sign of insolvency is that if your assets if liquidated, will not bring in enough money to pay off your debts. When you are all stressed out over the money you owe, for sure you will know that you have financial problems.

How do I know if I qualify for either a CP or bankruptcy?

Any person that is insolvent and owes greater than $1,000 is qualified to file either a CP or an assignment in bankruptcy in Canada.

Will I have to give up my assets?

As soon as you file for bankruptcy you will certainly have to give up your non-exempt property to the Trustee. These possessions will be marketed and sold. The cash from the sale of your property will be used to pay for the cost of the bankruptcy administration. The balance will be dispersed among your creditors.

In CP, you will not be giving up your assets. You are making an offer to your creditors less than the total amount you owe. According to the Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) (BIA), your CP has to be a better result for your unsecured creditors than they would receive in your bankruptcy.

What occurs to my wages or salary?

Nothing. You receive it as normal.

In a CP that has been (deemed) accepted by your creditors and approved by the Court, you begin to make your payments. There are no other requirements for your income in CP.

In bankruptcy, nothing happens to your income either. However, in a bankruptcy, unlike a CP, your Trustee at the outset has to decide if you are required to make voluntary contributions to your bankruptcy case based off of your income. If so, this is called a surplus income requirement. Also, you will have to file monthly statements of income and expense with the Trustee. Your surplus income requirement can change, depending on if your income goes up or down. There is no such requirement in CP.

Canada Revenue Agency (CRA) has frozen my bank account and has garnished my earnings. Exactly how can I deal with that?

As stated above, once you file a CP, there is a stay of proceedings. Upon receiving notice from the Trustee, CRA stops the garnishee process and lifts the freeze on your account(s). The same is true in bankruptcy.

Will I still owe money after I declare bankruptcy or file a CP?

Perhaps, because of neither a CP nor bankruptcy covers:

secured creditors – mortgages, car loans;
student loans (if it is less than seven years since you ceased to be a full or part-time student)
alimony and support payments you must make in your divorce proceedings; and
debts arising from fraud.fines or penalties imposed by the court;

How much time will I be under the insolvency proceeding?

The duration of time in bankruptcy will depend on whether this is an initial or 2nd (or more) bankruptcy, whether you have to pay surplus income and if your discharge is opposed or not. Depending on your circumstances, it can be anywhere from 9 months to many years.

In a CP, you can take up to 60 months to pay the total amount you promised to pay. Payments in a CP are required monthly.

Will anyone find out that I have filed either a CP or for bankruptcy?

As soon as you file for bankruptcy or a CP, your Trustee must file a notification with the Office of the Superintendent of Bankruptcy Canada (OSB) to start either process. The OSB does run a public database showing the status of all files.

In either a CP or bankruptcy, your Trustee must send a notice to all of your creditors. So they will know.

In a CP or a shortened summary administration bankruptcy, the Trustee does not place a legal notice in the local newspaper advertising that you filed. In an ordinary administration bankruptcy, the Trustee must publish a notice.

Generally, it is only the OSB, your Trustee and your creditors who are aware of your filing.

Is my partner or spouse impacted by my CP or bankruptcy?

Your partner/spouse will not be impacted by your CP or bankruptcy unless he/she co-signed as a borrower or has guaranteed payment for any of your debts. If they have guaranteed some or all of your debts, then those specific creditors can ask your spouse for payment in full.

NOTE: There is a body of case-law to suggest that if your CP is fully performed, then there is no debt left for your guarantor to make good on. That type of discussion is too technical for this general blog. If you are in this situation, your spouse should get legal advice before agreeing to pay anything. No such argument could even be considered in a bankruptcy situation.

Just how will my CP or bankruptcy impact my existing divorce case?

In Canada, CP and bankruptcy filings do not conflict with the majority of the divorce procedures. In a bankruptcy, the Trustee will stand in the shoes of the bankrupt spouse. Ontario is an equalization Province; not a division of assets Province. If the bankrupt spouse is entitled to an equalization payment, that will come to the Trustee.

In a CP, the Trustee does not get involved at all in any way. The BIA does not interfere at all with non-financial divorce issues such as custody. It also does not have any effect on support or alimony.

Consumer Proposal Canada or bankruptcy: Conclusion

I hope this consumer proposal discussion about the differences between a Consumer Proposal Canada and bankruptcy has been helpful to you.

Do you have severe debt and don’t know where to begin to fix it? Are your debt issues causing you to lose sleep? Is too much debt triggering stress and anxiety, discomfort and pain? We know that discomfort better than anyone and we can get it out of your life.

If so, call the Ira Smith Team today. We have years and generations of experience helping people and companies seeking financial restructuring or a debt settlement strategy. As a licensed insolvency trustee, we are the only specialists recognized, accredited and supervised by the Federal government to give insolvency advice and remedies to assist you and to prevent bankruptcy.

Call the Ira Smith Team today so you can end the stress and anxiety financial problems create. With the special roadmap, we will develop with and special to you, we will promptly return you right into a healthy, balanced hassle-free life.

You can have a no-cost appointment to assist you so we can fix your debt troubles. Call the Ira Smith Team today. This will certainly allow you to make a fresh start, Starting Over Starting Now.

consumer proposal bankruptcies laws in ontario

Tags assignment in bankruptcy, bankruptcies laws in ontario, Bankruptcy, Bankruptcy and Insolvency Act (BIA), Canada Revenue Agency, consumer bankruptcy in Canada, Consumer Proposal, consumer proposal canada, consumer proposal vs bankruptcy, difference between consumer proposal and bankruptcy, insolvency, Ira Smith Trustee, Office of the Superintendent of Bankruptcy, personal bankruptcy, Should I Use Bankruptcy or a Consumer Proposal, surplus income

Brandon Blog Post

WHAT IS THE DIFFERENCE BETWEEN BANKRUPTCY AND INSOLVENCY CANADA

Post author By Brandon Smith
Post date December 5, 2018

What is the difference between bankruptcy and insolvency Canada: Introduction

Encountering major money troubles is life-shattering, especially if you automatically think that bankruptcy is your only alternative. As a matter of fact, lots of people erroneously think that serious financial difficulties immediately suggest the only answer is bankruptcy. The most common question I am asked is, “what is the difference between bankruptcy and insolvency Canada”.

What is the difference between bankruptcy and insolvency Canada: Insolvency

If you are having problems meeting your financial obligations or have stopped meeting those financial obligations as they come due you are insolvent, not bankrupt. Insolvent is a cash flow problem; bankruptcy is a legal state. You can read a detailed discussion on the definition of being insolvent in my last week’s vlog INSOLVENT DEFINITION: A NEW FOCUS FOR TORONTO BANKRUPTCY TRUSTEE.

What is the difference between bankruptcy and insolvency Canada: Bankruptcy is a legal рrосеѕѕ

Bаnkruрtсу is a legal рrосеѕѕ under the Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) (BIA) that helps you to resolve уоur debts if they have become unmanageable. If you have relatively few assets and low іnсоmе and dесіdе to file for bаnkruрtсу, you will probably fіlе under the streamlined Summary Administration part of the BIA.

If you have realizable assets that will produce a value greater than $10,000, then your bankruptcy would be administered under the general administrative provisions. Don’t worry about these distinctions right now. For now, just know that the summary administration rules are shortened, and the cost of the bankruptcy administration is fixed by a tariff set by the Superintendent of Bankruptcy.

In either case, you will turn over to your Licensed Insolvency Trustee (“LIT”) (formerly known as a bankruptcy trustee) all уоur рrореrtу that is not exempt (protected) by law. The LIT will sell your property and the proceeds will be used to рау for the bankruptcy administration and then make a distribution to уоur сrеdіtоrѕ.

What is the difference between bankruptcy and insolvency Canada: Assets exempt in a bankruptcy in Ontario

In Ontario, where my practice is, the following assets are exempt from seizure in a personal bankruptcy:

Your necessary clothing without any dollar restriction.
Family furnishings and appliances up to a value of $13,150.
Your tools and other personal property used to earn income from your occupation up to a value of $11,300.
One vehicle with equity of no more than $6,600.
Registered Retirement Savings Plan and Registered Retirement Income Fund savings, other than payments made within the 12 months immediately before the bankruptcy filing.
The equity in your house if up to the amount of $10,000. Note that the current thinking is that if your equity is more than $10,000, then your exemption is zero.

If you have very little property, all of it may be рrоtесtеd so that you will not lose it.

What is the difference between bankruptcy and insolvency Canada: Surplus income

How much уоur сrеdіtоrѕ will get in this process dереndѕ on how much уоur unрrоtесtеd property can be ѕоld fоr and whether you will be required to pay “surplus income” to your LIT. For a detailed discussion on surplus income, read my May 28, 2013 blog CAN YOU REALLY HAVE SURPLUS INCOME IF YOU’RE BANKRUPT?

Among all the things that seem to perplex many people when it involves the bankruptcy procedure is surplus income. It’s tough to get your head around the concept of surplus income when you are heading towards bankruptcy. Can that really be true if you are insolvent?

What is the difference between bankruptcy and insolvency Canada: What is surplus income

Surplus income in a bankruptcy describes the amount the bankrupt must pay to the Trustee monthly. The Canadian bankruptcy system attempts to balance your right to end your debt and start over with the rights of creditors to be paid.

To permit Canadians to keep a sensible right to make a living throughout the bankruptcy administration, the federal government has established limits or standards on revenue a person can keep (after tax obligations and certain limited deductions) throughout their bankruptcy. The Office of the Superintendent of Bankruptcy establishes the limit restriction every year tied into the cost of living.

How do you figure surplus income?

The Federal Government establishes the formula used to calculate surplus income payments. The same formula is used for all of Canada.

The limits for surplus income are based off across the country “poverty line”. Surplus income has absolutely nothing to do with what you have left over monthly. It is a federal government formula that considers your revenue, specific non-discretionary costs as well as your household size.

The calculation is to find if you will need to contribute from your earnings monthly to your Trustee, for the benefit of your creditors.

Bankruptcy discharge

The final step of your bankruptcy process will be to get your discharge. Your discharge from bankruptcy acts as the trigger to discharge you from all of your debts. This means that you will not have to рау them (with possibly certain exceptions depending on your circumstances).

Whether you get an absolute discharge from your bankruptcy will depend essentially on your conduct. Before your bankruptcy, did you treat all your creditors the same? Does anyone feel aggrieved by your actions? That will decide if any of your creditors will oppose your discharge.

For an in-depth discussion of the personal bankruptcy discharge process, check out our vlog BANKRUPTCY DISCHARGE: THE TOP 8 THINGS THE BANKRUPTCY COURT WILL CONSIDER ON ANYONE’S BANKRUPTCY DISCHARGE APPLICATION.

Is your debt keeping you up at night?

Do you have extreme debt and have no concept of how to handle it? Are your debt woes keeping you up at night and causing you stress, pain and maybe even depression? We understand that pain and can cut it from your life.

Ira Smith Trustee & Receiver Inc. has helped many companies and people throughout the Greater Toronto Area (GTA) juggling too much debt in their lives that requires a blueprint for Starting Over, Starting Now. Do not delay. Help is 1 phone call away. You can fix your financial troubles while avoiding bankruptcy as long as you take swift action. Call the Ira Smith Team today for your free consultation.

Tags absolute discharge, Bankruptcy, Bankruptcy and Insolvency Act, bankruptcy discharge, bankruptcy trustee, BIA, Debt, insolvency, Ira Smith Trustee & Receiver Inc., personal bankruptcy, Registered Retirement Income Fund, registered retirement savings plan, RRIF, RRSP, Summary Administration, trustee, what is the difference between bankruptcy and insolvency canada

Brandon Blog Post

FORM 31 PROOF OF CLAIM: HOW TO PROPERLY COMPLETE THE PROOF OF CLAIM

Post author By Brandon Smith
Post date October 3, 2018

Form 31 proof of claim: Introduction

In last week’s vlog, I reviewed why it is important to complete a form 31 proof of claim truthfully, and the penalties for filing a false claim. For both personal and corporate insolvency files, creditors call asking how to complete the document. I discuss in this vlog why it needs to be completed properly. I also provide a link in this blog that you can click on to see how to properly complete the form step by step.

The reference to “form 31” is merely the number of the form given to the form 31 proof of claim form under the Canadian Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) (“BIA”).

What is the form 31 proof of claim form?

Completing and returning form 31 is the second phase in the bankruptcy process. They are included with the notice of bankruptcy documents mailed out by the licensed insolvency trustee (formerly known as a bankruptcy trustee) (the “Trustee”) to formally notify the creditors of the bankruptcy.

When properly completed and filed by each creditor, they are what a Trustee uses to compare the debt as listed on the debtor’s bankruptcy sworn Statement of Affairs. The amount claimed by a creditor is normally different than the amount of the debt listed on the bankruptcy schedules. The reason for this is normally because the creditor’s records are accurate to the penny, while the bankrupt’s records are usually not up to date.

The process is the same whether you are filing a secured claim, an ordinary unsecured claim or a priority claim, which is also unsecured, under s.138 of the BIA. What is important is that you need to have a provable claim.

If the Trustee determines that you have either an unliquidated claim or a contingent claim, there will be additional steps you will need to take for the Trustee to be able to ascribe a value and for you to have a properly proved claim.

Form 31 proof of claim: Form 31

In every:

the Trustee will supply to all creditors form 31 document. If the debtor who intends to restructure first files a Notice of Intention To Make a Proposal, a claim form is not sent out at that stage. It will be sent with the actual restructuring proposal and other related documents.

The same document contains both where you can make your claim as well as complete the proxy form, if applicable. Creditors may experience difficulty completing the document. So, the Trustee provides instructions on how to complete the claim form and proxy. That is also why I have provided a step-by-step instruction sheet from the link below so you can follow exactly how to complete the form.

form 31 proof of claim

***Form 31 proof of claim*: Acceptability of proof of claim**

It is important to properly complete the document. It must be completed fully and properly. The claim must include all necessary details called for under the BIA. Below is a link to an example on how to properly complete the form 31 proof of claim. A Trustee is required to review all proofs of claim received.

The purpose of this is to know what claims are acceptable to be admitted for voting at the First Meeting of Creditors. Also, all proofs received either before or after the creditors’ meeting must also be reviewed carefully to make sure that they are acceptable if there is a dividend to be paid on the claims in the insolvency proceeding.

The Chair of the creditors meeting has the power to admit or disallow claims for the purpose of voting at the meeting. The Trustee has the same power for the proofs of claim for dividend purposes. Most times the Trustee will also be the Chair at the meeting of creditors.

It is incumbent on the Trustee to communicate with creditors whose claims the Trustee believes to be deficient. The purpose is to obtain additional information to make a final determination. The Trustee has to decide whether to admit or disallow a specific claim.

As you can see, completing the document properly is essential.

Does a creditor have to file a claim?

Nobody will force a creditor to file a claim in a bankruptcy estate. A creditor’s claim becomes valid when the creditor files it and the Trustee accepts it. . When a creditor files a claim against a bankruptcy estate, the creditor is making a claim that the Trustee should record and count their claim so that the creditor will be entitled to receive their pro-rata share of any dividend payments that may be made.

The Trustee will issue the maximum payment each creditor is entitled to when the bankruptcy estate is liquidated. When a creditor files a claim, the creditor also becomes an interested party in the bankruptcy case. An interested party is a person who has a vested interest in the bankruptcy case. If the claim is filed before the First Meeting of Creditors in bankruptcy, then the creditor has the right to participate in and vote at the meeting.

Form 31 proof of claim: My example

CLICK HERE TO SEE AND DOWNLOAD PROPERLY COMPLETED

FORM 31 PROOF OF CLAIM

Can I file a proof of claim after the deadline?

There are really only two important deadlines when it comes to filing a claim. The first is before the First Meeting of Creditors. As mentioned above, if you wish to participate in that meeting, then you need to have filed a properly completed valid claim before the start of the meeting. However, if you don’t file it by then, although you won’t be able to vote at the meeting, you have not lost out on anything else.

Once all the realization of assets of the bankrupt has been completed, being both the current assets, fixed assets, and possibly even intangible assets, if the Trustee has sufficient funds to issue a dividend payment, then the Trustee has to review all the claims filed. The Trustee also has to compare the claims register containing all of the creditor claims filed against the names and amounts listed in the bankrupt’s sworn Statement of Affairs.

If any creditors have not yet filed, and there will be a payment made to the unsecured creditors, the Trustee has to send a specific notice pursuant to the requirements of the BIA to each such creditor. The notice in writing says that a dividend will be paid, and if you don’t file your claim by a specific date, then you will be barred from receiving any payment.

How do I object to a form 31 proof of claim?

First, you have to be a creditor with a proven claim accepted by the Trustee. The BIA states that any creditor can inspect the claims filed. So if you have personal knowledge that a party listed on the sworn Statement of Affairs is really not a creditor, then you would be assisting the Trustee by reviewing the claims filed and pointing out any claims you believe are invalid, and why. However, it is very unusual for a creditor to take the time to do so.

The next opportunity and really the only time it matters, for a creditor to object to a claim filed by a creditor is if a dividend distribution is going to be made and the Trustee sends out the Final Dividend Sheet. If you think there are errors, then you can object to the approval of the Trustee’s Final Statement of Receipts and Disbursements and the Dividend Sheet.

Reasons that you may feel one or more claims are incorrect could be:

You do not believe that someone that has filed as a secured creditor can provide adequate proof of security with their claim.
You feel that the compromise of claims being proposed is improper.
There may be details of payments received by a creditor are missing and therefore their claim is overvalued.
The priority of claims listed is improper.
The priority of payment as listed in the Trustee’s Final Statement is incorrect.
Some of the more complicated claims, such as the claim of lessor, a claim by wage earner, claim by farmer or another claim for employees have been incorrectly calculated by the Trustee.

If you have any concern that there is an error with the amounts being claimed, or if you believe that there are circumstances where one or more claims are not valid, you should immediately communicate this to the Trustee.

Keep in mind that once the Trustee issues the Final Statement with Dividend Sheet and has the intention of making a payment to all creditors with valid claims, you have to file your own objection within 30 days of the date on which the notice was issued.

Form 31 proof of claim: Do you need help?

Do you or your company have too much debt? Is a financial restructuring or debt settlement plan necessary but you just don’t know where to start? If so, then you need the help of a professional trustee.

The Ira Smith Team has years of experience of helping individuals and companies successfully complete their restructuring proposal debt settlement plans. Our approach for each file is to create an end result where Starting Over, Starting Now takes place. This starts the minute you are at our door.

You’re simply one phone call away from taking the necessary steps to get back to leading a healthy, balanced hassle-free life, recover your money and move on to the next investment opportunity. Call us today for your free consultation.

Tags Bankruptcy, bankruptcy trustee, Consumer Proposal, Corporate Bankruptcy, debt settlement, financial restructuring, First Meeting of Creditors, form 31 proof of claim, how to complete form 31 proof of claim, insolvency, Ira Smith Trustee, licensed insolvency trustee, personal bankruptcy, proof of claim, proof of claim form, proxy, restructuring proposal, trustee

Brandon Blog Post

REBUILDING CREDIT CANADA: USE OUR PAINLESS 3 STEPS TO REBUILD CREDIT SCORE

Post author By Brandon Smith
Post date August 15, 2018

Rebuilding credit Canada: Introduction

After fully completing a consumer proposal or receiving a discharge from bankruptcy, it is important to start immediately rebuilding credit Canada. The purpose of this Brandon’s Blog is to provide you with our foolproof and painless 3 step plan to eliminate those negative credit checks and fix your credit trouble by rebuilding credit Canada.

Rebuilding credit Canada: Step 1 – Create good habits with a plan for discipline and self-control

After your discharge from bankruptcy or the full completion of a consumer proposal, you must create good habits of discipline and self-control. You won’t have any credit accounts and your goal is to show the credit bureaus that you can use credit responsibly and work your way back from bad credit score.

To do that, you need good new financial habits. You need to start creating a good payment history. A lack of these habits might have been partly responsible for your current situation, so working on changing bad habits, and creating new ones will lay the groundwork for a successful financial future.

Research has shown that on average, it takes more than 2 months before a new behaviour becomes automatic – 66 days in fact. So, while at the beginning, having to be disciplined and exert self-control over spending money mistakes might seem like hard work, stick with it for a couple of months, and very soon it will just become part of your daily routine.

Learn discipline through budgeting. You may be able to find a pretty good yet simple budget calculator spreadsheet. Aside from rebuilding your credit, learning how to create a realistic budget by looking at your essential expenses compared to your current level of everyday purchases. This will allow you to get a good handle on what your income requirements are and then sticking to it is the most important step of rebuilding credit Canada after bankruptcy or consumer proposal.

You’ll be looking closely at your money and personal income anyway, so use this time to get a real grasp on your entire financial situation. Take a look at credit cards and related statements. By only making the minimum monthly payment you are being charged interest. Look carefully at what the rate on purchases is that you are really paying.

Understand where your money comes from, and, more importantly, where you spend every penny. You’re going to need to make friends with spreadsheets and familiarize yourself with all your bank and bill statements. Create categories of all your expenses (e.g. rent, electrical bills, car insurance, groceries etc.) Using your past bank statements, look at your current spending plan in each category. You’ll probably be surprised at how much money you spend in some!

Set limits for how much you will spend per month in each category. This will likely mean making some sacrifices to ensure your budget balances (the total amount being spent does not exceed the total amount coming in). However, be realistic – don’t tell yourself you’re going to stop doing things you enjoy together. Instead, cut down on how often you do them. E.g. the budget spending plan for a meal out could be once a month rather than a couple of times a week.

Get in the habit of planning and recording every single expense, no matter how small. Keep receipts and go over where your money has gone every month. Plan rewards for different milestones along the way. It’s important to have things to look forward to and motivate you along the way.

Budgeting takes discipline and sacrifice but stays focused on the goal. You’re doing this to ensure you don’t fall back into the same bad habits as before. You are going to have to change some things – and what better time than while you’re starting over? You’re already doing the work, now the trick is to make this disciplined.

Practice self-control in your spending (and saving!) The golden rule of spending? Learn to live within your means – it sounds simple, but it can very hard to do. However, those who live within their means do not get into trouble with debt, and that’s what you’re working towards for the future! You’ve created a budget, you know exactly what you can spend in each category, now you need to execute on that. By following your

While in bankruptcy or a consumer proposal, any excess money you earn is going to go to your debtors. That may make it seem impossible to save. However, saving money should always be in your plan.

As soon as you are discharged from bankruptcy or your consumer proposal, start saving money every month. Work a specific amount (we recommend 10%) into your budget so that you learn to live within that new budget spending plan. Setting up automatic payments and transfers into your savings account on payday will ensure your money goes where it needs to before you even have time to think about spending it.

So where should this money go? First, establish an emergency fund so that you can avoid facing bankruptcy again in the future. A good emergency fund should cover at least 3 months of living expenses. Once your emergency fund is built, continue to save by contributing to your RRSP or TFSA as much as you possibly can while still meeting your month-to-month expenses.

Forming good habits of discipline and self-control is key to your permanent financial rehabilitation. Once you do so, you’ll find that building your credit will be relatively easy!

Rebuilding credit Canada: Step 2 – Work to rebuild your credit after bankruptcy or consumer proposal

It is true that a record of your insolvency filing will stay on credit reports. This is so for both a consumer proposal (3 years!) or a bankruptcy (7!). However, you can actually start rebuilding credit Canada right away.

There’s an old saying that goes “The best time to plant a tree was 20 years ago. The second-best time is now.” We recommend that you don’t wait 20 years, or even 3.

Here’s what you need to know to start building credit and improving your credit reports today:

Secured Credit Card – A secured credit card looks and functions just like a regular unsecured credit card, with your lender reporting to the credit bureaus on a regular basis. The only difference is that you put up an initial deposit as a security deposit in the form of cash. The minimum deposit or the maximum deposit you can afford to make acts as collateral upfront makes it a secured credit card. The amount of cash you put up as a deposit dictates your credit limits.

rebuilding credit canada

This protects the lender from the possibility of you defaulting on what you owe because your security fund will be used to cover any outstanding amounts. When you use this type of card, as far as the vendor is concerned, it acts just like an unsecured credit card. Every month when you pay off the balance by making your payments on time, it is reported to the credit bureaus. Then each credit bureau can update their records showing you are paying it off on time. That is how it can rebuild credit Canada.

A Secured Line of Credit – Much like a secured card, a secured line of credit is a revolving credit that is secured by the money or other security, you offer up in the beginning. As you use your line of credit and you make your payments on time, you will establish a picture of good money reminders habits which will both boost your credit score. These lines of credit are available through most banks. Again, creditworthiness and collateral, if required, set the credit limits.

Create Your Own Credit Building Programs – Credit building programs are one of the most effective methods for rebuilding credit after bankruptcy or consumer proposal. Programs like borrowing a small amount to invest in your RRSP. Then repay the loan in full before the next RRSP year.

This is beneficial in 3 ways: You don’t have to come up with the funds, you are investing in your future and by repaying the loan, you are showing you can handle credit properly which improves your credit score. This should also be combined with a secured card or line of credit, do double up on your credit score building program. Paying your bills on time also improves your credit score.

You want to follow your budget carefully. Avoiding late payments, making the full payment each month on your monthly credit card balance, not just the minimum payment, and don’t have a missed utility payment. Having timely payments and no late payments on your Canadian credit history, will take a poor credit score and start improving your credit rating by creating a new positive credit history.

An improved credit rating and improving credit reports will overturn the negative effects of your bad credit history, get your credit score ranges to improve, get you the credit score increase you deserve and catch the attention of the credit card company and improve your chances of access to credit products.

These new types of credit becoming available to you, and perhaps even existing credit card issuers giving you a credit limit increase, all go towards your rebuilding credit Canada. But you still need to stick to your spending plan. Just because you are getting access to credit again, does not mean you can abandon your proper budgeting. You don’t want to go back to the old habits that produced the poor credit history.

Whatever kind of credit loans you are looking to take out to help rebuild your credit, make sure you understand things properly. Read the credit applications carefully to see what you are really signing up for. If approved, read the credit agreement carefully so you will fully understand all the terms of the rebuilding credit Canada loan product.

As your credit reports improve, you will find new companies offering you new credit accounts and credit card providers either increasing your credit card limit or sending you applications for new credit cards lines. Again a word of caution. Don’t get carried away with all sort of credit products in your daily life. Keep it simple and stick to your budget. You really may only need one regular credit card from amongst the wide range of Canadian credit cards becoming available to you.

rebuilding credit canada

Rebuilding credit Canada: Step 3 – Maintain your spending plan good habits for the rest of your life

Rebuilding credit Canada is not a one-time event. Think of rebuilding your credit after bankruptcy like losing weight. In the beginning, dragging yourself to the gym and making kale smoothies is hard work. However, as you start to see the weight drop, it becomes easier and easier.

What happens when you reach your goal weight? Do you stop going to the gym and start eating pizza for breakfast? No! You just carry on as you are now – because it’s become a habit, and if you slip back into old habits, you’re quickly going to see all of your hard work come undone.

Regularly checking your full credit reports from both credit reporting agencies will help you see how your good habits are paying off. Kinda like weighing yourself to make sure you’re still where you want to be. If you start seeing negative results, take stock of what’s happening in your life that could be causing it and make changes to quickly get back on track. You want to keep seeing improvement in your credit reports.

Ultimately, whether you’re declaring bankruptcy or entering into a consumer proposal, it will be emotionally difficult. There is a light at the end of the tunnel though. Many people don’t realize that you can start building credit while going through both a bankruptcy or consumer proposal so that at the time of discharge, you’re already a few steps ahead. Follow these steps and you’ll find that rebuilding your credit after bankruptcy isn’t that difficult.

Rebuilding credit Canada: Do you know anyone who needs to get back on the road to financial recovery?

If you have too much debt, are unhappy with your debt situation and need someone to talk to about how a consumer proposal or even personal bankruptcy can fix your credit issues and improve your financial life, call the Ira Smith Team. We are professional credit counsellors and can help you learn good spending habits. Through consumer proposal payment arrangements you can make steady payments on prescribed payment dates. This will allow you to avoid bankruptcy by paying only a fraction of your total debt yet eliminate all of your debt. It will also get you credit repair.

We will listen to your issues and provide you with our thoughts and recommendations for free. That’s right; a no-cost initial consultation. We will look at your debt utilization and make recommendations to you on how to fix it. So why not? All you have to lose is your stress while rebuilding credit Canada. Why not fix things now so that your credit checks improve.

We will advise you whether or not we think you are a candidate for either a consumer proposal or bankruptcy. If we feel you can solve your financial problems without an insolvency process, we will tell you straight. The Ira Smith Team understands the stress you are under and the pain it is causing you and your loved ones.

We can eliminate your pain. I guarantee that you will start feeling better right away after our free initial consultation. Taking action after that will put you on the right path, Starting Over Starting Now

Tags Bankruptcy, budget, budgeting, building credit, Canada, Consumer Proposal, consumer proposal vs bankruptcy, credit building, credit bureau, credit score, emergency fund, Ira Smith Trustee, Line of Credit, personal bankruptcy, rebuilding credit, rebuilding credit canada, secured credit card, secured line of credit

Brandon Blog Post

330 UNIVERSITY AVENUE: CORPORATE BANKRUPTCY COURT TORONTO SECRETS EXPOSED FROM THE CANADA LIFE BUILDING

Post author By Brandon Smith
Post date July 18, 2018

330 University Avenue: Introduction

On the west side of University Avenue and immediately north of Queen Street, lies 330 University Avenue, in Toronto’s core. This University Ave. building is known as the Canada Life Building. Work on the building began in 1929 for the brand-new head office of the Canada Life Assurance Company and it opened up in 1931. It was the 4th structure to act as the head office of Canada Life. Most noteworthy is that this company was Canada’s earliest, as well as the biggest insurance provider.

330 University Avenue: Brief building history

The development of this fifteen-floor Beaux Arts structure was by Sproatt & Rolph. It stands at 285 feet (87 m), 321 feet (97.8 m) including its famous weather beacon. This building was the very first of scheduled buildings along University Avenue, however, the Great Depression stopped those plans. When it finished, it was among the highest structures in Toronto. It stays one of the biggest office complexes in Toronto with windows that tenants can open. In 1997, Toronto City Council designated the building a heritage property.

330 University Avenue: The most noticeable part of the building

The weather beacon was added in 1951. Its colour codes sum up the weather report at a look. Environment Canada out of Toronto Pearson International Airport revises the weather details 4 times each day.

The top light indicates:
Consistent green = clear
Stable red = overcast
Blinking red = rainfall
Blinking = snow

The white lights along the tower show:

Lights rising = warmer
Lights running down = colder
Solid = consistent temperature level/ No adjustment

During the day, the weather tower shows the weather for that day. The evening signals show the weather for the next day.

330 University Avenue: 330 university avenue 8th floor

But enough of the history lesson. Maybe you didn’t come to this vlog to learn about the building’s history; I will now change the focus. On the 8th floor are the courtrooms. These Courts are presided over by Judges of the Superior Court of Justice Toronto Region. All corporate insolvency matters, certainly not just corporate bankruptcy matters, are part of what is known as the Commercial List.

Personal bankruptcy in Toronto Ontario is normally first heard in a different Court up the street at 393 University Avenue before a Registrar in Bankruptcy. The Registrar is a Master of the Court hearing bankruptcy matters. Most importantly, a Commerical List Judge in 330 University Avenue, Toronto Ontario M5G 1R8 must hear any appeal of a Registrar’s decision. This is for the reason that is what the rules state.

330 University Avenue: The corporate insolvency matters overview

The Court at 330 University deals mainly with corporate insolvency matters. Examples are:

Corporate receivership – appointment of a receiver, motions by the receiver or a stakeholder requesting approval for specific relief, approval motions for sale of assets or fee and costs of the receivership administration, and above all, the receiver’s discharge application.
Corporate restructuring – all motions for bankruptcy protection and restructuring of a company under the Companies’ Creditors Arrangement Act (CCAA), motions by the Court-appointed monitor or a stakeholder requesting approvals, approval motions for the Restructuring Plan of Arrangement including voting rights of all stakeholders, approval of the implementation of the Plan of Arrangement, approval of the fee and costs of the CCAA administration, monitor’s discharge application.
Personal and Corporate bankruptcy matters – as indicated above, these would mostly be either an appeal from Registrar in Bankruptcy’s decision or an opposed matter that the Registrar was not allowed to hear under the bankruptcy rules.

330 University Avenue: Do I need a lawyer to appear at 330 University Avenue?

Corporations are not a human being, so they cannot show up in Court and speak. Therefore, a company requires a person to act on its behalf. Although a shareholder or officer and director authorized to speak on behalf of the company can represent the company in Court, it is not advisable.

I say this because the legal matters heard are most complex. As a result, an experienced insolvency lawyer is necessary to properly represent the position of either the company or a stakeholder.

The licensed insolvency trustee (formerly known as trustee in bankruptcy) who is acting as the receiver, monitor or trustee, similarly will have a competent insolvency or bankruptcy lawyer acting on its behalf. Motion filings always include very detailed reports.

Complex text, financial calculations and detailed exhibits will form part of the filed material. Most laypeople would need both an independent licensed insolvency trustee as a financial advisor, as well as an experienced corporate insolvency lawyer on their team. Therefore, the costs can mount quickly.

330 University Avenue: Is your company going to be in Court either for a restructuring or as a stakeholder?

Is your company dealing with severe economic problems and you aren’t sure what to do? There’s no embarrassment in looking for specialist, financial advice. As a licensed insolvency trustee, the Ira Smith Team can check your company’s circumstances and assist you to get to the most effective solution to solve your company’s financial issues. Several of our successful case studies can be found on our website.

Ira Smith Trustee & Receiver Inc. is here to assist. The government licenses and supervises us. Hence, to keep our license in good standing, we must adhere to a stringent code of ethics. We are well-known to the Judges at 330 University Avenue and all the Toronto insolvency lawyers.

I know the pain and discomfort you are in because of your corporate financial problems. You will certainly discover that we use a pleasant, non-judgmental technique in understanding you, your goals and in restructuring your company.

Give me a phone call today and allow me to address your economic issues Starting Over, Starting Now.

Tags 330 university avenue, 330 university avenue 8th floor, 330 university avenue toronto ontario m5g 1r8, bankruptcy court secrets, bankruptcy lawyer, canada life, Canada Life Building, CCAA, commercial list, Companies’ Creditors Arrangement Act, Corporate Bankruptcy, corporate receivership, corporate restructuring, Ira Smith Trustee, judges of the superior court of justice toronto region, licensed insolvency trustee, personal bankruptcy, Superior Court of Justice, Superior Court of Justice Toronto Region

Introduction

Bankruptcy or (consumer) proposal

Proposal

Your bank account

Registered Retirement Savings Plan (RRSP), Registered Retirement Income Fund (RRIF) or Deferred Profit Sharing Plan (DPSP)

Canada Pension Plan (CPP) and Old Age Security income (OAS)

Tax-Free Savings Account (TFSA), Registered Education Savings Plan (RESP) and other non-registered account investments

Annuity revenue in bankruptcy

Bankruptcy Act Canada summary

Introduction

Buzz

Woody

Mr. & Mrs. Potato Head

Jessie

Consumer proposal story summary

Financial security Introduction

Canadians maxed out on debt

It’s no longer about purchases – that ship has already sailed!

New debt on top of old debt

Bank of Canada

Financial questions for Canadians

Canadians need to set up a proper household budget

What about you or your company?

If you would rather listen to the Bankruptcy statistics Canada 2018 blog audio file, please scroll down to the end for the podcast.

Bankruptcy statistics: Introduction

Bankruptcy statistics: The latest numbers

Bankruptcy statistics: What is the real issue

Bankruptcy statistics: Canadian household debt

Bankruptcy statistics: Debt in a rising interest rate environment

Financial New Year’s resolutions 2019: Introduction

Financial New Year’s resolutions 2019: The 8 most common resolutions

Financial New Year’s resolutions 2019: Why do we do it?

Financial New Year’s resolutions 2019: Will we keep our resolutions?

Financial New Year’s resolutions 2019: Falling short is OK

CP vs. bankruptcy

Consumer Proposal Canada or bankruptcy: Conclusion

What is the difference between bankruptcy and insolvency Canada: Introduction

What is the difference between bankruptcy and insolvency Canada: Insolvency

What is the difference between bankruptcy and insolvency Canada: Bankruptcy is a legal рrосеѕѕ

What is the difference between bankruptcy and insolvency Canada: Assets exempt in a bankruptcy in Ontario

What is the difference between bankruptcy and insolvency Canada: Surplus income

What is the difference between bankruptcy and insolvency Canada: What is surplus income

How do you figure surplus income?

Bankruptcy discharge

Is your debt keeping you up at night?

Form 31 proof of claim: Introduction

What is the form 31 proof of claim form?

Form 31 proof of claim: Form 31

Form 31 proof of claim: Acceptability of proof of claim

Does a creditor have to file a claim?

Form 31 proof of claim: My example

Can I file a proof of claim after the deadline?

How do I object to a form 31 proof of claim?

Form 31 proof of claim: Do you need help?

Rebuilding credit Canada: Introduction

Rebuilding credit Canada: Step 1 – Create good habits with a plan for discipline and self-control

Rebuilding credit Canada: Step 2 – Work to rebuild your credit after bankruptcy or consumer proposal

Rebuilding credit Canada: Step 3 – Maintain your spending plan good habits for the rest of your life

Rebuilding credit Canada: Do you know anyone who needs to get back on the road to financial recovery?

330 University Avenue: Introduction

330 University Avenue: Brief building history

330 University Avenue: The most noticeable part of the building The weather beacon was added in 1951. Its colour codes sum up the weather report at a look. Environment Canada out of Toronto Pearson International Airport revises the weather details 4 times each day.

330 University Avenue: 330 university avenue 8th floor

330 University Avenue: The corporate insolvency matters overview

330 University Avenue: Do I need a lawyer to appear at 330 University Avenue?

330 University Avenue: Is your company going to be in Court either for a restructuring or as a stakeholder?

***Form 31 proof of claim*: Acceptability of proof of claim**

330 University Avenue: The most noticeable part of the building

The weather beacon was added in 1951. Its colour codes sum up the weather report at a look. Environment Canada out of Toronto Pearson International Airport revises the weather details 4 times each day.