Tag: personal bankruptcy

CREDIT SCORE RATING: YOU HAVE A GREAT ONE BUT YOU WERE STILL REJECTED

Post author By Brandon Smith
Post date May 5, 2015

Credit score rating is an important part of what lenders look at when you apply for a loan, but it is not the only thing. We all know that credit score rating is used to determine your credit worthiness, but what you may not know is that your credit score rating is not the only factor used. Even with a great credit score rating, you may still be rejected when applying for credit. How is this possible?

In order to have a good credit score rating you must be able to show that you have the means to repay credit. However, your ability to repay credit may change depending on your income and your debt load. Using mathematical formulas, something called a debt service ratio (DSR) is calculated. Your DSR shows what percentage of your monthly income goes toward paying off debt. You may be managing your debt today, but if your DSR shows that with additional credit responsibilities you may have trouble meeting or managing your existing expenses, your credit application may be rejected. The same applies to an entrepreneur who’s looking to finance his/her small business with a small business loan. The credit worthiness of the individual has to be taken into account, as that’s who the lender is really loaning the money to, either directly or by way of a personal guarantee.

If you offer collateral as security in exchange for credit, the value of your collateral must be established. An asset that you think has great value may not be worth what you think it is in the eyes of the lender. Typically real estate and guaranteed investments are better forms of collateral than your jewelry, car, machinery or equipment.

Unfortunately many people are carrying too much debt but are fearful of the bankruptcy process, so they attempt to borrow more money in order to either consolidate their loans or for a specific need. Adding more debt is not the answer. Personal bankruptcy is an option, but not one to be feared. And, there are bankruptcy alternatives to be considered as well. Don’t run away from debt. Contact the Ira Smith team. We can help you deal with debt and Starting Over, Starting Now you can be well on your way to a debt free life

Tags Bankruptcy, bankruptcy alternatives, Credit, credit score, credit score rating, credit scores, Debt, debt service ratio, personal bankruptcy, small business loan, starting over starting now

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ALTERNATIVES TO PERSONAL BANKRUPTCY: DON’T AVOID THE BANKRUPTCY DISCUSSION

Post author By Brandon Smith
Post date April 28, 2015

Thankfully, there are alternatives to personal bankruptcy. Say the word bankruptcy and people naturally recoil. I don’t know if there is more stigma attached to another word in the English language. In reality bankruptcy is not something to be ashamed of, it should not be avoided at all costs and it’s not a deep dark hole; it can be the light at the end of the tunnel. As with other alternatives to personal bankruptcy, it is an option. Let’s explore why avoiding bankruptcy can do more harm than good.

What is bankruptcy? Bankruptcy is incredibly misunderstood. According to the Office of the Superintendent of Bankruptcy Canada Bankruptcy is a legal process designed to relieve honest but unfortunate debtors of their debts. At the end of the process, the bankrupt is released from the obligation to repay the debts they had when the bankruptcy was filed (with some exceptions).

Why avoiding bankruptcy can do more harm than good: Although there are alternatives to personal bankruptcy which merit review, bankruptcy is often a good thing. A recent report by the Federal Reserve Bank of New York states:

People who filed bankruptcy had access to more new lines of credit than those who limped along in a poor financial state which clearly puts to rest the misconception that filing bankruptcy closes the door to new credit.
Those who didn’t file bankruptcy were described as insolvent.
The individuals who go bankrupt experience a sharp boost in their credit score after bankruptcy, whereas the recovery in credit score is much lower for individuals who do not go bankrupt
Insolvent individuals who do not go bankrupt exhibit more financial stress than those who do.

Are you insolvent and looking for solutions? The Ira Smith Team is here to offer alternatives to personal bankruptcy and bankruptcy help in Vaughan and throughout the GTA. Starting Over, Starting Now, Ira Smith Trustee & Receiver Inc. can help you overcome your financially difficulties. Contact us today.

Tags alternatives to personal bankruptcy, bankrupt, Bankruptcy, credit score, honest but unfortunate, insolvent, Lines of Credit, Office of the Superintendent of Bankruptcy Canada, personal bankruptcy, starting over starting now, trustee

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PERSONAL BANKRUPTCY CAN BE A GREAT BEGINNING

Post author By Brandon Smith
Post date December 16, 2014

Personal bankruptcy is rarely spoken of in a positive light, yet for some, it can be a great beginning. Here’s a truly inspirational story of a new beginning from the files of Ira Smith Trustee & Receiver Inc.

Molly (not her real name) was a 41-year-old woman who was married with one child. She was well educated and had been a high school chemistry teacher. Sadly, she became an alcoholic and her life fell into ruin. Alcohol had taken over her life and she could no longer work as a teacher. Now unemployed she resorted to using credit cards to buy alcohol and before long her credit cards were maxed out.

She needed to work to pay for her habit so she went back to community college to become a law clerk. Molly found work as a law clerk but she couldn’t give up drinking. Alcohol was destroying her work life and her personal life. She continued to max out her credit cards and previously obtained lines of credit. To make matters worse Molly couldn’t afford to pay her income tax liability which was greater than what was deducted at source by her employer.

Molly needed to rid herself of her debts so she came to us to file for personal bankruptcy. We knew that for Molly to truly get a fresh start she needed to deal with her alcoholism. We insisted that she join AA if she wanted us to support her discharge from personal bankruptcy. Molly joined AA, attended meetings and stopped drinking. She ultimately became a sponsor to other AA members.

Molly really turned her life around. She stopped drinking, joined AA and lived within her means. As a result of her willingness for overall rehabilitation, the Trustee recommended that Molly obtain an absolute discharge, which she did. Molly’s whole life improved including her relationship with her family.

Personal bankruptcy can be a great beginning

Personal bankruptcy was the start of a great new beginning for Molly and if you’re facing serious debt problems it can be for you too. Contact Ira Smith Trustee & Receiver Inc. today and Starting Over, Starting Now you can turn your life around too.

Tags Bankruptcy, credit card debt, file for bankruptcy, personal bankruptcy, starting over starting now, trustee

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BANKRUPTCY TRUSTEES ADVISE BANKRUPTCY IS A FINANCIAL TOOL

Post author By Brandon Smith
Post date October 16, 2014

Bankruptcy trustees advise people in financial distress to think of bankruptcy as just another financial tool. Bankruptcy still carries a stigma with it for many people, but if you have too much debt, cannot repay your debts and are afraid to open the mail or answer the phone because of all the collection letters and collection calls you receive, you need to take some positive step to eliminate this stress in your life by finding a responsible and realistic solution.

Bankruptcy trustees will tell you that none of their clients wanted to call and for sure did not wish to see them. People come to bankruptcy trustees feeling ashamed, guilty and worthless. It is normal to feel that you have failed in such circumstances, but it is also important for your emotional and financial well-being to think of bankruptcy or one of the various bankruptcy alternatives as another financial tool and to use one of these tools to fix the situation for yourself.

Our media promotes the feeling that personal bankruptcy is somehow equated with failure, instead of it being described as merely a negative financial outcome for the honest, but unfortunate person. Everyone deserves a second chance, and using bankruptcy, or one of the bankruptcy alternatives is a way to get that second chance. Many people have done so in the past, and many will do so in the future; that is why Parliament created the laws forming our bankruptcy legislation, the Bankruptcy and Insolvency Act. Keep in mind, many famous people have previously filed for bankruptcy.

It is interesting that our media casts personal bankruptcy in a negative light, but shows corporate bankruptcy protection as something positive. When we heard years ago about Air Canada filing for bankruptcy protection, or more recently, American Airlines filing for bankruptcy, people did not stop flying the airlines because they were disgusted that a company would dare to make use of the bankruptcy financial tool, but rather, people were worried about whether or not they would lose any of their airline point privileges!

Why can’t we think of personal bankruptcy as the same positive step forward financial tool in dealing with an unfortunate situation?

Bankruptcy trustees are the people licensed by the Government of Canada to administer the provisions of the Bankruptcy and Insolvency Act. Bankruptcy trustees need to obtain a full understanding of your assets and liabilities and understand your personal situation in order to advise whether you should go bankrupt, or if you are a candidate for a consumer proposal instead. No doubt people seeking the assistance of bankruptcy trustees have many questions needing to be answered also.

Are you suffering financially for any reason? Don’t be ashamed; contact Ira Smith Trustee & Receiver Inc. Debt won’t go away on its own. You need professional help Starting Over, Starting Now so that you can regain your dignity and resume on a path to debt free living.

Watch this 5 minute video to listen to how another bankruptcy trustee explains it.

http://youtu.be/GCcCHJl1V44

Tags Air Canada bankruptcy, American Airlines bankruptcy, Bankruptcy, bankruptcy alternatives, Bankruptcy and Insolvency Act, bankruptcy legislation, bankruptcy protection, bankruptcy trustee, bankruptcy trustees, collection calls, collection letters, Consumer Proposal, Corporate Bankruptcy, financial distress, financial tool, personal bankruptcy, starting over starting now, too much debt

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CANADIAN PAYDAY LOANS NO CREDIT CHECK: TOO GOOD TO BE TRUE!

Post author By Brandon Smith
Post date July 15, 2014

If something is too good to be true, like Canadian payday loans no credit check, it usually is. More companies seem to be springing up like weeds every day offering Canadian payday loans. No credit check is the hook they use to bait you. When it comes to money, no one offers you something for nothing. Think logically, if you have bad credit or no credit, why would any legitimate company be willing to give you money? You and I both know it doesn’t make sense. Yet, the Canadian Payday Loan Association says as many as two million Canadians take out payday loans every year. Why would anyone respond to an ad for Canadian payday loans no credit check? They don’t have access to conventional credit like credit cards, lines of credit or overdraft and they aren’t aware that they can solve their problems instead of taking on more debt.

How can a company offer Canadian payday loans no credit check and make money? Simple; they charge exorbitant interest rates which are disguised so that the consumer has no idea what they are signing on for. According to Scott Hannah, president of Canada’s Credit Counselling Society, when a payday lender offers you 21% interest for a 14 day loan, that is actually 546% annual interest! Can you imagine anyone agreeing to pay 546% annual interest? But when it’s disguised as 21% for a 14 days loan, it seems quite benign. The clients who make good on their loans pay for the ones that default on their loans and those outrageous interest rates offset the losses.

Many people in the private and public sector are outraged at Canadian payday loans no credit check companies and many politicians like Cheri DiNovo are trying to shut them down. This is what she has to say:

Ontario NDP MPP for Parkdale-High Park, Cheri DiNovo

I feel they’re just ripping off poor people who have to go there for a loan and it’s just ridiculous what they charge. You’re only allowed to charge $17 on the hundred. Well with them, it’s a lot more. I think it’s something that should be outlawed and something the company should be shut down. I mean it’s outrageous.

There are better solutions to your financial problems than taking on more debt. Say NO to Canadian payday loans no credit check companies. Say YES to real financial advice from a professional trustee who is federally licensed and trained to deal with people facing a financial crisis or bankruptcy.

I understand that you are scared to declare personal bankruptcy. That is why personal bankruptcy is the last option we look at when providing you with a no charge first consultation. We first consider your entire situation, and discuss with you the bankruptcy alternatives that might be proper for you to consider. It is only after we exhaust every possible bankruptcy alternative, that we even consider discussing bankruptcy with you. Please check out the information we provide in our top 20 bankruptcy faqs section, so that you can gain real knowledge. More debt through the various Canadian payday loans no credit check companies is just a very expensive band aid, it is not a proper solution to living a debt free life!

Contact Ira Smith Trustee & Receiver Inc. today. Starting Over, Starting Now you will be on your way to solving your problems, not taking on more debt.

Tags Bankruptcy, bankruptcy alternatives, bankruptcy faqs, Canadian payday loans no credit check, Cheri DiNovo, Credit, credit check, Debt, interest rates, Lines of Credit, payday loans, personal bankruptcy, starting over starting now, toronto, trustee

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SCARED TO DECLARE PERSONAL BANKRUPTCY?

Post author By Brandon Smith
Post date July 8, 2014

Scared to declare personal bankruptcy? Don’t be. Bankruptcy is a legal process that can provide relief to honest but unfortunate individuals who are unable to pay their debts.

According to the Office of the Superintendent of Bankruptcy Canada:

A total of 118,678 Canadians either filed for personal bankruptcy or filed a consumer proposal in 2013, an increase of +0.2% over 2012.
The long-term trend in Canadian personal bankruptcy statistics is upward.
Bankruptcies are gradually increasing, mainly because of the high levels of debt many Canadians now carry.
Consumer debt reached over 163% of annual income in 2013, meaning that for every $3 the average Canadian earns in a year, they now have almost $5 in debt.

Employment and Social Development Canada reports:

In 2011, 122,999 Canadians were unable to repay their debts.
Serious financial difficulties brought them to file either a payment proposal or a bankruptcy. The average amount owed was $119,021.
About 53% of Canadians filing a proposal or bankruptcy in 2011 were aged 30 to 49 years.
In 2007 individuals who were divorced or separated were more likely to file a proposal or bankruptcy than Canadian adults on average.
In 2008 the most frequent type of debt reported by individuals filing a proposal or bankruptcy was credit card debt (91%).

Still scared to declare personal bankruptcy? Huffington Post reports that one in six Canadians will eventually go bankrupt. Don’t be scared to declare personal bankruptcy; there are advantages:

It is relatively quick
It can be less expensive than other options
It eliminates your unsecured debts
You will have some protection from creditors, legal action and wage garnisheeing
After your discharge your credit risk can start to improve

If you are considering bankruptcy, your first step should be to meet with a trustee. Trustees are individuals licensed by the Office of the Superintendent of Bankruptcy (OSB) to administer the bankruptcy process. Contact Ira Smith Trustee & Receiver Inc. We will evaluate your financial situation and discuss various bankruptcy alternatives which include credit counselling, debt consolidation and consumer proposals that could help you to solve your financial problems. Don’t be scared to declare personal bankruptcy. It’s just an option to consider so that Starting Over, Starting Now you can be well on your way to financial health.

Tags Bankruptcy, bankruptcy alternatives, consumer debt, Consumer Proposal, consumer proposals, credit card debt, credit counselling, Debt, debt consolidation, honest but unfortunate, personal bankruptcy, scared to declare personal bankruptcy, toronto, trustee, trustees

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PERSONAL LOANS FOR BAD CREDIT: INTERESTED?

Post author By Brandon Smith
Post date July 1, 2014

Personal loans for bad credit commercials and advertisements are very seductive. It seems so easy – money in your bank account in no time and they can be arranged online 24/7. Serious debt can be debilitating, leaving you feeling helpless, out of control and not knowing where to turn. The answer to your problems is personal loans for bad credit, but is it really?

Personal loans for bad credit are not the same as a loan you’d get from your bank or credit union. The interest rates are much higher because the risk to the lender is much greater. As a professional trustee I can tell you that the last thing you need is more high cost debt. What you need is a solid financial plan to get you out of debt, not personal loans for bad credit.

How can you get out of debt without resorting to high cost personal loans for bad credit? There is no instant or quick fix for serious debt issues. What you need are answers, options and realistic plan for recovery. Firstly, make an appointment with a professional trustee as soon as possible. Relying on advertising for financial advice is never a good idea. Trustees are professional, licensed, federally regulated financial services professionals who are uniquely positioned to provide long term, sensible solutions on reducing debt. Personal bankruptcy is not your only choice. There are bankruptcy alternatives such as credit counselling, debt consolidation or consumer proposals.

Don’t fall prey to high cost personal loans for bad credit. For sound financial advice you can depend on, contact Ira Smith Trustee & Receiver Inc. today. Starting Over, Starting Now you can be well on your way to a debt free future.

Tags bad credit, Bankruptcy, bankruptcy alternatives, consumer proposals, credit counselling, Debt, debt consolidation, financial plan, high cost debt, personal bankruptcy, personal loans, personal loans for bad credit, professional trustee, starting over starting now, toronto, trustee

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BANKRUPTCY FAQ CANADA

Post author By Brandon Smith
Post date June 15, 2014

Bankruptcy FAQ Canada has been compiled from the questions most asked of us by people facing financial challenges.

If you’re like many Canadians who are struggling to pay the bills, living paycheque to paycheque and can’t even fathom a way out of this trouble, you need help from a professional, federally licensed trustee. Ira Smith Trustee & Receiver Inc. can help get your life back on track Starting Over, Starting Now. Contact us today.

And now, click for BANKRUPTCY FAQ CANADA

Tags Bankruptcy, bankruptcy alternatives, bankruptcy faq canada, Consumer Proposal, living paycheque to paycheque, personal bankruptcy, starting over starting now

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CANADIAN REAL ESTATE BUBBLE BURST: WHEN?

Post author By Brandon Smith
Post date June 12, 2014

Will the Canadian real estate bubble burst has been the subject of several articles in the newspapers recently quoting Canadian and American economists. So far from what I have read, half of the economists quoted say there is not a Canadian real estate bubble, with statistics to show that there is a healthy real estate market and therefore we will not have a Canadian real estate bubble burst.

The other half of the economists, provide statistics to show that there is a Canadian real estate bubble, it has reached the same unsustainable levels as was the case in 2008 in the United States and that there will be a Canadian real estate bubble burst to drag all of us down.

Although my Firm has done many real estate receiverships, the most famous so far being the Court-appointed receivership of the highly publicized The Suites at 1 King West, built by Harry Stinson, my crystal ball is no better than yours. I cannot tell you if:

a Canadian real estate bubble burst will not happen since we are in a safe real estate market where Canada is attractive to immigrants from around the world looking for a safe haven for their money, and they truly believe Canadian real estate is it; or
real estate prices are unreasonably high and that there will be a Canadian real estate bubble burst.

As far as the economist’s statistics, which are being used to prove both sides of the argument, all I can do is quote British Prime Minister Benjamin Disraeli when he said there are “Lies, damned lies, and statistics“, to describe the persuasive power of numbers, particularly the use of statistics, to bolster weak arguments.

In our recent blog, FINANCIAL CRISIS IN CANADA: CAN REAL ESTATE PRICES TRIGGER ONE?, we reported that:

7.5% of the Canadian workforce is in the construction industry, while 7% of the Canadian economy is based on residential construction – both record highs;
the Canadian unemployment rate rose from 6.9% to 7.2%;
the Canadian debt-to-income ratio has soared to a record 164%, above levels experienced in the U.S. before the financial crisis; and
the Canadian Bankers Association reports that 70% of all household debt in Canada is made up of residential mortgage debt.

But there is one certainty I can tell you about. Even if there is a slowdown in the Canadian real estate industry, and not a Canadian real estate bubble burst, residential construction workers and real estate agents will suffer. A slowdown in residential construction, and less residences being sold, does not bode well for these two groups. So it will be the severity of the slowdown, and the effect on real estate prices, to know whether or not there actually is to be a Canadian real estate bubble burst.

So, what can they do to stop a Canadian real estate bubble burst? The answer is nothing. However, they should always have arranged their affairs so when there is a slowdown, they were always:

living within their means by spending less than they earn so that they would not have problems living paycheque to paycheque;
using proper budgeting techniques to make sure they were paying down a portion of their debt with every pay;
paying themselves first by maintaining a program to make sure that they were putting away a portion of every pay into savings for investment so that they would be able to weather any downward blips in their income;
making sure their income tax was paid up on time so that they would not have any large amounts outstanding from past years in a time when their incomes were reduced;
only charging to credit cards what they would be able to pay off in full every month so as not to incur credit card debt with high interest costs; and
reviewing their credit report to make sure their credit rating was accurate, and if they were experiencing any credit problems availing themselves of a proper credit counselling agency, NOT one of the debt settlement companies.

So as you can see, there is no magic pill that you can take to solve your financial problems if there is a Canadian real estate bubble burst, an illness, an emergency, or when life just throws a curve ball at you. The best time to have guarded against financial challenges, if you truly were worried about a Canadian real estate bubble burst, was before it happened.

If you’re financial well-being, and that of your entire family depends on the value of your real estate always rising, and you will be doomed if there is a Canadian real estate bubble burst, whether you wish to admit it or not, you have serious financial problems. Before disaster strikes as a result of a Canadian real estate bubble burst or otherwise, contact Ira Smith Trustee & Receiver Inc.

We can review your situation with you, in a no charge initial consultation meeting, and provide you with real options. If we meet early enough, we can discuss various bankruptcy alternatives such as credit counselling, debt consolidation or consumer proposals, all in order to avoid personal bankruptcy. We will go over all of your options, and encourage and help you to implement the one that is right for you.

Together we can solve your problems with immediate action and the right plan so that Starting Over, Starting Now will become your reality.

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DON’T BE MISLEAD BY ADVERTISING GIVING FINANCIAL ADVICE

Post author By Brandon Smith
Post date December 10, 2013

Have you heard the radio advertising spots by a tax lawyer in Canada who is trying very hard to make you believe that he is The Rock Star in the world of tax problems and that he and only he can help you? One commercial ends with, “Don’t call a Trustee, call me”. Isn’t it amazing that without knowing anything about you and without a consultation, he knows exactly what your problems are and how to fix them? And, he has no way to know if a Trustee is all you require to solve your serious debt issues. However, fear based advertising must be working for him because he spends fortunes on it.

Don’t take advice from an advertisement. If you have legal issues, absolutely you need a lawyer in Canada. But, the reality is that Canadian bankruptcy law doesn’t differentiate between tax debts and other kinds of unsecured debt, therefore most people can declare bankruptcy on taxes owing. In fact, 50% of the people who file a consumer proposal or declare personal bankruptcy include some form of tax debt. If you are experiencing serious debt problems you must consult with a Trustee before declaring bankruptcy; no doubt you will have many questions about the bankruptcy process. The Trustee will evaluate your case and advise you on all of your alternatives – credit counselling, debt consolidation, consumer proposals, and bankruptcy. Bankruptcy and consumer proposals are administered by a Bankruptcy Trustee, not a lawyer. In fact you cannot declare bankruptcy through a lawyer unless the lawyer is also a Trustee in Bankruptcy.

There are cases in which you may need a lawyer:

Tax debts are generally discharged in bankruptcy like other debts. However, if you have tax debts and the CRA (Canada Revenue Agency) is opposing your discharge, it is recommended that you seek legal assistance.
In most cases Trustees do not act as your advocate. If you believe you need an advocate, you should consult a lawyer. Communication between you and your lawyer is confidential and privileged.

This is not an advertisement and we’re not telling you that we are Rock Stars. Ira Smith Trustee & Receiver Inc. is a full service insolvency and financial restructuring practice serving companies and individuals throughout the Greater Toronto Area (GTA) facing financial crisis or bankruptcy that need a plan for Starting Over, Starting Now. We approach every file with the attitude that corporate or personal financial problems can be solved given immediate action and the right plan. Our bankruptcy law is complicated. Canada (Superintendent of Bankruptcy) v. 407 ETR. Also check out our bankruptcy faqs. If you’re having serious debt issues, and yes, even tax debt, contact us today. We can provide you with realistic choices for practical decision-making.

Tags Bankruptcy, bankruptcy alternatives, bankruptcy faqs, bankruptcy trustee, Consumer Proposal, consumer proposals, credit counselling, debt consolidation, financial restructuring, insolvency, personal bankruptcy, tax lawyer, tax lawyer in Canada, trustee, trustee in bankruptcy