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CORONAVIRUS RISKS INCLUDE THE CANADIAN ECONOMY

coronavirus risks

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

Coronavirus risks introduction

The COVID-19 is spreading out across the world. The unique coronavirus is becoming an international pandemic. COVID-19 is the breathing illness triggered by the novel coronavirus that came from Wuhan, China. The fast-spreading infection has actually killed more than 3,000 people as well as hitting at least 90,000, so far mostly in China. The disease is coming to North America right now in airports and on cruise liners. This Brandon’s Blog is to talk about the coronavirus risks and discuss why Canadians and the Canadian economy is not immune.

Coronavirus explained

Coronavirus is spread out primarily via tiny droplets coughed or sneezed straight from a contaminated individual right into the face of a person close by. The spreading is different than the more infectious air-borne transmission of the virus-like measles, which can stay suspended in enclosed areas and be taken in hours after being exhaled by ill people.

Surgical face masks do not offer a proper seal around the face so while it does secure from respiratory system droplets from a sneeze or a cough, the microbe is still present in airborne droplets that can navigate out of a medical mask. The spread of the illness is proceeding and Canadians are appropriately asking themselves how they can get security against the infection. Children who obtain the infection frequently show light symptoms and some have none. The reported cases of major illness, as well as death up until now, are in adults.

Coronavirus prevention needs a global response

Coronavirus has demanded a global public health reaction. Countries are putting out daily updates on coronavirus dangers. Strains of a brand-new infection are spreading out. We do not yet know how to deal with the brand-new germ, and we won’t know till more information can be found by the experts. An additional vital unknown is exactly how infectious the coronavirus is.

The Globe and Mail report states that the coronavirus is circling around the planet and showing the dangers of the globalization design. The ailment is creating a great deal of anguish around the world. This pathogen is a little bit of a strange illness since it’s not assaulting youngsters. Up until now, at least 95,000 persons have actually acquired the disease, with about 3,300 having passed away from it. The deaths have been up until now mainly in China. But right here is a less-recognized reality. The incubation period of this coronavirus is generally under two weeks, yet certain reports suggest it often can take 3 weeks.

Coronavirus has actually infected greater than 80 countries. After starting in China, this illness is currently spreading out quickly around the world. The introduction of a novel coronavirus has actually clearly demonstrated the coronavirus risks and the need for clear, timely, and verifiable details from reliable sources.

A look at just how prevalent this pandemic is can be shown by various stories like:

  1. The variety of people who have tested positive in New York state for the unique coronavirus has increased to 22 after a substantial boost in screening, Governor Andrew Cuomo has actually said.
  2. Florida authorities reported that two people that tested positive for the brand-new coronavirus have passed away.
  3. South Africa’s news that an instance of coronavirus has been validated in the nation makes it the 3rd sub-Saharan country to report the infection.
  4. The United States has asked Iran to release all Americans from its prisons on clinical furloughs over anxieties the coronavirus might be infesting the country’s prisons.
  5. Paramedics in protective clothing and Israelis putting on masks and medical gloves stand near a dedicated polling station where people under quarantine from the coronavirus can vote in Israel’s nationwide political election, in Tel Aviv.
  6. The results of the coronavirus can be seen in Tokyo.
  7. A second person in England that tested positive for coronavirus has died, the UK’s Chief Medical Officer verified.
  8. California Gov. Gavin Newsom said the cruise liner Grand Princess would continue to be kept offshore until travellers and crew experiencing signs and symptoms that may follow the coronavirus can be tested to figure out whether they have it.
  9. Individuals wait outside the new medical exam department on the grounds of the Charite University Hospital campus Virchow in Berlin, where people seeking help from the coronavirus can be checked.
  10. Iran claimed the coronavirus has caused the death of 124 individuals amid 4,747 validated cases in the Islamic Republic as authorities cautioned they might use force to limit travelling between cities.

Coronavirus information – Canada

Coronavirus in Canada does run the risk of becoming a pandemic if the rate of community spread contracting the virus without entering contact with somebody from an infected region significantly rises. The coronavirus has thus far had health consequences for a fairly small number of Canadians. There are thus far 57 validated cases in Canada, many involving people that have actually recovered. This number changes daily.

Mostly all of the destinations Canadians usually take a trip to are extremely secure. The government of Canada’s advisories currently impacts just a few of the destinations.

Obviously China, along with:

  • Hong Kong
  • Iran
  • Japan
  • North Italy
  • Singapore
  • South Korea

Canadian experts believe age, as well as health background, might play the biggest roles in identifying how the unique coronavirus can affect an individual. Local transmission of the coronavirus in Canada is so far person-to-person spread within areas in Canada.

Covid-19 and the Canadian economy

The Canadian economy will certainly be negatively influenced by this infection, similar to all other world economic climates. International Monetary Fund stated the international financial expectation has actually changed to even a more dire situation. The coronavirus has actually enhanced the risk of a worldwide recession this year, credit rating firm Moodys stated. It looks likely that the coronavirus will do significant economic damage.

The coronavirus will lead global economies into its first contraction in a decade, some economic experts are warning. Coronavirus is currently requiring companies to put on hold manufacturing in and shipments from China as officials attempt to restrict its spread. At the same time, the IMF claimed the spread of the coronavirus has actually erased assumptions of stronger financial growth this year. It will cause the 2020 worldwide economic gains to its slowest pace since the economic crisis in 2008.

With monetary markets uneasy, the United States Fed’s change of mind on decreasing interest rates is totally reasonable. The coronavirus risks have brought about a dramatic downturn in the stock market. It has fanned worries of financial tanking as the Republican president asks Americans for a second term. As it worries the US economy, the Canadian economy follows the same path.

The coronavirus will injure Canada’s economy. The rapid spread of the coronavirus is most likely to send the global economy right into a downturn, according to prominent Canadian economist David Rosenberg. Bank of Canada Governor Stephen Poloz said in his newest speech that coronavirus will certainly interrupt the global economy for at the very least the first half of this year. The half a point decrease of the Bank’s key rate target to 1.25 percent marked the initial cut since the summer of 2015 and brought the rate to its lowest level since early 2018.

On March 5, Prime Minister Justin Trudeau said a pavlovian response to the unique coronavirus will not keep Canadians safe. The federal government is attempting to stop an economic downturn from something they cannot manage; the coronavirus that’s going to affect the whole world’s economy. Financial experts think the Bank of Canada’s decision to reduce the target interest rate shows the coronavirus has revealed a pocket of weakness in the Canadian economy. Markets have actually withstood roller-coaster ups as well as downs for weeks amid unpredictability over how much damage the outbreak of the new coronavirus will do to the global economy.

New data on China suggests the damage coronavirus has actually wrought on the globe’s second-largest economic engine could be even worse and a lot more extended than previously anticipated. My fear is the Canadian reaction will be insufficient to mitigate the negative financial influence the coronavirus is having on worldwide financial markets. The best-case scenario is that the Bank of Canada’s emergency rate cut will prove to be an over-reaction from the policymakers.

The coronavirus is now beginning to have a devastating influence on world markets, manufacturing and supply chains. It will eventually impact the labour force. Investors are really hoping that policymakers will take crucial action to limit the pain. If reduced business causes layoffs in Canada and elsewhere, the economy will slow down even faster.

Coronavirus is damaging the international airline and hotel sectors as business and leisure trips are being cancelled. Economists are asking whether lowering interest rates is the correct way to counter the negative economic influence from the coronavirus. The SEC is concerned about what the effect will be on new issuers and investors.

Coronavirus may force the Alberta government to ditch a balanced-budget plan, said Premier Jason Kenney. In the United States, economists are urging the President to right away rescind all of his tariffs and also dedicate to markets and as trading partners that no brand-new tariffs will be applied at least until the economic damage from the coronavirus has passed. Markets will continue to be volatile until the coronavirus is brought under control. Canadians are really concerned that the coronavirus has the potential to erase the value of their retirement funds.

The coronavirus is negatively impacting supply chain systems causing failures to deliver. Companies might get some protection if the force majeure section of supply contracts mentions that an epidemic or disease is an event beyond the parties’ control. The coronavirus may fall within that interpretation. In all instances, company problems will take months to return to business as usual. So even if the coronavirus is contained quickly, it is likely to negatively affect the economy for some time.

Coronavirus has forced travelling constraints, allegations between governments and a collection of misguided xenophobic attacks in many countries. Relying on the degree of human and financial damage this virus brings upon around the world, coronavirus may someday be considered a vital turning point for the whole global economy.

Just a few examples of economic damage that the coronavirus has already brought about are:

  • postponement of the three-day Ultra electronic dance music festival in Miami
  • the release of the next James Bond film delayed from April to November 2020
  • IBM cancelling a major event
  • the NBA announcing it is seriously studying the situation and playing games in empty arenas is a possibility under consideration. The television contract is so lucrative and attracts such a wide audience, allows for empty stadium games to be a serious possibility
  • Cancellation of business and vacation travel

The concern of whether it is appropriate to cancel or alter travel plans due to the spread of the coronavirus is mainly an individual decision that travellers have to make after evaluating all the realities available. No matter, Canadian life and the economic climate will certainly be various for the foreseeable future.

Summary

I hope you have found this coronavirus risks discussion useful. If you have any questions please feel free to contact us at any time.

Do you or your company have excessive debt and looking for debt restructuring? Is your business in trouble because of the effects of coronavirus on the Canadian economy? Would not it be great if you could do a turn-around?

The Ira Smith Team understands how to do a debt restructuring. More notably, we comprehend the requirements of the business owner or the person who has too much individual debt. Because you are dealing with these stressful financial issues, you are anxious.

It is not your fault you can’t fix this problem on your own. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy. We can get you debt relief now.

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

We understand that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will get you or your business back on the roadway to healthy and balanced worry-free operations and end the pain points in your life, Starting Over, Starting Now.

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HELP WITH DEBT: WILL THIS NEW METHOD ACTUALLY WORK?

help with debt

Help with debt

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

Help with debt introduction

Many people need help with debt; especially credit card debt. They are stuck lugging around this debt. They only make the minimum monthly payment while a high rate of interest cost continues to accumulate. The net result is they never really make a dent in paying down the balance owing.

Canadian household help with debt

In March 2019, Equifax Canada reported that Canadian consumer debt delinquent accounts are increasing. Equifax also reported that the average Canadian household consumer debt is an average of $23,000, not counting mortgages. Bank of Canada Governor Stephen Poloz previously said that the typical Canadian owes about $1.70 for each dollar of income she or he earns each year, after taxes.

This, of course, is not a new story for Canadians. I have been writing about Canadians’ love affair with taking on more debt for several years now.

The Province of Quebec is trying to make a difference for help with debt

On November 15, 2017, Quebec’s Bill number 134, “An Act mainly to modernize rules relating to consumer credit and to regulate debt settlement service contracts, high-cost credit contracts and loyalty programs”, came into force. On August 1, 2019, certain aspects of this legislation, aimed at trying to curb credit card debt in Quebec, come into force.

Now in Quebec, brand-new charge card accounts opened up need the minimum monthly payment to be increased to 5% of the balance owing on those brand-new credit cards. For cards issued before August 1, 2019, cardholders will continue being required to pay a minimum of 2% of the outstanding balance. They have until 2025 to begin paying the new minimum of 5%. However, the minimum payment limit each month will be increased by half a percentage point annually after August 1, 2020, up until it gets to the five percent level.

Consumer advocates feel that other provinces will be viewing carefully what Quebec is doing. The Quebec government obviously believed that debt issues are an essential problem in Quebec that needed to be addressed.

Will this help with debt work?

Canadians have actually gone away from being a country of savers to a nation of borrowers. Therefore, if an unanticipated financial emergency hits, on average, Canadians do not have the resources to deal with it.

Many Canadians strung out on credit card debt need credit card debt help. A simple credit card debt calculator shows how problematic unpaid credit card debt is. Take a charge card with a balance owing of $1,000 with an annual 19.9% rate of interest and a two percent minimum monthly payment. It will take 26 years to pay off the balance. As well, it will cost $3,000 in interest. All this with an original balance of $1,000!

If the minimum monthly payment increases to 5%, that same credit card balance of $1,000 will take six years to pay off with $442 of interest. So you can see what the Province of Quebec is trying to achieve for its citizens.

The arithmetic of course works. However, the issue is not one of arithmetic. Better arithmetic won’t save Canadians who go into debt they cannot repay. If their budget does not allow them to pay more than a minimum of 2% each month, where will the extra money come from? Wage growth is stagnant and family expenses rise each year.

The Quebec government feels that having its people experience short-term pain for long-term gain will work.

As noble and well-intentioned this Quebec Bill 134 is, it does not appear that it has thought through what the real consequences will be. Will it help Quebeckers reduce their household debt faster? How will people who can only afford to pay a minimum monthly amount of 2% find the money to pay the higher amount. For Quebeckers in debt, it deserves asking if this sort of the change in policy will really help the people? Or, will it speed up the rate at which people in Quebec will have to make an insolvency filing, be it a consumer proposal or bankruptcy?

Has Quebec tackled the real help with debt issue?

High credit card debt is plainly a difficult situation for many. Time will tell exactly how effective a technique it is to raise the minimum monthly payment to 5% on a charge card will be. What Quebec is doing is a step in the right direction but it may not be one of the best high household debt solutions. But I am disappointed that it was not coupled with the requirement for better financial education and financial literacy.

In my opinion, it would have been much more impressive for Quebec to have at the same time developed simple online financial education tools for its citizens in trying to combat the problem of too much debt. What is really needed is to teach people that paying only the minimum monthly balance increases the cost of paying off the balance. Ideally, people need to adjust their household budget to be able to pay the full balance off every month.

Help with debt: Financial education was never on any curriculum

For many Canadians, proper money management and budgeting had not been a large subject in their house growing up. They get to college or university and they obtain that bank card. They just start spending and perhaps they also have student financial debt. They graduate and may or may not get a well-paying job to start off their new career. Then life takes place and living costs increase. Perhaps now a home with a home mortgage, children, automobile loan repayments and all other living costs take hold. Due to stagnant wage growth, or worse, corporate downsizing, there is not enough income in the family to keep up with all these debts. Now all you can do is make minimum payments.

To avoid this mess in the first place, people need to be taught basic budgeting skills. People need to understand that a household cannot spend more money than is earned, after income tax. This is the most basic concept for those in need of help with debt. The concept of having emergency savings funds is also necessary. People need to understand how fast credit card debt can grow and how hard it is to pay it off if the most you are able to pay is the minimum monthly payment.

Money management education and learning are so vital. People need to know that when they purchase things on a credit card, they do really need to have the money available to pay off that credit card at the end of the month. A credit card, unfortunately, is treated by many as an extra source of cash. In reality, it is a financial tool for convenience, but not an additional source of income.

Do you have too much debt?

Do you feel that you don’t have sufficient financial literacy? Do you believe that the lack of knowledge has led to you making financial mistakes? Have these mistakes caused you to now have too much debt? Is the pain and stress of too much debt now negatively affecting your health? Do you need help with debt?

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 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.

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

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.

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CONSUMER PROPOSAL ONTARIO: AMAZING GOVERNMENT PLAN TO REDUCE CONSUMER DEBT

 


Consumer proposal Ontario: Introduction

I am finding that more people are calling me to ask about a consumer proposal Ontario. This is a Canadian federal government authorized program for people to lower their consumer debt.

What is triggering the boost in these queries?

Consumer proposal Ontario: New Ipsos Canadian consumer debt survey

A brand-new study by Ipsos might assist. It paints an unpleasant scene of just how much debt some Canadians are holding on to. Of those asked 31% claim they do not make an adequate amount to pay their costs monthly. More state they are having a hard time to merely to survive. Ontario residents in this predicament are candidates for consumer proposal Ontario.

The study discovers many people are sorry for the sort of spending they’ve done to find themselves with such debt. Peoples’ incomes aren’t maintaining pace with the increase in their costs. I am not just talking about extras; I am also talking about the basics of life such as food and shelter.

Consumer proposal Ontario: Bank of Canada benchmark interest rate hike

At the very same time, on October 24, 2018, Stephen Poloz, the Governor of the Bank of Canada (BOC) announced the Bank of Canada interest rate hike by a quarter-point to 1.75%. This increases the cost of borrowing for Canadians. This is the 5th bump since the summertime of 2017.

The Bank of Canada states that the Canadian economic situation remains running near capacity and is reasonably broad-based. The rising cost of living is close to target so what stands apart is that the current rate at 1.75% is still negative in actual terms adjusting for inflation.

Since the old Free Trade Agreement, the new USMCA appears to be resolved, several think with this 800-pound gorilla out of the room, it’s most likely to unlock the Bank of Canada’s ability to continue with rate hikes.

Consumer proposal Ontario: How will higher interest rates affect you?

If you stay in a variable price home mortgage or credit line, your rate of interest has risen. What that indicates for your capital is that your month-to-month repayment has actually risen. If your home mortgage is half a million bucks, your month-to-month repayment has actually increased by sixty-five dollars.

It does not feel like a great deal. Nevertheless, if your loan(s) rate of interest rises during the rest of the year and right into 2019, that will certainly maintain raising your repayments.

It isn’t simply your variable price home mortgage. Canadians additionally lug debt with credit lines, automobile financings as well as bank cards. Each rate of interest rise will certainly increase the price of borrowing on those variable price financings.

The raised repayments will certainly maintain consumption in your capital. So for those battling to make ends meet, rates of interest boosts will just make life harder. A consumer proposal Ontario won’t help with secured debt, but it will help eliminate unsecured debt

Consumer proposal Ontario: Higher interest costs lead to belt-tightening

To regulate debt, Canadians need to be aggressive with their budgeting. Individuals need to take ways to boost their monetary scenario, such as:

When talking to a LIT, ask about how a consumer proposal Ontario can help you.

Consumer proposal Ontario: Nonetheless, many Canadians are still seeking help

Many Canadians continue to be haunted by debt. They experience remorse towards their existing and future debt scenario. Fifty percent are not certain that they will not have any kind of debt in retired life, while 44% are not certain they will have the ability to cover all living expenditures in the next year, without taking on additional debt.

Some Canadians are thinking about bankruptcy. Their first step must be to go to a Trustee. A Trustee is an expert that is certified by the Office of the Superintendent of Bankruptcy Canada (OSB). The OSB is the government organization that controls the insolvency system in Canada.

Consumer proposal Ontario: A government-approved strategy to end consumer debt

To most of our potential clients’ shock, I have told many that bankruptcy might not be essential for them. Sometimes I suggest that it is possible to remove their debt via a government-approved strategy to decrease consumer debt called a consumer proposal Ontario.

Your government authorized debt settlement program is an offer made to your creditors. The offer is to repay only a percentage of what you owe, over a duration of no more than 5 years.ira smith trustee

Consumer proposal Ontario: The benefits to you

There are benefits for you to file such a debt settlement plan. First, you keep your assets. Next off, an approved proposal binds all creditors to the arrangement.

We begin with having the individual complete the standard intake form that we call, the Debt Relief Worksheet. When totally filled in, it gives us a listing of the individual’s assets as well as what they owe. It additionally aids them to budget their income and expenses. Utilizing that info, I am able to formulate a proposal based on your capacity to pay.

The proposal is submitted to the OSB. Once submitted, you can quit paying your unsecured creditors. If creditors are garnishing your income or suing you, those activities are stopped. As soon as the proper documents are submitted with the OSB, I then send out the proposal to every one of your creditors.

The creditors then have 45 days to approve or decline the deal. If creditors are unhappy with the proposal, as the Trustee I can work out changes such as greater payments. However, it all is based on what you can still manage to safely pay.

I tell people that if the proposal is turned down, the individual will certainly need to consider various other alternatives to resolve their monetary troubles. This might include bankruptcy.

Once we get approval, you are then in charge of making routine payments to the LIT as the proposal administrator. The LIT will certainly use that cash to pay your creditors.

As part of the consumer proposal process, you will need to go to 2 counseling sessions in the LIT’s office. This will aid you to get back on your feet monetarily. If you fully complete your plan, you will certainly be legitimately released from your unsecured financial obligations.

Consumer proposal Ontario: There are 2 consumer proposal FAQs everybody asks me

What this affect my credit score?

Yes, it will certainly be influenced, I tell every person. Once the regards to the proposal are fulfilled, people can begin reconstructing their credit history and their economic future.

Just how much does it cost?

The cost is established by the Federal government. How much an individual pays in for an effective consumer proposal is totally unrelated to the allowable government authorized to charge. The Trustee earns the fee from the amount you pay into your debt settlement restructuring plan. So, that means, the cost is FREE!

Consumer proposal Ontario: That freedom feeling

Our clients who complete their consumer proposal are so pleased to get that letter from us enclosing their Certificate of Full Performance. That is the document that confirms they have become debt-free.

The Ira Smith Team has years of experience of negotiating with creditors for debtors. If you owe less than $250,000, other than for any mortgages against your home, you can enter into a consumer proposal debt settlement plan. If you owe more or are a corporation, we can still negotiate with your creditors and restructure you with a restructuring proposal debt settlement plan.

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.consumer proposal ontario

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CANADIAN INTEREST RATE HIKE POSSIBLY SCARIER THAN HALLOWEEN

canadian interest rate hikeCanadian interest rate hike: Introduction

Does Bank of Canada chief Stephen Poloz anticipate good times generally in the Canadian economic climate to continue or is the marketplace an indicator of a problem in advance? The most recent Bank of Canada interest rate announcement was a Canadian interest rate hike boosting its benchmark rate by 25 basis points to 1.75%.

This is the 5th rise given since July 2017. All indicators show the Bank of Canada rate will boost right into 2019.

Canadian interest rate hike: The tale of two economies

There are presently 2 stories about the Canadian economy. The initial one is that the economic climate is doing well. Sufficiently so that we require to be increasing rates of interest. Mr. Poloz thinks there is a requirement to be tightening up that a bit.

At the exact same time, the second one, the other story, points to an economy that isn’t so great. The marketplace has recently made the case for pessimism. That story is that:

  • we’re at the actual end of a long great financial run;
  • a trade battle with China is the precursor of tough times ahead, and
  • investors are frightened that this can be the time that things start to turn down.

Canadian interest rate hike: What does it mean for you?

There’s a great deal of discussion regarding what that indicates specifically for Canadians. It isn’t that the cautions have not been there for a while. The Bank of Canada records that the typical Canadian household debt is around 170 percent of disposable earnings. The ordinary Canadian owes $1.70 for every single dollar of revenue earned each year, after tax.

Twenty years ago, the ratio was at 100%. So as you can see, there has been a steady climb since the 1990’s in Canadians appetite for more debt.

We have among the highest debt proportion of any of the Organisation for Economic Co-operation and Development participant nations. The concern is have we started to learn the message?

Initially, former Bank of Canada Governor Mark Carney and the former Federal Finance Minister, the late Jim Flaherty desired the Canadian consumer to place the economy on their back and march it up this lengthy high hillside. We did and it worked. Nonetheless, this is the result of it.

Currently, we start to see some indicators that the Canadian consumer is thinking of their budgeting. Stats Canada is reporting that retail sales have actually started to see a slowing down. Individuals are thinking of just how their variable priced loans are costing them more.

The sensible people will certainly begin restricting their purchases to just their needs and not give in to their wants. All this to attempt to maintain their debt in check. Rates of interest are rising so debt costs are going up and will set you back even more. Individuals will certainly concentrate on the requirement to bring costs as well as debt under control. This will lead to a cooling off in the Canadian economy.

Canadian interest rate hike: The US situation

I anticipate the very same practices will certainly happen in the United States. President Trump is already disturbed that the United States central banker Jay Powell is currently raising interest rates. However, Trump is disturbed that elevating rates will certainly tinker negatively with the US dollar. It could also slow down the US economy. If that happens, Donald Trump’s fears his worst nightmare. He won’t be able to truthfully boast how well the US economy is doing under his administration. There have been times already where he’s been plainly irritated the economy is refraining from doing what he wants of it. Mind you, to date, he has not let the truth get in the way of a good boast!

So climbing rates of interest will certainly have a result on the North American economic situation and the marketplaces. Whether interest rate hikes will be scarier than Halloween, only time will tell.

Canadian interest rate hike: Are you uneasy about your household debt?

Do you feel rising debt costs will put you and your family in peril? Do you need budgeting help? Are you already experiencing financial difficulties? If you answered yes to just one of these questions, you need a professional trustee. If yes, call the Ira Smith Team. 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 front door.

We always offer a free consultation. We listen to your issues and provide you with a full range of realistic options to help you get out of debt. There have been numerous times where thinking about all the Canadian debt solutions available, we have advised debtors that they do not need an insolvency process. Rather, maybe they can avoid it by implementing an informal process. If that is your case that if fine with us; finding the best solution for YOU is just the right thing to do to help you achieve total debt freedom.

The earlier you contact us, the more options we will have to implement. Whether it is a corporate restructuring or personal debt settlement through a consumer proposal, the goal is to avoid bankruptcy. However, if bankruptcy turns out to be the best option, we can assist there too.

You’re simply one phone call away from taking the necessary steps to get back to leading a healthy, balanced hassle-free life, ending the pain and stress you are feeling forever. Call Ira Smith Trustee & Receiver Inc. today for your free consultation.ira smith trustee

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INTEREST RATES CANADA 2017: HOW TO REDUCE DEBT WITH EVERY GOVERNOR STEPHEN POLOZ SPEECH

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Interest rates Canada 2017: Introduction

Canada, the United States and much of the globe has remained in an extended period of reduced rates of interest. But the Bank of Canada, led by Governor Stephen Poloz and the US Federal Reserve, led by Janet L. Yellen as Chair of the Board of Governors of the Federal Reserve System, are the independent bodies in Canada and the US, respectively, that set base rate targets for the financial markets. They have now begun to slowly raise interest rates, so interest rates Canada 2017 are on the rise.

Interest rates Canada 2017: They are on the rise

On July 12, 2017, Governor Stephen Poloz announced the benchmark interest rate increase to 0.75 per cent from 0.5 per cent. Most economists expect that rates will continue to climb at least one more time before the end of the year.

Changing interest rates can impact our ability to service our debt on variable rate or prime based interest rate loans. One way to keep our debt load under control is to adjust our spending and saving behavior to pay down debt appropriately.

Interest rates Canada 2017: They are on the rise – so how much debt should I try to pay off?

When the Bank of Canada signals a rise in its benchmark rate, or a Governor Stephen Poloz speech on interest rates signalling an increase, the Canadian banks then raise:

  • its prime rate of interest;
  • the interest rate on variable rate loan products;
  • the interest rate on loans based off the prime rate;and
  • the interest rate on fixed rate loan products such as mortgages.

When those interest rates rise, we should try to look at paying down some debt so that our total cost of borrowing does not increase. We try to figure out how much debt to pay down by using the following formula:

New Debt Balance = Annual interest expense from older interest rate divided by the new interest expense of the new rate

We use the annual rate of interest of our portfolio before the rate hike due to the fact that we understand that’s what we could currently manage to pay every year. Simply take the weighted average of all the various rates of interest that we’re paying, and separate it by the complete amount of debt we have.

$ 100,000 x 3% = $3,000

Using the example above we understand the annual interest expense I was originally paying was $3,000. So, we could use the formula to figure out how much debt I ought to be reducing to maintain my capacity to service my obligations.

Annual previous interest cost/ the new expense (%) of borrowing = New Debt Balance

$ 3,000/ 3.25% = $92,308

This implies that to keep paying $3,000 a year in interest, I must have a debt balance that’s around $92,300. Because I in fact have $100,000 of debt I have to make some difficult choices.3bestaward

Interest rates Canada 2017: They are on the rise – so it is now decision time

I could either pay down my debt by $7,692 ($100,000 – $92,308), or accept paying more interest each year as well as make my regular monthly payments. The first alternative implies I will need to sacrifice personal costs to conserve more to pay down my debt. The second choice enables me to spend even more now, however will cost me an extra $250 yearly (in this example, 0.25% x $100,000) that I’m providing to the bank with nothing in return.

It really depends on what the purpose of borrowing in the first place was. Debt to pay for consumer purchases, you would want to try to reduce the debt as quickly as possible.

When you incur debt for investment purposes, then you might prefer to pay a little more tax deductible interest. If a stock’s price typically follows earnings, and earnings will grow, then the stock price should eventually grow as well.

The rate of interest we pay is simply one reason. Changes to our income, financial investment income, household scenarios, place, as well as situations around tax obligations all comes into play when making a choice about debt.

Interest rates Canada 2017: The effect of higher interest rates on the economy

Higher interest rates end up causing a slower economic climate. As people rush to pay for debt or spend more cash to service their present financial debts they must spend much less on consumer goods. Every person should set up a financial portrait that captures their scenario precisely so they can plan for further interest rates in the following 12 months.

Interest rates Canada 2017: What should you do if you have too much debt?

I hope that you have found this vlog helpful. If you’re looking for ways to end your financial debt call Ira Smith Trustee & Receiver Inc. Our strategy for every single person is to develop a result where Starting Over, Starting Now comes true, starting the minute you stroll in the door. You’re just one call away from taking the necessary actions to get back on the road to leading a healthy and stress free life.interest rates canada 2017 10

Call a Trustee Now!