Tag: student debt

CONSOLIDATION LOANS IN CANADA: IS IT POSSIBLE TO CONSOLIDATE DEBT BY USING THIS 1 SIMPLE GOING POSTAL HACK?

Post author By Brandon Smith
Post date October 17, 2022

Debt consolidation loans in Canada

Debt consolidation loans in Canada can be an excellent means to conserve money and get your funds in order. By combining several financial obligations into an affordable single loan, you can frequently get a lower rate of interest and also reduced month-to-month payments. This can assist you to get out of debt quicker as well as save cash over time.

Prior to getting debt consolidation loans in Canada, it is very important to understand the terms of the financing and also to make sure you can afford the monthly payments. It’s also a good idea to look around and compare rates of interest and also loan terms from various financial institutions.

In this Brandon’s Blog, I discuss the concept of debt consolidation loans in Canada and a sort of new potential lender offering personal loans in Canada. I will also share another debt settlement and debt consolidation option that may be beneficial for people and companies who want to repair their financial situation.

Advantages as well as downsides of consolidation loans in Canada

Upsides

Debt consolidation loans in Canada can offer many benefits over making regular monthly payments on many different loans and debts with different interest rates. Interest rates on some debts, like credit card debt, can be categorized as high-interest debts, making it difficult to make a dent in the balance owing. if all you ever do is make the monthly minimum payment.

Consolidation loans supply a number of advantages, such as:

Reduced interest rates – Lenders normally give consumers reduced rates of interest on individual personal loans allowing them to repay their high-interest-rate credit card debt. Consolidation loans in Canada can be an excellent method to obtain a lower rate of interest and come to be debt-free quicker.

Reduce your monthly payments – Banks and credit unions usually offer debt consolidation loans in Canada with terms of up to 5 years. This, along with the lower interest rate, can help you save a lot of money in the long run and give you a lower monthly payment than the sum of the monthly payments required under your many debts.

A single payment instead of multiple payments – One of the best things about debt consolidation loans in Canada is that you only have to make one monthly payment. This makes it much easier to budget and stick to your plan. Instead of having to remember to pay six different bills each month, you only have to worry about one.

Potentially improved credit scores – Your credit report is a number that banks make use of to determine your creditworthiness. A high credit rating suggests you are a low-risk borrower, which is excellent. A bad credit rating indicates you are high-risk, which is bad.

By obtaining a debt consolidation loan, making on-time payments and paying it off on time without a payment schedule default or late payments, you are restoring your bad credit score in 2 ways. First, you have revealed that you had the ability to fully settle all of your other financial debts. Second, you are repairing your credit score by making the consolidation loan payments on time. It is not instant, yet in time, paying off debt consolidation loans in Canada will certainly improve your credit rating. Over time, you will see your credit score and credit report improve.

Downsides

There are a few downsides to debt consolidation loans in Canada, including:

Debt consolidation loans in Canada are often referred to as “easy money.” But they aren’t always easy. Even though many consumers think they qualify for a loan based solely on their disposable income, there are certain circumstances where Canadian banks will not see your monthly income in as good a light as you do. You will need collateral such as real estate, cars, boats, etc.

If you do not have these things, you may be at a disadvantage. Most banks will not lend money to someone with a low credit score unless they have some form of security, such as a car or house with enough equity. This makes sense because the lender knows that it is a debt consolidation loan you are applying for and by definition, you cannot pay off your credit card balances without their loan. They will want to protect themselves against the chance you may default on the loan.

When choosing a bank, you’ll want to compare fees, interest rates and prepayment penalties to ensure you’re getting the best deal. Keep in mind that the lowest fees don’t always mean the best overall value, so be sure to compare all aspects of the loan before making a decision. You might even consider getting one of the types of secured loans by raising money against your home through a home equity line of credit or a second mortgage. So compare your offers of secured loans and unsecured debt consolidation loans in Canada very carefully to consider all factors in deciding which is best for you.

WARNING: Stay away from private lenders, payday lenders and most alternative lenders who may provide loans just as expensive as payday loans. Their fees and high-interest loans will never be in your favour.

Consolidation loans in Canada: Can you consolidate student loan debt?

Students and recent graduates who find themselves buried under student loan debt often look for help. They want to consolidate their debts into one manageable monthly payment, but this can be difficult to obtain because there are few debt consolidation loans specifically designed for them.

Many recent graduates lack the credit history or income to qualify for a consolidation loan. They also generally do not have any free assets to qualify for a single secured debt consolidation loan to pay out over a longer period of time at a lower interest rate.

Unsecured loans to young people with a little credit history will be more expensive than one to an individual with a long-established credit history. That assumes that they can even qualify for this type of loan.

For these reasons, other than perhaps for a recent graduate from either medicine or dentistry who perhaps can roll their student debt into a professional loan, it will be very difficult to get consolidation loans in Canada to consolidate student debt.

Consolidation loans in Canada: Can going postal help you reach your financial goals?

Here is a potential new source for debt consolidation loans in Canada. Although it was not set up specifically for consolidation loans, there is no reason why you cannot use the money for that purpose if you are approved.

There is a new loan program offered by Canada Post which is designed to help people who are struggling financially, especially in rural areas where access to banking institutions is limited. It is called the Canada Post MyMoney™ Loan product. The idea is that you get a loan that’s based on how much you can afford to pay back, what you need the money for, and how likely you are to repay it.

The initiative is part of Canada Post’s commitment to helping Canadians manage their finances better. Their goal is to provide easy access to financial services and products that can help people save time and money.

To have your loan application considered, you have to be either a Canadian citizen or a Permanent Resident. You must be no younger than 18 years of age and you need to have annual earnings of a minimum of $1,000. Additionally, you need to not have been bankrupt within the 2 years before applying for the loan or had any of your financial debts handed off to a collection agency within the year before applying. They will of course also do a credit check on you.

In order to receive your loan proceeds, you must have a chequing or interest-bearing account with a Canadian financial institution in your own name. Borrowers of MyMoney™ loans are not required to offer any security against assets, in contrast to secured loans from banks and credit unions. Instead, applicants need only provide proof of identity, employment history and income. Both variable and fixed-rate installment loans are offered. The actual lender is TD Bank.

Consolidation loans in Canada: Other financial debt loan consolidation choices

You may not want to take on more debt to pay off your current debt. I don’t blame you and I get it. Or you may have been denied a debt consolidation loan. Here are some other options for consolidating your debt:

Balance Transfer Credit Cards

A balance transfer is simply when you move the balance of one credit card over to another credit card. For example, if you have a balance of $5,000 on your Mastercard, you can transfer that balance to a new Visa account that offers you 0% interest for 1 year on all balance transfers.

When you switch, you won’t have to pay interest charges for 12 months. After that, you’ll need to pay off the balance in full or start making payments on the balance transferred. Of course, you’ll still accrue interest after the interest-free period on the remaining balance.

Consolidation loans in Canada: Credit counselling

Credit counselling is a service that helps individuals to manage their finances and improve their financial situation. It can be done with a range of techniques, including budgeting, negotiating with creditors, setting up a plan to repay debt and monitoring actual behaviour vs. the plan.

Credit counselling can be an excellent way for individuals to take control of their financial obligations. It can help them create a plan to settle their debt, and provide them with the tools and knowledge they need to maintain financial literacy in the future.

There are many different credit counselling services available to choose from. You should select a community-based service to avoid being charged any fees. Be sure to stay away from any counselling service that charges fees, as this will only add to your expenses when trying to reduce debt.

Consolidation loans in Canada: Debt help is available with a financial restructuring program

Financial restructuring is a complicated and difficult procedure, however, it likewise provides individuals as well as businesses with a new beginning and a brand-new lease on life. Selecting to reorganize your finances with the help of a licensed insolvency trustee will certainly have temporary challenges, but can ultimately provide you with financial relief and a fresh start.

If you are considering financial restructuring, we urge you to consult with a licensed insolvency trustee to discuss your options. We can help you understand all of your options and work with you to develop a plan that is in your best interests.

Trustees are experienced in all aspects of financial restructuring and can supply you with the information and assistance you require to make the very best decision for your situation.

The most well-known financial restructuring tool for individuals is the consumer proposal. For mid-size companies and individuals with larger debt, it is a Division I proposal. For companies with debts greater than $5 million, restructuring is accomplished through the use of the Companies’ Creditors Arrangement Act.

Here is the best part. You should consider financial restructuring as getting an interest-free loan to pay off all your debts for a fraction of what you owe. I am qualified and experienced in all forms of financial restructuring, can explain this concept to you and am always available to answer any of your questions.

Consolidation loans in Canada: Before making a decision on your financial life needs – Call me

I hope that you found this consolidation loans in Canada Brandon’s Blog informative. If you’re sick and tired of carrying the burden of debt and ready to live a much better life, we can assist. We know exactly how it really feels to be in debt as well as feel like you’re never going to get ahead. We have actually helped lots of people and businesses that were in your position reach financial stability, so we understand it’s feasible for you to prosper in your objective of ending up being debt-free. Nevertheless, it will certainly require some work on your part. We’ll be right here to assist you with every action necessary.

The financial restructuring process is complex. The Ira Smith Team understands how to do a complex restructuring. However, more importantly, we understand the needs of the entrepreneur or the person who has too many personal unsecured debts, Credit card debt, income tax debt liability, unsecured loans or personal obligations from the running of your company or from being a business owner. These are all types of debt we can help you eliminate. We are aware of your financial difficulties and understand your concerns. Filing bankruptcy is the last option we explore only after we have exhausted all other options to avoid bankruptcy, such as financial restructuring through a debt repayment plan.

It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to give you the best management advice to get you out of your outstanding debt troubles while avoiding bankruptcy. We can get you debt relief freedom.

The stress placed upon you is huge. We understand your pain points. We are sympathetic to the financial difficulties you are experiencing and would like to help alleviate your concerns. We want to lighten your load by coming up with a debt settlement plan crafted just for you.

We realize that people and businesses in financial difficulty need practical advice and a workable solution in an easy-to-understand financial plan. The Ira Smith Team knows that not everyone has to file for bankruptcy in Canada. Most of our clients never do, as we are familiar with alternatives to bankruptcy. We assist many people in finding the relief they need.

Call or email us. We would be happy to give you a no-cost initial consultation. We can find you the perfect solution to tailor a new debt restructuring procedure specifically for you, based on your unique economic situation and needs. We provide a full range of services to people and companies. If any of this sounds familiar to you and you’re serious about finding a solution, let us know. We will get you back to living a happy life, whether or not there is an economic recession in Canada.

Call us now for a no-cost initial consultation. We are licensed professionals.

Brandon Blog Post

FILE FOR BANKRUPTCY: CAN YOU FILE FOR BANKRUPTCY CANADA FROM THE LUXURIOUS CARIBBEAN?

Post author By Brandon Smith
Post date February 22, 2021

We hope that you and your family are safe, healthy and secure during this coronavirus pandemic.

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

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

File for bankruptcy introduction

You have all probably read about or heard about the Ontario judge who presided over Toronto-area court cases from the Caribbean. With today’s technology, it is electronically possible to attend Zoom court from anywhere in the world. That got me thinking. Can a Canadian file for bankruptcy from the Caribbean or anywhere else in the world?

So I did the research. In my opinion, using what is right now permissible technology, I think it is possible for a licensed insolvency trustee to either accept a Canadian filing bankruptcy or make it happen from the luxurious Caribbean or anywhere else outside of Canada. In this Brandon Blog, I will explain the bankruptcy process and why I think a person or company can file for bankruptcy from outside Canada.

You owe money: Considering bankruptcy?

To file for bankruptcy is a difficult decision to make, especially considering the financial and personal consequences it has on you and your family. But sometimes, there is no other option. If you find yourself unable to pay your debts, filing for bankruptcy may be your best bet for a fresh financial start. But before you decide to file for bankruptcy, you must assess your situation and understand the consequences.

It’s easy to be overwhelmed when you’re facing the prospect of filing for bankruptcy. Bankruptcy is a complicated legal proceeding, and the law has established procedures that must be followed in a specific order. If you’re considering bankruptcy, it’s important that you understand how the process works and the critical role a licensed insolvency trustee (formerly called either a trustee in bankruptcy or a bankruptcy trustee (Trustee) plays in that process.

As a Trustee, I can tell you that bankruptcy is a serious undertaking. It can have a big impact on you financially and emotionally, and there are many important decisions you must make before, during, and after the process. The decisions you make now will have a big impact on your future. As a Trustee, I always first try to help people and companies look at the alternatives to bankruptcy in order to avoid bankruptcy, rather than file for bankruptcy. Personal bankruptcy or business bankruptcies are truly a last resort when there is no other choice.

How to file for bankruptcy Canada: Let the licensed insolvency trustee no-cost consultation happen first

You may be considering filing for bankruptcy in Canada because you have debts that you can no longer pay. If you are drowning in debt, you might feel like there is no way out. But bankruptcy isn’t the end of the world. In fact, it can help many people get a fresh start by eliminating debts they can no longer pay. But as I always say, an individual or company may not need to file for bankruptcy. You have to consider all of your options. But in this section, we will focus on the bankruptcy filing process.

It all starts with you going to see a Trustee for a free, no-obligation initial consultation. The Trustee will listen to the facts you describe and ask you some questions to gain a better and deeper understanding of your specific situation. The Trustee will then tell you about the various debt relief options he or she believes are available to you. The Trustee will then provide you with his or her recommendation as to what is best for your situation and why.

Many factors will play into the Trustee’s recommendations, especially around your debt issues, including:

The types of debts.
Your unsecured debt vs. secured debts.
Do you have any student debt and if so, when did you graduate from the program that you acquired the student loan debt for?
The total amount of your Canadian debts and any foreign debt you may have.
Is Canada Revenue Agency hounding you for tax debt?
How appropriate are all the various debt options for your situation?
What percentage of debts are related to your assets that you cannot afford to lose.
What is the nature and extent of all of your assets?
Which assets are exempt from seizure and which are non-exempt?
Do you have any joint (co-signed) debt and how will your insolvency filing affect the other person?
Is the pressure from debt you are feeling right now require an immediate filing or could you wait a bit to see how some things play out over the short-term future?
Do you need immediate protection from debt and the related creditors or debt collectors taking collection actions right now such as trying to enforce against your assets, sue you or garnish your wages under a judgement?
How is your burden of debt currently affecting you and your family?
Comparing your current debt situation pre-filing to what your debt after filing and after your discharge will look like under each of the available alternatives.
How does the Trustee’s debt assessment factor into the realistic alternatives available to you to avoid bankruptcy?
Does your debt level at this stage that of overwhelming debts or are you right now only feeling mild indigestion? Perhaps you could work out of your debt problems on your own with just one or two strategies the Trustee will share with you at the no-cost consultation stage.

The Trustee considers all of this to see if you have an unmanageable debt to determine the best options available to you, including having you file for bankruptcy. You don’t want to do a consumer bankruptcy filing for yourself or have your company filing bankruptcy if it is not necessary to fix the debt problems.

How to file for bankruptcy – How the bankruptcy process starts

Alright, now for getting to answering the question I posed in the title and at the beginning of this Brandon Blog. Can a Canadian file for bankruptcy from the luxurious Caribbean? Can Canadian bankruptcy filings start from outside of Canada? To answer this question, we must look at what are the requirements of both the debtor, be it a person or company, and the Trustee, for a bankruptcy file to begin? All of my comments below, with appropriate amendments for context, will apply to:

an individual filing a debt settlement consumer proposal;
a person filing for personal bankruptcy;
either a person or a company filing a debt settlement financial restructuring proposal under Part III Division I of the Bankruptcy and Insolvency Act (Canada) (BIA); or
a company filing an assignment in bankruptcy.

Before the COVID-19 pandemic, the debtor and Trustee met in-person at the Trustee’s office in order for the Trustee to assess the debtor’s financial situation. If an insolvency process was required to help fix the debtor’s financial problems, then there was also an in-person meeting at the Trustee’s office to sign up the filing documents. Since the pandemic began, the Office of the Superintendent of Bankruptcy Canada (OSB) Messages to LITs concerning COVID-19 gave Trustees the authority to hold meetings by video conference. This is how the whole world has been operating for almost 1 year now. So this is how the insolvency process begins.

In addition to the initial consultation and signup. other meetings are also held via video meetings. Examples are a Meeting of Creditors and the two credit counselling sessions. Although the OSB’s guidance does say that Trustees can use methods other than in-person…..” for those areas where they have an approved resident or non-resident office…” keep in mind that a Trustee is licensed to act within an entire province! I won’t get into the semantics of the apparent conflict between the OSB’s guidance and its licensing approval process in this Brandon Blog.

Who can file for bankruptcy?

Any insolvent person can file for bankruptcy. Section 2 of the BIA defines an insolvent person as:

“insolvent person means a person who is not bankrupt and who resides, carries on business or has property in Canada, whose liabilities to creditors provable as claims under this Act amount to one thousand dollars, and

(a) who is for any reason unable to meet his obligations as they generally become due,
(b) who has ceased paying his current obligations in the ordinary course of business as they generally become due, or
(c) the aggregate of whose property is not, at a fair valuation, sufficient, or, if disposed of at a fairly conducted sale under legal process, would not be sufficient to enable payment of all his obligations, due and accruing due;”
So to file for bankruptcy, amongst other requirements, the person or company must reside, carry on business or have property in Canada.

The locality of the debtor

Once all the documents are signed up to file for bankruptcy, the Trustee has to file them with the OSB in the “locality of the debtor“. Section 2 of the BIA defines “locality of the debtor” as:

“locality of a debtor means the principal place

(a) where the debtor has carried on business during the year immediately preceding the date of the initial bankruptcy event,

(b) where the debtor has resided during the year immediately preceding the date of the initial bankruptcy event, or

(c) in cases not coming within paragraph (a) or (b), where the greater portion of the property of the debtor is situated;”

If the debtor has been living in the Caribbean for 4 months immediately preceding the date of the filing of the assignment in bankruptcy, do they qualify? The answer is yes. Court decisions have determined that the word “during” means “at some time” during the year preceding the date of bankruptcy. It does not mean continuously. So during these pandemic days where we meet with everyone online, it is possible for the Canadian person to be in the Caribbean, meet with the Trustee for the initial consultation, decide on an insolvency process, in this case, bankruptcy and then initiate the bankruptcy proceedings, all from the luxury of a Caribbean vacation spot.

Let’s not delve into how a debtor who needs to file for bankruptcy can afford to live in the Caribbean or whose villa it is. That is beyond the scope of this Brandon Blog.

What about the Trustee?

The same way the debtor, or a judge, can transact business by video meeting from outside Canada, the same is true for the Trustee. As long as the Trustee can access all his or her office documents and systems online from outside of the office, there is no reason why the Trustee could not operate from the Caribbean as well to handle the person or company that wants to file for bankruptcy.

I am not advocating for this position, especially when you consider both the danger of and the appropriateness of travelling during these times of hardship and sacrifice. But since the question was “Can a Canadian file for bankruptcy from the Caribbean or anywhere else in the world?”, the answer is YES.

So whether you are a judge in the Ontario court, an insolvent debtor or a Trustee, I do not see any legal reason why someone could not file for bankruptcy from the Caribbean or anywhere else in the world.

File for bankruptcy summary

I hope you enjoyed the file for bankruptcy Brandon Blog post. If you are concerned because you or your business are dealing with substantial debt challenges and you assume bankruptcy is your only option, call me. It is not your fault that you remain in this way. You have actually been only shown the old ways to try to deal with financial issues. These old ways do not work anymore.

The Ira Smith Team utilizes new modern-day ways to get you out of your debt difficulties while avoiding bankruptcy. We can get you the relief you need and so deserve.

The tension put upon you is big. We know your discomfort factors. We will check out your entire situation and design a new approach that is as unique as you and your problems; financial and emotional. We will take the weight off of your shoulders and blow away the dark cloud hanging over you. We will design a debt settlement strategy for you. We know that we can help you now.

We understand that people and businesses facing financial issues need a realistic lifeline. There is no “one solution fits all” method with the Ira Smith Team. Not everyone has to file bankruptcy in Canada. The majority of our clients never do. We help many people and companies stay clear of bankruptcy.

That is why we can establish a new restructuring procedure for paying down debt that will be built just for you. It will be as one-of-a-kind as the economic issues and discomfort you are encountering. If any one of these seems familiar to you and you are serious about getting the solution you need, contact the Ira Smith Trustee & Receiver Inc. group today.

Call us now for a no-cost consultation.

We will get you or your business back up driving to healthy and balanced trouble-free operations and get rid of the discomfort factors in your life, Starting Over, Starting Now.

We hope that you and your family are safe, healthy and secure during this coronavirus pandemic.

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

Tags avoid bankruptcy, Bankruptcy, Bankruptcy and Insolvency Act, Consumer Proposal, debt assessment, debt collectors, debts, file for bankruptcy, filing bankruptcy, insolvency, insolvent person, Ira Smith Trustee, licensed insolvency trustee, locality of the debtor, Office of the Superintendent of Bankruptcy Canada, student debt, Toronto-area court cases, unsecured debt

Brandon Blog Post

TORONTO CREDIT COUNSELING: OUR GUIDE TO GOING INTO RETIREMENT DEBT FREE

Post author By Brandon Smith
Post date August 28, 2017

Toronto Credit Counseling: Introduction

It appears that a high percentage of families in the GTA are in need of Toronto credit counseling. This week’s blog highlights why people are now carrying debt into retirement. By having this information, we hope that you will be able to easily prepare your own comprehensive guide to going into retirement debt free.

Toronto Credit Counseling: Household debt at an all-time high

With household debt at an all-time high and continuing to break records, it’s hard to find families not dealing with debt. But, have you considered how your debt load may impact your children’s futures? As parents I’m sure you want to give your children every advantage in life. This includes a college or university education.

Unfortunately it’s impossible to give your kids a post secondary education if you have a debt load to contend with. The reality is that student debt is directly tied to parents dealing with debt. So, ultimately your children may pay the price for your debt load. Believe it or not, they may even have debt carry into retirement.

Toronto Credit Counseling: Carrying debt into retirement

New research from Strategic Insights brought this very important issue to light:

Total student debt rose 6.2% annually over the past 10 years to $42.9-billion
this compares with an average inflation rate over the same period of 1.6%
Average debt for a graduating student as of July, 2015 was $26,819
Students graduating with significant debt could buy houses and start families later in life
Add on as many as 35 years to pay off mortgages, lines of credit and other borrowings
This stretches debt into retirement
Student debt has soared despite a substantial increase in the amount of money parents are contributing to RESPs

Toronto Credit Counseling: Going into retirement with debt

It’s hard to imagine that student debt can still haunt retirees, but it’s happening. And more and more students are graduating with heavy debt loads. Statistics Canada reports that 50% of students graduating with a BA relied on debts to pay for their education which in turn may well affect the future debt load of retirees. Parents, you may not realize it but your children may pay the price for your debt load.

Toronto Credit Counseling: Going into retirement debt free?

If you’re struggling with debt, now is the time to deal with it, before it becomes a multi generational issue. Perhaps all you need is credit counseling to get you pointed in the right direction to become debt free.

Contact the Ira Smith Team. We can help you put debt behind you Starting Over, Starting Now. End the cycle of debt, avoid bankruptcy and help your children have a bright future, free of student debt. 3bestaward

Tags avoid bankruptcy, carrying debt into retirement, Debt, debt into retirement, going into retirement debt free, going into retirement with debt, household debt, Ira Smith Trustee, retirement debt, student debt, student loans, toronto credit counseling

Brandon Blog Post

#VIDEO-STUDENT DEBT: HOW TUITION COSTS AND DEBT NEGATIVELY AFFECTS US#

Post author By Brandon Smith
Post date September 7, 2016

STUDENT DEBT: HOW TUITION COSTS AND DEBT NEGATIVELY AFFECTS US

Student debt: The times have changed already!

Times have changed so much for university graduates and unfortunately, student debt counselling has not kept pace with today’s reality. Students graduate with various student loans and varying amounts of debt. The theory is that graduates will get a well-paying job in their chosen field upon graduation, allowing them to work and to repay their student loan debt.

Our previous student debt counselling and student loans blogs and vlogs

Student loan debt is such a serious issue that we’ve written a series of blogs and vlogs on the subject:

Student debt: What can today’s graduates expect?

However, in today’s world, their job searching may result in them not getting immediately into their field at the salary they anticipated. It may be the case that graduates may have to do a couple of different part-time jobs, may start being underemployed and in some cases, starting out interning and being in their chosen field but not being paid at all. This will put immense pressure on the new graduate who needs to start repaying debt in addition to normal living expenses.

Student debt: How much of a problem is it really?

Post-secondary education is effectively a need to succeed in today’s labour market. Unfortunately, while the demand for education has increased, public funding has failed to keep up.

According to the Canadian Federation of Students, public funding shortfalls have resulted in a significant growth of costs that students must now bear, namely in the form of high tuition fees. From 1990 to 2014, national average tuition fees have seen an inflation-adjusted increase of over 155%. In Ontario, tuition fees have increased over 180%.

They also state that students who receive funding through the Canada Student Loans Program (CSLP) are graduating with an average student loan debt of $28,495. This is only student loan debt and doesn’t include any other borrowings for living expenses if the student is living away from home. The impact of Canada student loan debt is that today’s students are the most indebted generation in Canadian history. They can certainly use student debt counselling.

Student debt: We need more than just counselling

Although financial counselling should begin at home at a very young age, and be reinforced through teachings at the high school level, more than debt management lessons are required. We need our provincial and federal governments to take the lead. There needs to be an easing of the burden on graduates. Graduates with high student loan debt show signs of poor mental health in early adulthood. This certainly must impact their work performance and is not healthy for Canadian society.

Our governments need to look seriously at the public funding model for post-secondary school education. It is not helping Canadians to allow them to incur high student debt for fields of study where the job prospects, and the prospect of being able to repay the loans, are dim. It does not help Canadian graduates to have them under so much pressure to repay loans after graduation – perhaps there needs to be federal government intervention to ease the repayment program. In this way graduates can have the necessary time to get their employment, contribute to Canadian society, pay income taxes AND repay student loans.

These are just but a few simple ideas. I am sure that you can come up with many more and I would love to hear about them.

Are you in need of student debt counselling or credit or debt counselling in general?

No matter the cause of your serious debt issues, The Ira Smith Team is here to help. Debt is not insurmountable; there are always options. With proper counselling, immediate action and a solid plan, we can help get your life back on track Starting Over, Starting Now. Our trustees are also certified in credit counselling. Give us a call today.

THIS VLOG WAS INSPIRED IN PART BY OUR eBOOK – PERSONAL BANKRUPTCY CANADA: Not because you are a dummy, because you need to get your life back on track

Tags average student loan debt, canada student loans program, canadian federation of students, CSLP, debt counselling, debt management lessons, financial counselling, Ira Smith Trustee, student debt, student debt counselling, student loan debt, student loans debt

Brandon Blog Post

STUDENT DEBT COUNSELLING: ARE WE DOING ENOUGH TO REDUCE THE COST OF STUDENT LOANS?

Post author By Brandon Smith
Post date August 8, 2016

Amazon Prime getting into the US student loan business but not student debt counselling

As you will see from this blog, there is a huge need for student debt counselling, as new entrants into the student loan business are enticing students with new offers. The financial services industry in the United States is changing rapidly with many non-traditional companies getting into the game. The latest is Amazon Prime. They’re now offering discounted student loans to Amazon Prime Student customers through a partnership with Wells Fargo.

Although this type of program is now only available in the U.S., and while we typically discuss things that affect Canadians, we felt that anything that could cut the cost of a student loan was worth reporting. However, keep in mind that this does nothing for student debt counselling so that students are better able to handle debt. It is merely a financial opportunity with little risk as further described below.

Our previous student debt counselling and student loans blogs and vlogs

Student loan debt is such a serious issue that we’ve written a series of blogs and vlogs on the subject.

Canadian Federation of Students study

According to the Canadian Federation of Students (CFS), the impact of Canada student loan debt is that today’s students are the most indebted generation in Canadian history. They can certainly use student debt counselling.

The average student graduates with over $28,000 of debt. Tuition fees and living costs continue to rise, and there’s no solution in sight. The CFS has been lobbying the federal government for students, to no avail. And it’s not better south of the border where tuitions and the student loan debt is proportionally greater.

Perhaps CFS should also lobby the provincial governments to include student debt counselling as a mandatory grade 12 subject in high school!

Is Student Debt Counselling Being Offered to Amazon Prime Student customers?

Through the partnership, Wells Fargo is not offering any student debt counselling, but is offering student loans Amazon Prime Student Customers (not students whose parents have a Prime membership of their own):

A 0.50% interest rate discount
This can be added on top of a 0.25% interest rate reduction for enrolling in an automatic monthly loan repayment plan
In addition, any interest rate discount tied to another Wells Fargo global promotion

Students can apply for a new student loan or refinance existing student loans.

Why would Amazon Prime want to get into the student loan business

Of course this partnership benefits Amazon and Wells Fargo financially. However, it does not give any education to college students through student debt counselling. Amazon Prime will no doubt have many more sign ups and Wells Fargo will have access to many more potential borrowers. But the bottom line is that the student will benefit by having access to discounted student loans. Hopefully someone in Canada will also find a way to help lighten the student loan debt load.

However, there is even a greater reason. In Canada, a bankruptcy discharge will only end student loans if you’ve ceased to be a full or part-time student for more than seven years and either declare personal bankruptcy or make a debt proposal to your creditors, most likely through a consumer proposal. The only other option is to attempt to seek from the Court relief because of undue hardship, but this is very difficult, if not impossible.

If you think it is difficult under Canadian law to end student loans, it really is impossible under the US Bankruptcy Code. The leading case in the US, which subsequent decisions have followed, is, Marie Brunner v. New York State Higher Education Services Corp. (October 14, 1987, #41, Docket 87-5013). This case set a precedent for defining the concept “undue hardship” in bankruptcy discharges of student loans.

Suffice to say that if a bankrupt in the US is seeking a discharge of all of his or her debts, including student loan debt, the mere fact that they can afford to hire and pay an attorney can be used as evidence that if they have funds to pay legal counsel, then there is no undue hardship for them to agree to a repayment plan on account of the student loan debt after they get their discharge from bankruptcy and their non-student loan debts.

Since the debt will in almost every case always be owing and payable, it is a safe bet for Amazon Prime.

Are you in need of student debt counselling or credit counselling?

Tags Amazon Prime, Amazon Prime Student, canada student loan, discounted student loans, Ira Smith Trustee, marie brunner, starting over starting now, student debt, student debt counselling, student loan debt, student loan repayment, student loans, the impact of student debt

Brandon Blog Post

STUDENT LOANS DEBT: WILL BANKRUPTCY ELIMINATE IT IF YOU ARE NOT THE STUDENT?

Post author By Brandon Smith
Post date April 25, 2016

An interesting American case about student loans debt

Student loans debt is nearly impossible to get rid of in bankruptcy. A case winding its way through the US court system has piqued our intellectual interest. A father, who is a discharged bankrupt, is taking the lender who HE borrowed funds from for his child’s education to Court. The lender is continuing to pursue collection efforts against the father on the basis that the provisions of the Bankruptcy Reform Act of 1978, as amended, codified in Title 11 of the United States Code and commonly called the “Bankruptcy Code” (“Code”), does not release the father from what is in reality student loans debt. The father is taking the lender to Court for a ruling that by virtue of his discharge, he is released from that debt like all his other debts. It has raised the question whether the same student loans debt rules should apply in that case.

The Canadian perspective

We are not qualified to express any opinion on the US legal case before the US Court, but we are qualified to discuss the issue from the Canadian perspective. We started thinking whether this same situation could arise in Canada for student loans.

Last week we discussed student debt bankruptcy from the perspective of the student. Previously, we have written blogs and created a vlog about student loan debt, including:

So this week, we’re discussing student loan debt and bankruptcy from a very different and interesting angle. Could a Canadian lender take the position against a Canadian parent borrower who on the loan application described the purpose of the loans for the funding of his or her child’s Canadian post-secondary education, that the loans qualify as student loans under the applicable Canadian statutes, including, the Bankruptcy and Insolvency Act (Canada) (BIA). Stated otherwise, are such loans the same as student loans under Canadian law and can bankruptcy cut such loans if you’re not the student?

Are student loans necessary?

Many young Canadians need student loans to get a post-secondary education. To qualify as Canadian student loan debt, the loans must be issued under a specific Canadian student loan statute: the (i) Canada Student Loans Act; (ii) Canada Student Financial Assistance Act; (iii) Apprentice Loans Act; or (iv) any enactment of a province that provides for loans or guarantees of loans to students.

All students need financial help to be full-time university students. The only real places that such assistance can come from is either the parents, if they are willing and able to do so, student loans, or both. Many Canadian parents pay a hefty part of students’ tuition fees, even if it means sacrificing their financial stability, to help their children avoid a post-graduation life burdened by tens of thousands of dollars of student debt. Others may wish to, but they cannot afford to do so.

So are student loans and the resultant debt necessary? In most cases, yes.

Can a parent co-sign for or guarantee their child’s student loans?

The short answer is no. As I have already stated, to qualify as a student loan, the loan has to be made under the provisions of one of the Federal loan statutes mentioned above, or any such similar Provincial legislation. Nowhere in those student loans statutes is there a place for either a guarantor or cosigner. In fact, the Federal statutes all have similar language stating that upon the death of the borrower, the Federal government will repay the outstanding part of the loan. In addition to there not being any sections that allow for a guarantor or cosigner, the specific section dealing with the death of the borrower does not limit the government’s guarantee by using words like “….and if the lender is unable to collect in full from any guarantor or cosigner”. The reason is simple, student loans cannot be guaranteed or otherwise borrowed by anyone other than the student.

Will bankruptcy eliminate student loans debt?

Student loans are nearly impossible to get rid of in bankruptcy. Section 178(1) of the BIA states:

“(g) any debt or obligation in respect of a loan made under the Canada Student Loans Act, the Canada Student Financial Assistance Act or any enactment of a province that provides for loans or guarantees of loans to students where the date of bankruptcy of the bankrupt occurred:

(i) before the date on which the bankrupt ceased to be a full- or part-time student, as the case may be, under the applicable Act or enactment, or

(ii) within seven years after the date on which the bankrupt ceased to be a full- or part-time student;

(g.1) any debt or obligation in respect of a loan made under the Apprentice Loans Act where the date of bankruptcy of the bankrupt occurred

(i) before the date on which the bankrupt ceased, under that Act, to be an eligible apprentice within the meaning of that Act, or

(ii) within seven years after the date on which the bankrupt ceased to be an eligible apprentice;”

So if you’re a student, bankruptcy will only end student loans if you’ve ceased to be a full or part-time student for more than seven years and either declare personal bankruptcy or make a debt proposal to your creditors, most likely through a consumer proposal. The only other option is to attempt to seek from the Court relief because of undue hardship, but this is very difficult, if not impossible.

What is required to meet the burden of undue hardship?

If the Court is satisfied that you meet the two-pronged test, you’ll be discharged from your student loans obligations in bankruptcy only if the :

acted in good faith in connection with your obligation to repay your student loan debt; and (emphasis added)
have experienced, and will continue to experience, financial difficulty that will prevent you from repaying this debt

It’s then up to the bankruptcy court to decide whether they forgive your loans, either in full or in part. One of the difficulties in trying to prove undue hardship is that there is no clear definition for what makes up hardship; each bankruptcy court across Canada may use a slightly different interpretation. The only thing that’s clear is that you must prove that having to continue to pay the student loans after bankruptcy would be a financial hardship for you. If you try this route, the Court will look at ALL of your income and expenses.

The Court may decide you are not trying hard enough, or, may look at things like your small car you use to get to work, which you purchased used (instead of taking public transit), your cell phone and your internet expenses, and decide that these are luxuries you do not need. If you are a smoker, the Court may very well decide that if you were not addicted to tobacco, you could start to repay some part of your student loans.

If you think my examples are picayune or silly, just look up the case of Fournier (Re), 2009 CanLII 31606 (ON SC).

Will bankruptcy eliminate student loan debt if you are not the student?

I don’t know what the eventual disposition of the US case which I mentioned at the beginning of this blog will be, but based on all the above, in my view in the Canadian context, a parent, relative or friend cannot guarantee, cosign or borrow for a loan that qualifies as a Canadian student loan. If you borrow to fund your child’s education, then you are borrowing under an ordinary commercial transaction and the applicable student loan sections of the BIA do not apply.

So if you have borrowed for this purpose, only the normal provisions of the BIA apply, and you will get a discharge from that and your other debts upon your discharge from bankruptcy. However, if you pledged any of your assets in support of such borrowings, such as your home, the lender does have the right to enforce its security against such assets if you cannot repay, whether you are bankrupt or not.

What should you do if you have too much debt?

If you’re drowning because of your finances, we know we can help you. Although many people believe that bankruptcy is the only way of out serious debt, that’s not always the case. Ira Smith Trustee & Receiver Inc.can discuss other bankruptcy alternatives with you which include credit counselling, debt consolidation and consumer proposals.

If we get to see you early enough, at the first sign of trouble, you can use and carry out one of the bankruptcy alternatives, to free you from the burden of your financial challenges to go on to be a productive, contributing member of society and not be plagued by debt problems.

Bankruptcy law is very complicated and requires the expertise of a professional licensed insolvency trustee. Ira Smith Trustee & Receiver Inc. is here to help. With a cumulative 50+ years of experience dealing with diverse issues and complex files, we can get you back on your feet Starting Over, Starting Now. We can help. Call us today.

People consider us bankruptcy experts because we wrote the eBook which is sold on Amazon.ca, explaining the Canadian personal insolvency and bankruptcy system, specifically directed to the person stressed out with too much debt.

Brandon Blog Post

STUDENT DEBT BANKRUPTCY: NEW SECRET TACTIC TO AVOID BANKRUPTCY

Post author By Brandon Smith
Post date April 18, 2016

Student debt bankruptcy inquiries on the rise

Student debt bankruptcy is a very serious issue in our country. We’ve looked at the problem from different angles in a series of blogs and like you, are left with more questions than answers.

Cases on the rise

Unfortunately, regardless of which government is in power, there’s been no solution or improvement regarding this kind of debt and student debt bankruptcy. In fact, university and college debt have now taken on epic proportions. According to the Canadian Federation of Students (the largest organization for post-secondary students in Canada), last year the number of student debt bankruptcy files of those who received student loans hit a 10-year high as more than 6,000 students declared bankruptcy in 2015, more than double the number in 2014.

We don’t have a level playing field nationally

The costs of post-secondary education have become prohibitive. Firstly, we don’t have a level playing field. The cost of tuition varies greatly from province to province, from city to city and from college to university (where the same program is offered). According to a study by the Canadian Centre for Policy Alternatives the cost of tuition alone (not including books, living expenses, transportation, entertainment, etc.) is:

$8,756 in Ontario
$6,969 in Nova Scotia
$2,655 in our easternmost province
$2,350 for the police foundations program at Georgian College
$4,466 for the police foundations program at Laurentian University in the same buildings with the same teachers as Georgian College

Some Provinces are coming up with a new secret tactic

Newfoundland and Labrador have replaced student loans with needs-based grants, essentially wiping out tuition costs. Prince Edward Island and Nova Scotia don’t charge interest on these loans but there are still too many people who are being crushed by a mountain of student debt. Recently, the Ontario Liberal government announced in its recent budget that it is combining existing programs to create an Ontario Student Grant, which would pay for average college or university tuition for students from families with incomes of $50,000 or less.

The Canadian Federation of Students has called on the federal government to make tuition at university and college free for all students but that’s not going to happen.

So the new secret tactic is free university tuition? It may be a nice idea but who’s going to pay for it?

What to do if you have too much debt

Unfortunately, we can’t solve the student debt issue where during studies, or after graduation, (former) students have debt they cannot afford to repay. However, we are experts in dealing with debt.

If you’re a student loan recipient who’s thinking of declaring bankruptcy or you’re being strangled by general financial obligations that you can’t meet, contact Ira Smith Trustee & Receiver Inc. Given immediate action and the right financial plan, we can have you on your way to a debt free life Starting Over, Starting Now. Watch for our blog next Tuesday when we’ll be discussing Student Loan Debt: Will Bankruptcy Eliminate It If You Are Not The Student?

Tags Bankruptcy, financial plan, free tuition, Ira Smith Trustee, starting over starting now, student debt, student debt bankruptcy, student loan, student loan debt, trustee

Brandon Blog Post

#VIDEO: AVERAGE STUDENT LOAN DEBT: REASONS WHY WE PITY YOU#

Post author By Brandon Smith
Post date December 23, 2015

The rise of average student loan debt

<<average -student-loan-debt

Average student loan debt is getting out of control. Post-secondary education is effectively a need for today’s labour market. According to the Canadian Federation of Students in its paper titled: “The Impact of Student Debt”, unfortunately, since the demand for education has inflated, public funding did not keep up. Public funding shortfalls have resulted in the increased cost of post-secondary education being borne by students.

The growth in average tuition fees

From 1990 to 2014, the national average tuition fees have seen an inflation adjusted increase of over one hundred and fifty per cent (150%). In Ontario, tuition fees have grown over one hundred and eighty percent (180%). For most students—often having spent very little time active within the workforce, other than for part-time work—funding their education has become more and more troublesome.

Students now taking on higher levels of average student loan debt

Many students are now taking on increased levels of debt for their education. Students requiring a Canada Student Loan currently graduate with an average student loan debt of over $28,000. Keep in mind that this is an average, with the costs of graduate education resulting in higher debt levels. Relying on debt to finance education suggests that there is a delay in the full impact of high tuition fees till after graduation—when interest begins to be charged.

Societal issues caused by rising average student loan debt statistics

This impact is now exacerbated by the effects of the most recent recession and the rising trend of precarious, and even unpaid, employment. The broader effects of high levels of student debt on both the person and the general economy are now resulting in various issues:

Young Canadians (15-24) accounted for over half of job losses over the last 5 years;
Un and under-employment can cost the Canadian economy over $22 billion by 2031;
In 2014, youth un and under-employment was twenty-seven per cent (27%);
Thirty per cent (30%) of medical students expect to graduate with over $100,000 in student debt;
Under-employment and work outside one’s field of study results in talent degradation, falling behind in ability, and lost networking opportunities;
Canada has seen a fifteen per cent (15%) growth in Canadians under the age of 30 who still live in their parent’s home since 1981;
Those with student debt have a fewer assets, savings or investments compared to debt-free peers.

Average student loan debt causes affect the Canadian economy

Starting out with huge debt and facing a weak labour market, this prevents graduates to fully take part within the Canadian economy. Student debt impacts career selections, even among professional school graduates in medicine and law. An estimate of unpaid internships is in the range of 300,000 graduates working with no pay.

Do you have too much debt? Then contact us now

If you are an individual or company who needs to free themselves from the stress and strain of too much debt, and especially if you have been told your situation is hopeless, Ira Smith Trustee & Receiver Inc. can prepare and carry out the plan made just for you, to free you from the burden of your financial challenges to go on to live a productive, stress-free, financially sound life.

Student loan debt has its own set of unique rules and complexities within the Canadian insolvency scheme. If you’re experiencing serious debt issues, contact a professional trustee for a free, no obligation consultation. The Ira Smith Team does not try to write new insolvency law or tax law. Rather, we will evaluate your situation within the existing statutes, and help you to arrive at the best possible solution for your problems, whether that solution is a bankruptcy alternative like credit counselling, debt consolidation or a consumer proposal or bankruptcy. Starting Over, Starting Now you can be debt free with the help of a professional, licensed trustee in bankruptcy. Contact us today.

Brandon Blog Post

CANADA’S MIDDLE CLASS: DO YOU YOU QUALIFY?

Post author By Brandon Smith
Post date July 14, 2015

Canada’s middle class is a huge topic these days. There’s been a lot of talk recently about the growing gap between Canada’s affluent and middle class. Before we can begin to understand what’s happening to Canada’s middle class, we must first be able to define it.

“One of the troubles with the term middle class is it’s so elastic and there’s not a clear-cut definition,” said Charles Beach, an economist and Queen’s University professor emeritus. Beach says surveys have shown most Canadians consider themselves part of the middle class without quite defining what it is. “There is no consensus definition of ‘middle class,’ nor is there an official government definition,” said the memo, obtained by The Canadian Press under the Access to Information Act.

The New York Times defines the middle class as families earning between $35,000 and $100,000 a year. This would seem to hold true in Canada as well. According to Employment and Social Development Canada:

The middle 60% of families earned an average of $53,500 after tax in 2011

According to Statistics Canada:

The total median 2012 income for families, defined in this case as all couples with or without kids, was $81,980

The problem is that it’s now difficult to make middle class. Paul Kershaw, policy professor at the University of British Columbia reports:

The typical 25 – 34-year-old is now making wages that are 11% lower than they were for the same aged person in 1976, even though their education levels are higher
The typical older worker is making wages that are 3% – 7% higher than a similar person did 30 years ago
House prices have nearly doubled in that time, meaning more wealth for the older person and more debt for the younger person

“It takes longer now to do anything that looks like a middle-class lifestyle,” says John Myles, professor emeritus of sociology at University of Toronto, as young people stay in school longer than in generations past, get more credentials, start careers later, get married later and buy homes later. And the gap between the affluent and the middle class is growing.

Canadian Centre for Policy Alternatives report finds most affluent families in their 20’s have net worth over $500,000, more than most middle-class families save over decades. Real estate is typically the reason the affluent are able to meet such a high net worth at such a young age. Their parents buy a property for them, help purchase the property and/or give the down payment. In addition the affluent are starting off life with no student debt as their families were able to fund their educations. Conversely, those striving to make middle class are often buried under a mountain of student debt. This in and of itself is problematic enough, but it also delays being able to purchase a house. And with the cost of housing rising exponentially (the average price of a detached house in Toronto is now over $1 million), the gap between the affluent and the middle class will continue to grow.

Many trying to make a middle class lifestyle are struggling financially, living paycheque to paycheque and need professional help. Trustees are experts in dealing with debt. The Ira Smith Team has a cumulative 50+ years helping people and companies facing financial crisis or bankruptcy that need a plan for Starting Over, Starting Now. Call today. Stop struggling and start enjoying life again.

Tags Bankruptcy, Canada’s middle class, Debt, housing prices, living paycheque to paycheque, Middle class, middle class lifestyle, starting over starting now, student debt, trustee

Brandon Blog Post

WHY GOOD DEBT HAD BEEN SO POPULAR TILL NOW

Post author By Brandon Smith
Post date June 23, 2015

Is there really good debt? Debt is a four letter word and it’s strangling many Canadians. Even if you have what people refer to as good debt, if you are having difficulty servicing it, then you have debt problems, no matter how you classify the debt itself. However, many believe that mortgages and student loans are good debt.

Let’s have a look at mortgage debt. Mortgages have been considered good debt because they allow you to buy an appreciating asset which you can then sell at a considerable profit. According to the Royal Bank of Canada:

Canadians have taken on $80-billion worth of mortgages, personal loans and credit card debt in the past year
Household debt totalled $1.82-trillion in January
Most of the growth came from new residential mortgages, which rose 5.4% per cent in January compared to a year earlier, to nearly $1.3 trillion
Non-bank lenders, which represent about one-fifth of mortgages, drove the residential housing market over the past year, with outstanding mortgage debt rising 6.3% compared to 4.3% cent among banks

The Globe and Mail received a memo from the Canadian Mortgage and Housing Corporation (CMHC) stating that it was “concerned about reduced household flexibility resulting from elevated debt levels as well as diversion of capital into residential housing investments.” Ten to twenty years ago Canadians were able to buy into an affordable housing market that greatly appreciated. However, with detached housing prices rising above $1-million in Toronto and Vancouver, it’s increasingly difficult to buy into the housing market and unlikely that level of appreciation will ever be seen again. So if you have a reasonable down payment and you can handle the monthly mortgage payments within your budget, then you can handle this debt and therefore it is good debt.

Let’s have a look at student loans. Student loans have always been considered good debt. In years past a university degree guaranteed you a good job upon graduation. However, in today’s world we have record numbers of unemployed and under-employed graduates with a mountain of student debt. Statistics Canada’s Survey of Financial Security reports that student debt grew 44.1% from 1999 to 2012, or 24.4% between 2005 and 2012. And, one in eight Canadian families is carrying student debt. The average student is having a great deal of difficulty paying off their student loans and according to the Canada Student Loans Program, most students take nearly 10 years to pay off their loans – with some taking the maximum 14.5 years. Under this scenario, is it really good debt?

The reality is that both good debt and bad debt can strangle you. Returning to financial health requires the help of a professional. Struggling from paycheque to paycheque is no way to live. Contact Ira Smith Trustee & Receiver Inc. With immediate action and a solid financial plan we can set you on a course to a debt free life Starting Over, Starting Now.

Tags Debt, debt problems, good debt, mortgage debt, paycheque to paycheque, starting over starting now, student debt, student loans, trustee