Tag: trustee

BANKRUPTCY OPTIONS: DO YOU REALLY NEED A $100K PERSONAL ASSISTANT?

Post author By Brandon Smith
Post date August 22, 2016

Sometimes even the rich need bankruptcy options

Many people are under the misconception that bankruptcy options don’t apply to the rich and famous or the rich and not famous because they don’t have money problems. In fact, rich people can and do have money problems.

This issue is more prevalent than you think and we’ve written a series of blogs about it in the hopes of removing the stigma of bankruptcy.

Being rich doesn’t make you smart about money. Often times the money begets a lifestyle that’s intoxicating but unsustainable – mansions, yachts, a fleet of luxury vehicles and exotic travel.

If you are willing to admit to having financial problems at the first sign of trouble, then there are various insolvency choices available. But if you wait until you have lost it all, and then some, then bankruptcy, or perhaps one of the bankruptcy options, will be available for you.

Trent Richardson acted quickly on his options when he realized he was facing financial problems

Trent Richardson, an NFL player who most recently played for the Baltimore Ravens, discovered that from January 2015 – October 2015 his family and friends spent $1.6 million of his money. This is a perfect example of someone making a small fortune and placing too much trust in others to manage his money. In reality, he didn’t have a clue about his money.

Thankfully he looked at his bank statement before it was too late. He couldn’t believe the charges which included 11 Netflix and 8 Hulu accounts in addition to ordering bottle service while dropping his name at clubs. The irony is that Trent Richardson doesn’t drink. And now for the mother of all expenses – his brother Terrell was earning $100,000 a year as his personal assistant.

Although Mr. Richardson is luckier than most would be in his place because he signed a fully guaranteed deal worth $20.5 million over 4 years originally with the Cleveland Browns on July 2012, he could have, like others before him, lost it all. He did the smart thing and cut all extraneous expenses, including his $100k personal assistant. This is the best of the financial choices: reigning in your spending and getting on a proper budget.

Act quickly; we can help you make the right decision

Let this be a wakeup call to everyone. Regardless of how much money you have, you need to be smart about money, lest you find yourself in deep debt. And that’s where a professional trustee comes in.

We’re here to find what your bankruptcy options are, put your financial house back in order and set you on a path to debt free-living Starting Over, Starting Now. You’ll be amazed at the difference one phone call to Ira Smith Trustee & Receiver Inc. can make. Contact us today.

Tags bankruptcies, Bankruptcy, bankruptcy alternatives, bankruptcy options, Ira Smith Trustee, living paycheque to paycheque, trent richardson, trustee

Brandon Blog Post

INVESTMENT FUND: EXPENSE RATIO CAN INSTANTLY PRODUCE AWFUL RETURNS!

Post author By Brandon Smith
Post date August 1, 2016

Investment fund introduction

We have handled many insolvency cases of people and companies where an investment fund with negative returns, combined with a highly leveraged balance sheet, was a major reason for financial problems. This week we’re continuing our series on confusing financial terms that can cost you more than you bargained for. As trustees we see people in financial distress from a variety of reasons, but there seems to be a commonality – most people find financial lingo confusing.

This confusion magnifies when it relates to an investment fund they have bought, but don’t really understand. We have handled many cases where people having read articles about the tax and investment benefits of leverage, borrowing for investment purposes, do so by borrowing against the family home to invest in financial products they don’t understand!

Sometimes, if they have invested too heavily, not only is their investment at risk, but so is their family home! This series of blogs should clarify many confusing financial terms and with this knowledge help you to make more informed financial decisions. We’ve previously discussed Balloon Payments and APY – Annual Percentage Yield. Our current topic is expense ratios.

What is an investment fund expense ratio?

An expense ratio is a percentage of your investment fund or ETF that’s charged annually to cover its operating costs. These operating costs may include administrative charges, management fees, custody costs, legal expenses, marketing and transfer agent fees among others.

How can I find out what the expense ratio is on an investment fund that I’m interested in investing in?

Every investment fund has a prospectus (a legal document providing details about an investment offering for sale to the public) containing the expense ratio. The prospectus is sent to shareholders every year and shared with potential investors. And, since we live in the information age, a fund’s expense ratio can also be found on financial websites and in newspapers (both online and in print).

How can an expense ratio negatively impact my investment funds?

The expense ratio directly reduces an investment fund’s returns to its shareholders, which reduces the value of your investment. The lower your costs are the greater your investment’s return will be. Every dollar you pay in operating costs is one dollar less that’s earning money for you. Even small differences in fees can impact on your investment over time.

What if my investment fund heads south and I can no longer service my debts?

Making the right financial decisions is crucial to your financial health. Unfortunately many Canadians are now struggling with debt that seems insurmountable. The Ira Smith Team is here to tell you that we’re here to help, regardless of how dire your situation seems now. Make the right decision and give us a call today. Starting Over, Starting Now we can get you back on the road to financial health. Watch for future blogs when we’ll be discussing other confusing financial terms that can impact you financially.

Tags Annual Percentage Yield, APY, balloon payments, confusing financial terms, expense ratio, financial health, high expense ratio, investment fund, Ira Smith Trustee, prospectus, trustee

Brandon Blog Post

LICENSED INSOLVENCY TRUSTEE TORONTO SAYS LOTTERY JACKPOT CAUSES BANKRUPTCY

Post author By Brandon Smith
Post date July 18, 2016

Introduction

As a licensed insolvency trustee Toronto, when I first came across this study, frankly I was quite surprised. After all, how could my neighbour’s good luck have such an adverse effect on me? Nevertheless, according to a study co-authored by University of Alberta professor, Barry Scholnick for the Federal Reserve Bank of Philadelphia, if your neighbour wins a big lottery you could go bankrupt.

Why would the neighbours of lottery winners go bankrupt?

It all boils down to “keeping up with the Jones”. The study says that your going bankrupt likelihood increases when your neighbour buys a big house, fancy cars, boats; anything that’s highly visible or showy. Then the neighbours, feeling pressure to keep up or compete, also go on a spending spree. However, without the cash from a lottery win, the neighbours’ finance their spending sprees with debt and beat a clear path to bankruptcy. Sadly, it’s not just the neighbours of lottery winners that go bankrupt. As a licensed insolvency Trustee Toronto I can say that a high percentage of lottery winners go bankrupt too.

How many lottery winners go bankrupt?

44% of those who’ve ever won large lottery prizes became broke within five years, according to a 2015 Camelot Group study.
33% declared bankruptcy according to the Certified Financial Planner Board of Standards.
Other studies show that lottery winners often become estranged from family and friends, and incur a greater incidence of depression, drug and alcohol abuse, divorce, and suicide than the average person. As a licensed insolvency trustee Toronto, we must also help the person seek help for their medical condition/addiction, as part of helping them solve their financial problems.

All of a sudden lottery winners have an enormous amount of money on their hands and they have no idea what to do with it. Instead of seeking financial advice from a licensed professional and investing a large part of their money for the future, they go on wild spending sprees and pretty soon they’re worst off then they were before. Then they have to go see someone like me, the bankruptcy trustee.

Can a licensed insolvency trustee Toronto help me?

What the study shows is that a big lottery win will not grant you immunity from bankruptcy. Regardless of the reasons that you’re in serious debt, you need the help of a professional trustee. Ira Smith Trustee & Receiver Inc. approaches every file with the attitude that we will solve your corporate or personal financial problems given immediate action and the right plan. Give us a call today and take the first step towards a debt free life. We are a licensed insolvency trustee Toronto that can get you back on the road to financial health, Starting Over, Starting Now.

Tags bankrupt, Bankruptcy, big lottery win, declare bankruptcy, Ira Smith Trustee, keeping up with the Jones, licensed insolvency trustee Toronto, lottery winners, trustee

Brandon Blog Post

SENIORS ARE CARRYING DEBT: WILL RETIREMENT SPELL POVERTY FOR YOU?

Post author By Brandon Smith
Post date July 11, 2016

Seniors are carrying debt – Background

Seniors are carrying debt. Senior finances are nothing short of alarming. How will retirement look for you? Will you be taking part in wonderful retirement activities such as traveling the world in style? Will you continue to work in one of the jobs for retirees? Will you be at home living in poverty on a meager government provided pension?

This is such a serious issue that we have written a series of blogs on the topic which delve into WHY seniors are carrying debt.

Seniors are carrying debt – What is the current situation?

The latest facts and figures will not offer any comfort I’m afraid. According to a report by the Broadbent Institute on seniors’ finances:

47% of Canadians aged 55 to 64 don’t have an employer pension plan
50% of Canadians aged 55 to 64 who don’t have an employer pension have less than $3,000 saved up for retirement
Of the Canadians without an employer pension plan those who earn $50,000 to $100,000 a year have saved up an average of $21,000
Of the Canadians without an employer pension plan those who earn $25,000 to $50,000 a year have saved up an average of $250
Less than 20% of people over age 55 who don’t have an employer pension have enough to live in retirement for five years or more
The poverty rates for single seniors, especially for women, is nearly 30%

If seniors are carrying debt, will seniors be living in poverty?

According to Rick Smith, executive director of the Broadbent Institute, “This new data on retirement savings and gaps in support makes one thing perfectly clear — we have a retirement income crisis on our hands that requires urgent government action now.” The reality is seniors are carrying debt and it’s time for the federal government to step up to the plate and in a meaningful way, increase the amount of money we give seniors. Having seniors living in poverty in the greatest country in the world is just not acceptable.

What can I do now to avoid being a senior living in poverty?

The sooner you address debt issues, the better. Eliminating debt is an excellent first step. Contact the Ira Smith Team. We’re professional, federally licensed trustees who can help you conquer your financial problems so that Starting Over, Starting Now you can put debt behind you and start saving for the future.

Tags jobs for retirees, retirement activities, retirement income planning, seniors are carrying debt, seniors carrying debt, seniors in debt, seniors living in poverty, seniors’ finances, trustee

Brandon Blog Post

OUR 5 TOP TIPS IN CHOOSING A BANKRUPTCY TRUSTEE

Post author By Brandon Smith
Post date July 4, 2016

A bankruptcy trustee is now called a licensed insolvency trustee

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

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

Who does the LIT act for?

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

How do I choose a LIT?

Here are 5 tips for choosing a LIT:

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

What should you do if you have too much debt?

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

Tags alternatives to bankruptcy, bankruptcy process, bankruptcy trustee, Ira Smith Trustee, licensed insolvency trustee, Office of the Superintendent of Bankruptcy, official receiver, trustee

Brandon Blog Post

#VIDEO – HOW MUCH DO YOU HAVE TO OWE TO FILE BANKRUPTCY?#

Post author By Brandon Smith
Post date June 29, 2016

HOW MUCH DO YOU HAVE TO OWE TO FILE BANKRUPTCY –

NOT MUCH!

We are always asked, how much do you have to owe to file bankruptcy? The real question is, here are my assets and my debts, what are my options? In Canada, the Bankruptcy and Insolvency Act (Canada) (“BIA”) states that you must owe at least $1,000 of unsecured debt to file for bankruptcy. The same holds true if someone owes you money. They must owe you at least $1,000 on an unsecured basis to apply to the Court to make an Order judging a person or company into bankruptcy. As you can see, the threshold is not very high.

HOW MUCH DO YOU HAVE TO OWE TO FILE BANKRUPTCY –

ARE YOU INSOLVENT?

Facing serious financial difficulties is devastating, especially if you believe that personal bankruptcy is your only option. In fact many people mistakenly believe that dire financial problems automatically mean personal bankruptcy. If you are having problems meeting your financial obligations or have stopped meeting those financial obligations as they come due you are actually insolvent, not bankrupt. Insolvent is a financial condition; bankruptcy is a legal state.

Bаnkruрtсу is a legal рrосеѕѕ under the BIA that helps you to resolve уоur debts if they have become unmanageable. If you have relatively few assets and low іnсоmе and dесіdе to file for bаnkruрtсу, you will probably fіlе under the shortened Summary Administration part of the BIA. If you have realizable assets that will produce a value greater than $10,000, then your bankruptcy would be administered under the general administration provisions. Don’t worry about these distinctions now. For now, just know that the streamlined summary administration rules is a simpler process, and the Superintendent of Bankruptcy sets the cost of the bankruptcy administration.

HOW MUCH DO YOU HAVE TO OWE TO FILE BANKRUPTCY –

THE BANKRUPTCY PROCESS

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

If you have very little property, all of it might be рrоtесtеd so that you will not lose it. How much уоur сrеdіtоrѕ will get in this process dереndѕ on how much уоur unрrоtесtеd property sells fоr and whether you must pay “surplus income” to your LIT.

The last step of your bankruptcy process, will be to get your discharge from your debts, meaning that you will not have to рау them all (with certain exceptions).

HOW MUCH DO YOU HAVE TO OWE TO FILE BANKRUPTCY –

SEE A TRUSTEE EVEN IF YOU DO NOT WANT TO GO BANKRUPT!

People think that they should only see a LIT if they need to file for bankruptcy. Every LIT will give you a free 1 hour consultation, to go over your situation and offer you your available options. The topics the LIT will discuss with you are:

As you can see, bankruptcy is only one of many topics discussed, in determining what your options are, allowing you to choose the one that makes the most sense to you. No other professional can discuss this full range of topics with you, and especially not for free!

WHAT SHOULD YOU DO IF YOU OR YOUR COMPANY HAS TOO MUCH DEBT?

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

We’re not only bankruptcy experts; we’re experts in dealing with debt. Contact Ira Smith Trustee & Receiver Inc. today for a free consultation and you will be well on your way to regaining your former quality of life Starting Over, Starting Now.

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 Bankruptcy, bankruptcy alternatives, Bankruptcy and Insolvency Act, bankruptcy process, BIA, Consumer Proposal, credit counselling, credit rating, debt conslidation, debts, file bankruptcy, how much do you have to owe to file bankruptcy, insolvent, Ira Smith Trustee, licensed insolvency trustee, personal bankruptcy, rebuilding credit, trustee

Brandon Blog Post

AVERAGE HOUSEHOLD DEBT IN CANADA: CANADIANS LOVE TO MAKE IT CONTINUALLY RISE!

Post author By Brandon Smith
Post date June 20, 2016

What is average household debt in Canada?

Average household debt in Canada: the average of the amount of money that all Canadian adults in the household owe financial institutions.

Statistics Canada said that total household consumer debt, which includes consumer credit card and mortgage and non-mortgage loans, increased 1.2 per cent to $1.923 trillion at the end of last year. The total included $573.6 billion in consumer credit debt, including credit card debt, and $1.262 trillion in mortgage debt.

The growth helped drive the ratio of household debt to disposable income to a new peak of 165.4 per cent in the fourth quarter of 2015, up from 164.5 per cent in the third quarter.

It’s unbelievable but true – average household debt in Canada continues to rise! Unfortunately it seems that nothing has so far been able to stem this tide, particularly as already sky-high housing prices continue to reach new heights. We’ve reported on this very alarming situation in a series of blogs and the situation continues to worsen.

Video – Household Debt In Canada Crisis

How Binge Borrowing Raises Canada’s Household Debt Burden

Canadian Household Debt: We Seem To Love It!

Household Debt; Canadian Levels Sound Alarm Bells

How is it affecting Canadians?

According to a ManuLife Bank survey:

33% of homeowners have been “caught short” at least once in the past year and didn’t have enough money to cover expenses
60% lack confidence that they’ll have enough savings for retirement
Average mortgage debt increased to $181,000 since last fall
25% of homeowners predict that their home equity will make up 80% or more of their household wealth when they retire

What are the options available to Canadian homeowners with limited retirement income?

Delay retirement and keep working as long as possible
Work part-time
Move to a less expensive home and use the money to fund retirement
Sell the home and use the money to fund retirement
Borrow against the home equity

What is the top financial priority for Canadian home owners?

More than anything, Canadian home owners want their average household debt in Canada at a manageable amount and ultimately zero; i.e. be debt free. If you’re like many Canadian home owners struggling with alarming levels of household debt, seek help as soon as possible. A professional trustee can help you deal with your debt problems, and believe me they are not insurmountable. With immediate action and the right financial plan the Ira Smith Team can help you realize your dream of living a debt free life Starting Over, Starting Now. We’re only a phone call away. Book your free consultation today.

Tags average household debt in canada, Canada, Canadian household debt, consumer debt, credit card debt, financial plan, household debt, household debt in canada, Ira Smith Trustee, mortgage debt, retirement income, trustee

Brandon Blog Post

Canadian Payday Loans: 546 Reasons We Need Tough Federal Rules on Payday Lenders and 1 Possible Solution

Post author By Brandon Smith
Post date June 13, 2016

Canadian payday loans – The Problem

Canadian payday loans offered through payday loan companies are a scourge on society. Payday lenders must not be allowed to run. They take advantage of the disadvantaged part of our population who can least afford it. Canadians need protection from payday lenders and it’s high time that the government stepped in and took action. The Ira Smith Team can’t change the law on payday lenders but we can do our best to alert you to the dangers of payday loan companies with our blogs.

Why is the USA ahead of Canada?

When it comes to payday loan companies, the U.S. government seems much more on the ball than the Canadian government. In Canada, it’s the individual provinces that cap the rate lenders can charge borrowers in interest and they apparently aren’t doing much to protect their citizens.

In Ontario the province caps interest on payday loans at $21 per $100 dollars for a two-week period. This may not sound like much to you but on an annual basis it comes to 546%. This is not a typo. The annual interest is 546%.

Canada’s criminal usury rate is 60%. Payday loans are very short-term so they aren’t expressed as annualized amounts making it very easy for payday lenders to hide the fact that you’re actually paying 546% interest on Canadian payday loans.

What is the U.S. government doing about payday lenders?

The U.S. Consumer Financial Protection Bureau has proposed the following regulations:

Lenders must conduct a “full-payment test.” This means that payday loan companies would have to prove that borrowers are able to repay the money without having to renew the loan repeatedly. Typically most payday loans are required to be paid in full two weeks to one month after the person borrows the money and this sets off a cycle of borrowing to repay the previously borrowed money.
Restriction on the several times a borrower can renew the loan.
Lenders must give extra warnings before attempting to debit a borrower’s bank account. This should lower the frequency of overdraft fees that are common with people who take out payday loans.
Restriction on the several times the lender can attempt to debit the account.

What can the Canadian government do about Canadian payday loans?

Canadian activists ACORN are urging the Canadian government to follow the U.S. in regulating these predators. In addition, ACORN is proposing that the federal government:

Create a national database of payday loan users to stop users from taking out a loan to pay off another.
Cap all payday loan fees at $15 on every $100.
Amend the Criminal Code to lower the ceiling for the interest rate from 60% to 30%.

“Too many borrowers seeking a short-term cash fix are saddled with loans they cannot afford and sink into long-term debt,” CFPB Director Richard Cordray said in a statement. “Many borrowers turn to payday loans for fast cash to cover bills when they are rejected by the banks. This allows payday lenders to take advantage of people who have nowhere else to turn”, said Tom Cooper, director of the Hamilton Roundtable for Poverty Reduction. “The predatory nature of payday loans is a failure of the national banking system, which means they should be a federal responsibility”.

Is there an alternative to Canadian payday loans?

According to Duff Conacher, co-founder of Democracy Watch, the alternative is the federal government direct that banks must have branches in low-income neighbourhoods that offer credit lines to lower-income people at the same rate they offer to others. That, he said, would end the need for payday lenders.

What is the solution?

Please don’t resort to payday loan companies! Make a date for a free consultation with a professional trustee instead. Ira Smith Trustee & Receiver Inc. is here to help with sensible advice and a plan to conquer your debt problems so that you can rid yourself of debt Starting Over, Starting Now. Give us a call today.

Tags 546 reasons, Canadian payday loans, Ira Smith Trustee, payday lenders, payday loan companies, payday loans, trustee

Brandon Blog Post

CONSUMER PROPOSAL PROCESS: SETTLE DEBTS AND AVOID BANKRUPTCY#

Post author By Brandon Smith
Post date June 8, 2016

The consumer proposal process says bankruptcy may not be necessary

This is the story of Mary and Paul, who thought they would have to file bankruptcy, but instead, were able to avail themselves of the consumer proposal process. Mary took a job right out of college but recently she’s had to take a lot of time off to care for her sick husband Paul. With reduced income they are now considering bankruptcy. They went to visit a licensed insolvency trustee. A professional who is licensed by the Office of the Superintendent of Bankruptcy can practise as a licensed insolvency trustee. The trustee told them that the bankruptcy route may not be necessary.

Explaining the consumer proposal process

The trustee recommended a bankruptcy alternative called the consumer proposal. The consumer proposal process is an offer to creditors to pay back a percentage of what is owed over no more than period of up to five years. There are advantages to filing for consumer proposal:

you get to keep your possessions;
collection calls and lawsuits are stopped;
wage garnishment is stopped; and
if successful, you will avoid bankruptcy.

Mary and Paul really liked the idea of avoiding bankruptcy. To get things underway, the trustee explains that Mary and Paul must provide a complete list of what they own and what they owe. The trustee will put a consumer proposal process together based on their ability to pay. The proposal will be filed with the Office of the Superintendent of Bankruptcy. This is the federal organization that regulates Licensed Insolvency Trustees.

Once it is filed, Mary and Paul will stop making payments directly to their unsecured creditors. The trustee also explains that after filing the consumer proposal and related documents with the Office of the Superintendent of Bankruptcy, the trustee will then submit the consumer proposal to the couples’ creditors. The creditors will then have 45 days for accepting or rejecting the consumer proposal. If the creditors are unsatisfied with the consumer proposal the trustee may also negotiate so that a consumer proposal acceptable to the creditors which Mary and Paul can afford will be established.

Once the consumer proposal is accepted, Mary and Paul will then be responsible for making periodic payments to the trustee. The trustee will use that money to make a distribution to the creditors. Mary and Paul will also have to attend two counselling sessions to help them. If Mary and Paul make all the required payments and attend the two counselling sessions, then they will be legally released from the debts that were included in the consumer proposal. Mary asked if her and Paul’s credit rating will be affected. The trustee answered yes it will be affected but once the consumer proposal is fully completed, they can start rebuilding their credit.

How can you determine if the consumer proposal process can help you with your debt?

If you’re considering bankruptcy you need the services of a licensed insolvency trustee. Contact Ira Smith Trustee & Receiver Inc. We provide the depth of expertise found in a large company, delivered in an informal setting. We ensure you will receive a high quality and cost effective service.

We will use our combined 50+ years of experience dealing with diverse issues and complex files, to solve your financial problems and provide you with the highest quality of professional service. Take the first step to Starting Over, Starting Now by calling us.

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

Consumer proposal, consumer proposal process, Ira smith trustee, Hoyes, David Sklar, A Farber, trustee, licensed insolvency trustee, starting over starting now, Vaughan bankruptcy, Vaughan consumer proposal

Tags a "consumer proposal, avoid bankruptcy, Bankruptcy, consumer proposal process, Ira Smith Trustee, licensed insolvency trustee, starting over starting now, trustee

Brandon Blog Post

FINANCIAL DEBT COUNSELLING: THE #1 SECRET THAT ALWAYS SHOCKS PEOPLE

Post author By Brandon Smith
Post date June 6, 2016

The #1 secret we have learned through financial debt counselling

When performing financial debt counselling, we discovered many people are confused by financial lingo. As a result people have been negatively affected financially.

As a result we started a series on confusing financial terms. We began with Balloon Payments Can Cost You More Than You Bargained For. Today we’re going to be discussing APY – Annual Percentage Yield. Interest rates play an important role in borrowing and investing. Understanding your APY can will give you a clear picture of what you owe or could maybe gain.

What is APY?

APY is the true annual rate of return taking into account the effect of compounding interest. If you have a credit card and carry a balance each month you’ll be paying interest on top of the previous principal and interest. The interest each month (in effect it’s interest on interest) calculates on a daily basis. It is an important aspect of financial debt counselling.

Why is APY important?

APY is a great tool for evaluating the true interest rate paid on a loan or the return on an investment. It takes compounding into consideration and thus is actually higher than the stated annual interest rate.

If you owe money on a credit card, your APY will almost always wind up being higher than your card’s listed APR (Annual Percentage Rate). Interest charges added to your balance for every month you fail to pay it off in full is the reason. This means that over time you’ll be paying interest not only on the principal amount you owe, but on the interest as well.

In our financial debt counselling sessions, we always expose the APY secret. We will now expose it for you. Say your credit card has a stated APR of 19.99%. If you carry a credit card balance from month to month, an APR of 19.99% compounded daily equals an APY of 22.1214%.

Are you unable to make your monthly payments? Were you not aware of APY?

The reality is that you could be paying a much higher amount than you bargained for. It also may be a much higher amount than you can afford. Most people we counsel are not aware of or didn’t understand APY. In our financial debt counselling sessions, this is everyone’s “AHA” moment.

If you’re dealing with insurmountable debt for any reason contact Ira Smith Trustee & Receiver Inc. today. We’re a full service insolvency and financial restructuring practice serving companies and individuals throughout the Greater Toronto Area (GTA) facing financial crisis or bankruptcy that need a plan for Starting Over, Starting Now. Give us a call today.

We can help. Maybe all you need is some financial debt counselling. Perhaps you need to explore one of the many bankruptcy alternatives. Either way we can devised a plan that allows you to carry on a debt free, stress free life.

Watch for future blogs when we’ll be discussing other confusing terms that can impact you financially.

Tags annual percentage rate, Annual Percentage Yield, APR, APY, balloon payments, Bankruptcy, bankruptcy alternatives, compound interest, credit card, financial debt counselling, interest rate, Ira Smith Trustee, starting over starting now, trustee