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CONSUMER PROPOSAL ONTARIO: AMAZING GOVERNMENT PLAN TO REDUCE CONSUMER DEBT

 


Consumer proposal Ontario: Introduction

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

What is triggering the boost in these queries?

Consumer proposal Ontario: New Ipsos Canadian consumer debt survey

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

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

Consumer proposal Ontario: Bank of Canada benchmark interest rate hike

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Consumer proposal Ontario: The benefits to you

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

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

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

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

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

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

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

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

What this affect my credit score?

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

Just how much does it cost?

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

Consumer proposal Ontario: That freedom feeling

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

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

Our approach for each file is to create an end result where Starting Over, Starting Now takes place. This starts the minute you are at our door. You’re simply one phone call away from taking the necessary steps to get back to leading a healthy, balanced hassle-free life, recover your money and move on to the next investment opportunity.

Call us today for your free consultation.consumer proposal ontario

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CANADIAN DEBT SOLUTIONS: AVOIDING THE BANKRUPTCY PROCESS

Canadian debt solutions: Introduction

This blog discusses a very interesting recent decision in the British Columbia bankruptcy case of Hervias (Re), 2018 BCSC 1579 (CanLII). A licensed insolvency trustee (LIT or Trustee) (formerly known as a bankruptcy trustee) is trained to develop Canadian debt solutions. Sometimes the best debt solution does not involve a formal insolvency process; either a consumer proposal or personal bankruptcy. The purpose of this blog is to describe the case of Mr. Hervias and why sometimes the best advice is that you don’t need to go bankrupt. This is a story of Canadian debt help – the good, bad & ugly.

Canadian debt solutions: The position of the stakeholders

Mr. Hervias made a Court application to annul his bankruptcy. He says that the bankruptcy assignment ought not to have been submitted because his only creditor of any significance was the Canada Revenue Agency (CRA). The evidence showed that CRA would have accepted a voluntary proposal to settle his tax liability in regular monthly payments affordable to him. He claims that the Trustee never asked such questions of CRA prior to recommending that he file for bankruptcy.

CRA does not challenge an annulment. It is encouraging his proposal to repay the debt. They likewise intend to file a memorial on the title to his home in which he has equity higher than the debt owed to CRA!

The Trustee is the only party to oppose the annulment application. The LIT insists that when Mr. Hervias sought his help, Mr. Hervias was insolvent because CRA was garnishing his pension and had frozen his bank account. Mr. Hervias had a previous bankruptcy and a couple of other minor creditors. Mr. Hervias had significant equity in buildings he owned with his son and his wife.

Canadian debt solutions: How could this even happen?

Mr. Hervias owed CRA, his major creditor, unpaid income tax of $23,820.50, including penalty and interest. In April 2017, CRA froze his only bank account. He sought help from a debt consultant, Canada Debt Helpline. He required CRA debt forgiveness. On the second meeting with an agent of Canada Debt Helpline, they introduced him to a LIT.

The Trustee met Mr. Hervias at the offices of Canada Debt Helpline. The LIT argues that Mr. Hervias sought bankruptcy guidance when he initially met with him. The Court determined that Mr. Hervias was presented to the Trustee by the debt counselor. The evidence showed that Mr. Hervias looked for the help of a debt consultant; not for a bankruptcy trustee!

The Court found that at the date of bankruptcy, Mr. Hervias had net equity in real estate of $95,000 – far more than the total of his debts! I question whether Mr. Hervias was even insolvent at the date of bankruptcy.

His bankruptcy happened because a debt consultant, who had a cozy relationship with a LIT, recommended a bankruptcy trustee with whom no doubt a financial relationship existed.

Canadian debt solutions: Debt consultants cause harm

I have written before on the evils of the debt consulting/debt settlement industry:

  1. DEBT SETTLEMENT COMPANIES FINALLY TAKEN TO TASK IN ONTARIO – December 17, 2013
  2. HOW ADVANTAGES OF CONSUMER PROPOSALS SAVES YOU FROM DEBT SETTLEMENT COMPANIES – June 30, 2015
  3. CONSUMER PROPOSAL VS DEBT SETTLEMENT – October 1, 2015
  4. DEBT SETTLEMENT OR CONSUMER PROPOSAL CANADA: NEW CANADIAN GOVERNMENT REPORT EXPOSES DEBT SETTLEMENT COMPANIES HARMING CONSUMERS – May 3, 2017
  5. DIFFERENCE BETWEEN DEBT SETTLEMENT AND CONSUMER PROPOSAL: DEBT SETTLEMENT COMPANIES ARE PROS WHEN IT COMES TO CONS ON INSOLVENT CONSUMERS – May 10, 2017

Canadian debt solutions: Technically or temporarily insolvent?

At the time of the bankruptcy, Mr. Hervias declared some other little financial obligations including:

  • a possible debt of roughly $900 to a Recreational Vehicle park chain;
  • $213 owed to Telus Mobility from an old phone agreement; and
  • a $186 debt to Best Buy for a laptop computer that he had not repaid in full.

Mr. Hervias had assets that well surpassed his obligations. Notwithstanding, he met the technical interpretation of a bankrupt person under s. 2 of the Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) (BIA). Since the CRA had frozen his only bank account, he had no access to his income to fulfill his commitments as they came to be due.

Because he had a poor credit score, he was not able to arrange to finance on the real property he owned jointly. His wife was also not ready to consent to the financing because she was back in her homeland of the Philippines looking after her elderly mother. She asked her husband to wait until she returned to Canada.

Canadian debt solutions: Was there a realistic option for an insolvency process?

Definitely. The evidence showed that CRA would have agreed to an informal proposal, allowing Mr. Hervias time to repay his debt to CRA. As stated above, his other debts were minor. His bankruptcy was unnecessary.

This is a prime example of the dangers of debt consultants and the Trustees who are in bed with them. For the record, my Firm does not have a relationship with any debt consulting or debt settlement firm.

Canadian debt solutions: The Court’s concerns

The main concerns for the Court were:

  • did the Court have jurisdiction to annul a bankruptcy in circumstances where the bankrupt was insolvent when the bankruptcy occurred and there is no finding that the bankrupt abused the Court’s process or committed fraud on his creditors in filing an assignment in bankruptcy;
  • if the court has jurisdiction, whether it should exercise its discretion to annul the bankruptcy in this case; and
  • in granting the application to annul, whether it should be subject to payment of the trustee’s fees.

The Court determined that it was absurd that someone with considerable assets which created income would assign himself into bankruptcy. This is especially so when the main creditor is prepared to accept payment over a longer time span in amounts that the debtor can afford. The Court concluded that these circumstances were both special as well as uncommon.

Canadian debt solutions: The Court’s decision

However, just because bankruptcy ought not to have taken place, an annulment does not instantly follow. The law is clear that the bankrupt must additionally satisfy the Court that in all the conditions of the case, thinking about all the different stakeholder interests, the discretion needs to be worked out in favour of annulment. Furthermore, the jurisprudence guides the Court to think about the legal rights of the insolvent, the creditors and the public policy issues.

The Court was critical of the LIT. The Court found that prior to the assignment in bankruptcy, the Trustee should have consulted with CRA. Certainly, had he done so, he would have found out that an informal proposal was possible and there would have been no need for any insolvency process, especially a bankruptcy.

In the Court’s view, Mr. Hervias and his creditors are not harmed by an annulment, while the public interest in the integrity of the bankruptcy process is not undermined by annulling this bankruptcy under these unique conditions. Mr. Hervias’ bankruptcy was annulled according to s. 181 of the BIA. Mr. Hervias was ordered to pay the Trustee’s fee and disbursements immediately, subject to taxation.

Canadian debt solutions: Our approach

If you or your company are experiencing financial difficulties, you need a professional trustee. If yes, call the Ira Smith Team. Our approach for each file is to create an end result where Starting Over, Starting Now takes place. This starts the minute you are at our front door.

First of all, we always offer a free consultation. We listen to your issues and offer you a full range of realistic options to help you get out of debt. There have been many times where thinking about all the solutions available, we have advised debtors that they do not need an insolvency process. Rather, maybe they can avoid it by implementing an informal process. As a result, we do not earn any fees from such advice; it is just the right thing to advise and do in those circumstances to help you make total debt freedom.

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

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

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CANADIAN BANKRUPTCY DISCHARGE: CRITICAL ILLNESS INSURANCE IN A BANKRUPTCY

Canadian bankruptcy discharge: Introduction

Many times during the administration of a Canadian bankruptcy, the licensed insolvency Trustee (formerly called a bankruptcy trustee) (Trustee) comes across a novel issue. The decision of A.R. Robertson, a Registrar in Bankruptcy in Calgary, Alberta in the bankruptcy discharge application of Shirley Rose Cooke has such an issue within it.

The case is Cooke (Re), 2018 ABQB 628 (CanLII). The issue that came before the Court was, what happens to a critical illness benefit payment for the undischarged bankrupt? Does it go to the Trustee or is the undischarged bankrupt debtor able to keep it? This topic should be of interest to accountants, lawyers, insurance agents and financial planners, in addition to Trustees.

Canadian bankruptcy discharge: The issue

Registrar Robertson described this case as an “interesting application” for bankruptcy discharge. The matter was heard on July 9, 2018. Ms. Cooke is 62 years old. She filed for bankruptcy on April 12, 2016. The issue to be decided is whether a critical illness benefit payment she obtained in the amount of $25,000, forms part of her assets which fall to the Trustee. The Trustee’s position was that it is an asset of the bankruptcy Estate and Ms. Cooke’s creditors are entitled to it.

Canadian bankruptcy discharge: The facts

In March 2016, Ms. Cooke was diagnosed with breast cancer. She went through surgery and had radiation treatments until July 2016. Prior to her medical diagnosis, she worked full time as a healthcare worker. She stopped working in March 2016 as a result of her diagnosis and need to undergo surgery and radiation. She returned to part-time work at her former employer, in about August 2016.


Her evidence was that at the time that she left her full-time work, her employer informed her she had the critical illness benefit policy and that she should apply under it. Apparently, she was unaware of this policy as being part of her benefits package. She applied for the benefit payment.

When she made her assignment in bankruptcy, she did not divulge the critical illness benefit application to the Trustee. She advised the Court that she did not have any type of certainty that she would receive the benefit. Eventually, she did, in January 2017. When she did, she advised her Trustee.

Canadian bankruptcy discharge: The Trustee’s position


The Trustee took the view that the critical illness benefit payment was a component of the insolvent person’s income under s. 67 of the Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) (BIA). S. 67 of the BIA deals with property of the bankrupt, while s. 68 of the BIA deals with surplus income. However, s. 67 of the BIA does cover certain exclusions of types of payments a bankrupt may receive. The kinds of payments carved out are normally government type payments that have an overarching social aim, such as GST/HST tax credit payments.

It was very clear from the evidence that had she known she was going to get a $25,000 insurance payment from the insurance company, she would likely not have entered bankruptcy. Had she divulged the benefit application to the Trustee, the Trustee may very well have recommended she not go bankrupt.

The Trustee desires that Ms. Cooke pay the amount of $20,000 as a condition of her discharge. The Trustee states that in dealing with this critical illness benefit issue, including research, its fee now approximates that amount. I find it interesting that the Trustee is requesting the majority of her critical illness benefit payment as a discharge condition.

If the Trustee truly believes that the benefit payment should be considered as income under s. 67 of the BIA, then the correct treatment would be for the Trustee to redo its surplus income calculation under s. 68 of the BIA for Ms. Cooke. Then see what her surplus income obligation would be. If the Trustee is really trying to say the benefit payment is an asset that should come to the Trustee, then they should be asking for the entire $25,000. From my reading of the Registrar’s decision, it appears that the Trustee did neither but merely is asking for an amount to cover its costs!

Canadian bankruptcy discharge: The Registrar’s analysis


The Registrar indicated that in order to determine what is the appropriate condition if anything, he would have to assess the fees charged by the Trustee. If the Registrar really meant that he would have to tax the Trustee’s fee and costs, that makes sense. Otherwise, I am not sure what the connection is between the Trustee’s fee and costs, and whether a conditional discharge should be granted.

Ms. Cooke’s legal counsel referred to the Registrar the facts under s.173 of the BIA that could lead to an absolute discharge from bankruptcy not being granted. Her legal counsel indicated that none of the factors that would allow for a conditional, suspended or refused discharge apply in this matter.

The Registrar encouraged both parties to provide him with whatever additional information or authorities they thought appropriate by Tuesday, August 7, 2018.

The Trustee provided the Court with additional material. One such item was a copy of a letter sent by the Trustee to Ms. Cooke advising that, in the Trustee’s view, the critical illness benefit is a survivor benefit and not a wage or wage substitute. So much for it being part of surplus income!

The Registrar correctly pointed out that none of the exemptions in s. 67 of the BIA mention a critical illness benefit payment. The Registrar could also not find a precedent exactly on point.


The closest cases the Registrar could find were those of when the undischarged bankrupt suffered an injury in a motor vehicle accident and had a claim for pain and suffering. In that case, the action is personal to the injured person, and therefore that claim does not fall under the definition of property of the bankrupt available to the Trustee.

The Registrar stated that he sees no sensible distinction why a tort-based damages insurance claim for pain and suffering would be dealt with in a different way than a contract-based insurance policy for the pain and suffering Ms. Cooke had from her illness.

Accordingly, the Registrar decided that the critical illness benefit payment did not create a component of property designated to the Trustee. He also stated that Ms. Cooke did not have to pay any amount, to the Trustee. The Registrar went on to say that the Trustee should have brought on an application to have this matter determined much earlier in the bankruptcy proceedings so that the Trustee would not have incurred as many costs as it had.

The Registrar directed that:

  1. Although the Registrar did not explicitly state it in his judgment, the implication certainly is that Ms. Cooke received an absolute discharge from bankruptcy.
  2. Moreover, the Trustee should bring on the application for the Trustee’s discharge.
  3. Similarly, the Trustee should keep the Registrar’s comments as to the Trustee should have brought on a motion on the critical illness benefit issue earlier when submitting its dockets to have its fee and costs taxed by the Court.

Canadian bankruptcy discharge: Do you have too much debt?

I hope that none of us ever suffer from such a critical illness. However, it is good that Ms. Cooke had that insurance coverage. Do you have too much debt, or debt that you can’t repay because life got in your way? Illness and job loss are two prime factors in reducing someone’s income and increasing their expenses. It could force people to have to live off of credit cards until there is no credit room left, and no ability to ever repay the debt.

If you have too much debt, contact the Ira Smith Team. We have years of experience in helping those people and companies where life got in the way. Perhaps you need a debt settlement plan. Alternatively, if bankruptcy is the only real answer, we can help ease the stress and pain of bankruptcy for you.

Our approach for each file is to create an end result where Starting Over, Starting Now takes place. This starts the minute you are at our door. You’re simply one phone call away from taking the necessary steps to get back to leading a healthy, balanced hassle-free life. Call us today for your free consultation.canadian bankruptcy

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

Form 31 proof of claim: Introduction

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

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

What is the form 31 proof of claim form?

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

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

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

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

Form 31 proof of claim: Form 31

In every:

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

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

form 31 proof of claim
form 31 proof of claim

Form 31 proof of claim: Acceptability of proof of claim

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

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

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

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

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

Does a creditor have to file a claim?

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

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

Form 31 proof of claim: My example

CLICK HERE TO SEE AND DOWNLOAD PROPERLY COMPLETED

FORM 31 PROOF OF CLAIM

form 31 proof of claim
form 31 proof of claim

Can I file a proof of claim after the deadline?

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

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

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

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

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

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

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

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

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

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

Form 31 proof of claim: Do you need help?

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

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

form 31 proof of claim
form 31 proof of claim

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

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AVERAGE CANADIAN NET WORTH 2018: MIDLIFE WEALTH SHOCK MAY LEAD TO DEATH

average canadian net worth 2018
average canadian net worth 2018

If you would prefer to listen to the audio version of this average Canadian net worth 2018 blog, please scroll down to the bottom and click on the podcast.

Average Canadian net worth 2018: Introduction

According to the most recent Statistics Canada report published in 2017. The Survey of Financial Security, the median net worth of Canadian families was $295,100. That is the latest federal government official statistic we have in determining the average Canadian net worth 2018.

There’s always been talk about how a financial crisis can adversely affect your health but now a new study published in the Journal of the American Medical Association suggests that wealth shock may actually shorten your life.

Average Canadian net worth 2018: What is wealth shock?

Researchers defined wealth shock as a loss of 75% or more in financial value over two years. The average loss was about $100,000. This catastrophic financial crisis could include a drop in the value of investments or realized losses like home foreclosure. The effect was more marked if the person lost a home as part of the wealth shock, and it was more pronounced for people with fewer assets.

Average Canadian net worth 2018: How does wealth shock affect your life expectancy?

Researchers analyzed 20 years of data from the Health and Retirement Study, which checks in every other year with a group of people in their 50s and 60s and keeps track of who dies.

  • Wealth shock was tied to a 50% greater risk of dying
  • Middle-aged Americans who experienced a sudden, large economic blow were more likely to die during the following years than those who didn’t
  • Women were more likely than men to have a wealth shock
  • Wealth shock crossed socio-economic lines, affecting people no matter how much money they had to startira smith bankruptcy trustee vaughan

Average Canadian net worth 2018: This is really a story about everybody

Although this study was conducted in the U.S., “This is really a story about everybody,” said lead researcher Lindsay Pool of Northwestern University’s medical school. “Stress, delays in health care, substance abuse and suicides may contribute”, she said. North or south of the border, we’re all in equal danger. According to Dr. Alan Garber of Harvard University in an accompanying editorial, the findings suggest a wealth shock is as dangerous as a new diagnosis of heart disease. He also noted that doctors need to recognize how money hardships may affect their patients.

Average Canadian net worth 2018: Don’t wait until you’re a wealth shock statistic

Please don’t wait until you’re a wealth shock statistic. If you’ve experienced wealth shock or are experiencing financial hardship, don’t jeopardize your health. Contact a professional today.

Ira Smith Trustee & Receiver Inc. is full-service insolvency and financial restructuring practise serving companies and individuals throughout the Greater Toronto Area (GTA) facing financial crisis or bankruptcy that need a plan for Starting Over, Starting Now.

We approach every file with the attitude that corporate or personal financial problems can be solved. That is as long as you take immediate action with the right plan. We’re just a phone call away and we can set you back on a path to financial health.

AVERAGE CANADIAN NET WORTH 2018
AVERAGE CANADIAN NET WORTH 2018
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SMALL BUSINESS LOANS CANADA CASE STUDY: LOSING YOUR MONEY IS NOT FUNNY

1st Global Capital

Small business loans Canada: Introduction

Today I am going to be telling you a story about a US corporate bankruptcy, and then a case study of our own. The purpose is to illustrate how you need to understand all the risk factors as a private small investor in making small business loans Canada.

Small business loans Canada: 1st Global Capital bankruptcy

A $283 million corporate US bankruptcy has derailed many retirement plans. It has left many investors in a financial crisis. In one case, a small inheritance was invested. In another, a cash award granted by a Court was invested. These are just two of the investor stories coming out of the US bankruptcy case of 1st Global Capital of Hallandale Beach, Florida.

1st Global Capital describes itself this way:

“1st Global Capital is an industry-leading direct funder with the professionalism, flexibility and fast turnaround you need to maximize your success. We use our years of industry experience, our funding power and our technological expertise to empower Independent Sales Organizations (ISOs) and Partner’s like you to maximize your business opportunities. Behind every 1GC deal is the expert vetting and oversight from our team of funding professionals with over 50 years of combined underwriting experience.”

Small business loans Canada: The “memorandums of indebtedness”

1st Global Capital was created 5 years ago to fund small companies. It funded loans to small businesses throughout many states in the USA. Examples of the types of businesses it funded are dining establishments, retail stores, construction businesses, healthcare, and e-commerce companies.

They raised money by issuing “memorandums of indebtedness” to people who invested with 1st Global Capital. Many used retirement savings accounts to fund their investment. 1st Global Capital used commissioned agents in many states to sell the 1st Global Capital investment opportunity. These short-term deals were supposed to pay back with interest at the end of nine months.

Small business loans Canada: The risky loan products

1st Global Capital was an alternative lender. It’s loan products included:

  • Merchant Cash Advances
  • Specialty Funding Options
  • Asset Based Lending
  • Accounts Receivable Funding

By its very nature, this was risky lending to businesses that could not obtain more traditional bank financing. The investors were wooed by promises of high returns, but I am certain they did not really understand they were making unsecured loans to a company that placed the money into risky loans.

Small business loans Canada: The small investors

Bankruptcy documents indicate greater than 4,000 1st Global Capital accounts existed across the country at the date of bankruptcy. Numerous are individual retirement accounts, each owed in between $621,000 and $922,000.

Court records indicate that 1st Global Capital stated that the cause of its bankruptcy was examinations by the Securities and Exchange Commission as well as the U.S. attorney’s office in southern Florida over alleged securities violations.

As a result, the inflow of money from investors stopped when 1st Global Capital could no longer offer its memorandums. The bankruptcy files show that as a result, the company dealt with an unexpected and intense liquidity situation. The regulatory agencies state that 1st Global Capital was selling securities and the company was subject to government registration with and oversight by government regulatory agencies.

The bankruptcy records do not indicate this but I am certain that eventually, the bankruptcy trustee will report that the investment scheme was a Ponzi scheme. If the inability to take in more loans caused the company’s bankruptcy, it is obvious that they required fresh money in order to honour their existing liabilities. New investors’ money paying back older investors is a classic definition of a Ponzi scheme.

Small business loans Canada: Our very own Canadian case study

Not understanding what you are investing in is not a story unique to the United States. Let me tell you about one of our case studies from last year called Vaughan Crossings Inc (“VCI”). We were appointed by the Court as Receiver of the assets, properties and undertaking of VCI. The main asset of VCI was 5.5 acres of owned development land located at the northwest corner of Dufferin and Centre Streets in the City of Vaughan, ON. In this receivership, our main role was to sell these lands. You can find all the Court records and public information on our webpage that we set up for VCI, so I won’t go through the history of the file in this Brandon’s Blog.

The important point in this file is that the second mortgagee was a group of investors. These investors were found through the use of commissioned agents. These agents were mainly financial advisors and insurance agents. The agents made commissions to raise funds from their clients for investment in this project. Just like in the 1st Global Capital case, the investors were mainly individuals, many of whom used funds in their RRSPs to make the loan.

Small business loans Canada: The dangers of not understanding risk

During the receivership, I had the chance to speak with many investors who called in wanting to know the status of their investments. These unsophisticated people were wooed by the promise of high returns when the project was fully built out. Just like in the 1st Global Capital case, the mortgage syndicator had to cease raising funds as they were being investigated by the Financial Services Commission of Ontario. Ultimately, the mortgage syndicator went into receivership also.

The money put in by this unsophisticated investor group was secured by way of a second mortgage. The developer ran out of cash to develop the property. The mortgage syndicator was shut down. The lands were not be developed. The plan was that the mortgage syndicator was going to do another round of financing to provide construction financing, which would be in priority to the second mortgagee! The mortgage syndicator had the authority, acting as trustee of the second mortgage, to subordinate that mortgage to the construction financing. However, that never happened.

Small business loans Canada: The receivership

Without construction financing, the development project could not continue; hence our appointment as Receiver. There two mortgages against the property and numerous construction liens filed and perfected against the property. We obtained our appraisals and ran a receivership sales process. We sold the property for much more than its appraised value. The sales price repaid the construction liens and the first mortgage. However, there was very little available for the second mortgagee investors.

The promise of a high-interest rate wooed these investors. They may not have been as focussed on the safety of their capital. Unfortunately, these small investors did not understand the risks associated with this type of loan they were making. Shame on their financial advisors who sold them this investment, knowing it was not right for most of them. The financial advisors were hungry for commissions, regardless of what harm may come to their clients.

Small business loans Canada: Is your business at risk?

If your small business is having financial problems, more small business loans alone is not the answer. You must first look at all aspects of your business. First, you should look at the viability of your business.

Are there expenses that need cutting and activities that you must do that can generate more revenue? If so, perhaps we can restructure your business. You may not need a long-term small business loan. Perhaps a short-term loan to get over the immediate financial hurdle you are facing is enough.

If you are looking for ways to restructure your corporate or personal debt call Ira Smith Trustee & Receiver Inc. We understand the stress and pain your financial problems are causing you. We feel your pain and we can end it for you.

Our strategy for every single business and person is to develop a result where Starting Over, Starting Now comes true, starting the minute you walk through our door. You’re just one call away from taking the necessary actions to get your debt settlement and back on the road to leading a healthy and stress-free life. Contact the Ira Smith Team today.small business loans canada

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WHY AREN’T BABY BOOMERS IN CANADA RETIRING?

8baby boomers in canada

Baby Boomers in Canada: Introduction

Baby Boomers in Canada are not retiring like the generations before them. As we discussed in a recent blog, there are many good reasons to keep working beyond age 65. Although Baby Boomers are the generation that has already reached aged retirement age or are fast approaching it (Baby Boomers are born from 1946 – 1965), many of them are not financially able to retire.

Baby Boomers in Canada: Franklin Templeton Investments Canada study

According to a study conducted for Franklin Templeton Investments Canada:

Baby Boomers in Canada: Canada Pension Plan (CPP)

There is good news for Baby Boomers relying on government pensions. According to the Government of Canada, up until 2019, the CPP retirement pension replaces one-quarter of your average work earnings. This average is based on your work earnings, up to a maximum earnings limit each year. Other sources of income—such as the Old Age Security program, workplace pensions, and private savings—make up the rest of your retirement income.

Beginning in 2019, the CPP will begin to grow to replace one-third of your average work earnings. The maximum limit used to determine your average work earnings will also gradually increase by 14% by 2025.

As a result, pension amounts will increase by more than 33%. Your pension will increase based on how much and for how long you contribute to the enhanced CPP. You will get the full increase if you contribute to the enhanced CPP for 40 years.

The enhancement also applies to the CPP post-retirement benefit. If you are receiving the CPP (or QPP) retirement pension and you continue to work and make CPP contributions in 2019 or later, your post-retirement benefits will be larger.

Baby Boomers in Canada: Many just want to work

In addition to the financial benefits, many Canadians prefer to keep working beyond the retirement age. Work provides a sense of accomplishment, a social environment, keeps the mind sharp and the body active.

Baby Boomers in Canada: Are you a Baby Boomer who’s still paying off debt?

However, if you’re one of the Baby Boomers who’s still deep in debt, you need professional help now. Although your situation may feel hopeless, there are solutions to every problem with immediate action and the right plan.

Ira Smith Trustee & Receiver Inc. has helped many people just like you throughout the GTA. We can help you get back on your feet and give you back peace of mind. Give us a call today and Starting Over, Starting Now you can put your struggles behind you.

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CONSUMER PROPOSAL OR BANKRUPTCY: LIST OF MY CREDITORS FOR CONSUMER PROPOSAL

Consumer proposal or bankruptcy: Introduction

We always perform an initial free consultation with people thinking about filing either a consumer proposal or bankruptcy. People ask me, what if I can’t create a list of all my creditors?

Consumer proposal or bankruptcy: A refresher

If you are a regular reader of my Brandon’s Blog, then you know the difference between a consumer proposal vs bankruptcy. For those of you who need a brief refresher, both the consumer proposal and bankruptcy are different processes under the Bankruptcy and Insolvency Act (Canada) (BIA). To file either one, the person must be insolvent. That means that they cannot meet their liabilities as they become due and if they liquidated all their assets, it would not produce enough cash to pay of all the debts.

Consumer proposal – This is a restructuring process to avoid bankruptcy for any person who owes $250,000 or less, not including any mortgage or line of credit debts secured by a mortgage registered against their home. The purpose of a consumer proposal is to AVOID bankruptcy.

Division I proposal – This is a restructuring process for people who owe too much money to fit under the consumer proposal rules. A company can also reorganize under this section of the BIA.

Bankruptcy – If a person cannot successfully carry out a restructuring proposal but requires relief from their crushing debts, then they would file for bankruptcy. In this process, subject to certain provincial exemptions, you would hand over your assets to the licensed insolvency trustee (Trustee). The Trustee would then sell the assets for cash, call for your creditors to file a proof of claim with the Trustee and then distribute the money according to the rules of the BIA.

Consumer proposal or bankruptcy: A common question

Regardless of whether the person is thinking about a consumer proposal, Division I proposal or bankruptcy, a common question is: (i) what if I don’t know who all my creditors are; or (ii) what if I leave off some creditors from my sworn statement of affairs; or (iii) do I have to list all of my creditors?

Some of our clients come to us, tell us that they don’t even know who their creditors are. Sometimes it’s been such a long time that they don’t even receive the bills or notices anymore and their memories aren’t good enough. So here is an easy hack so that you can put together a list of most, if not all, of your creditors.

Consumer proposal or bankruptcy: The easy hack

We will add CRA to your statement of affairs. If you don’t know how much you owe them, we will put them in showing either “$1” or “Unknown” as a placeholder

Every person must file an income tax return. Most people know whether they are current or not in their tax filings. So Canada Revenue Agency (CRA) should always be listed.

CRA cannot file an accurate proof of claim if you have not been current in your income tax filings. So we tell everyone to file all outstanding tax returns and provide us with a copy before filing either a consumer proposal or bankruptcy.

Pull your credit report

You may obtain your credit report from either Equifax or TransUnion. Your credit report will list all those who you owe money to and who wanted to update their files with your new credit score. We will add those creditors to your statement of affairs also.

Check your mail and save the bills

No doubt your creditors will keep mailing your statements. Even if all it says is balance forward unpaid, or is from a collection agency or lawyer, it will list their address, their name and the amount they say you owe. We will put that information on your statement of affairs.

Your lawyer can easily do an execution search. This search will show who holds a judgement against you and some basic details. We will add those details to your statement of affairs.

Consumer proposal or bankruptcy: The test is due diligence, not perfection

The test is, did you use your best efforts to identify all of your creditors on your sworn statement of affairs. It is very rare that any of our clients know exactly how much they owe. It is normal for the amounts according to the sworn statement of affairs to be different from the proofs of claim filed. That is OK.

Sophisticated large creditors pay the Superintendent of Bankruptcy to get a download of insolvency filings on a regular basis. They match the names of those who have filed against their client database. If a client shows up that they did not have listed as having filed, they contact the Trustee. Once they contact us, we send them a creditor’s package. They will then be able to further check their records and if owed money, can file a proof of claim.

We had a client who said they mistakenly left off a few creditors in their proposal filing. Those creditors found out. All those creditors had judgements against the person who filed the restructuring proposal. These creditors were very mad at being left off the list, although they did not suffer any damages.

It made it much tougher for the person and us to get a deal struck with all the creditors. At the end of the day, a deal was struck and the person is currently performing and is currently making their payments under the restructuring proposal. The anger of these creditors rubbed off on creditors who would have otherwise been happy with a lesser proposal. So in the end, leaving these creditors off the initial sworn statement of affairs just cost them more money!

Consumer proposal or bankruptcy: Corporate filings

In terms of a corporation filing either a restructuring proposal or bankruptcy, we normally don’t incur the same issues. A company will have an accounting department and/or an accounting system. They will be able to produce a list of creditors. The amounts shown may not be current, but the list of names and addresses will be reasonably accurate.

However, the easy hack I described above also works for a company.

Consumer proposal or bankruptcy: More free stuff

I hope that you have found my free easy hack useful to answer the question of how to create a list of all my creditors. You can use it if you wish to do proper budgeting, which everyone should do. You don’t have to wait until you are insolvent!! With proper budgeting, you can avoid insolvency and therefore bankruptcy.

If you have too much debt and need someone to talk to about consumer proposal vs bankruptcy, call the Ira Smith Team. We will listen to your issues and provide you with our thoughts and recommendations for free. That’s right; a free initial consultation. So why not? All you have to lose is your stress. We will advise you whether or not we think you are a candidate for either a consumer proposal or bankruptcy. If we feel you can solve your financial problems without an insolvency process, we will tell you straight.

The Ira Smith Team understands the stress you are under and the pain it is causing you and your loved ones. We can eliminate your pain. I guarantee that you will start feeling better right away after our free initial consultation. Taking action after that will put you on the right path, Starting Over Starting Now.

consumer proposal or bankruptcy

 

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TORONTO CONDO MARKET REPORT: SUBPRIME LENDERS DODGING CANADA’S MORTGAGE RULES?

toronto condo marketToronto condo market report: Introduction

The subprime lending industry is alive and well in Canada; that is the subject of this Toronto condo market report. In fact, subprime lenders hold almost 8% of Canadian mortgages, which is a hefty 37.8% increase compared to the same quarter last year. And, this is the sixth consecutive quarter we saw the subprime lending industry grow. It’s now at its highest level in 10 years. Although many pundits blame the spike in prime lending to the new mortgage stress tests, it’s clear that this trend began years before stress testing was introduced.

Toronto condo market report: What are subprime loans and how do you get one?

  • Any loans that are for borrowers that do not have a good credit score
  • They’re done through private lenders, typically accessed through a mortgage broker
  • Private lenders are not federally regulated like the banking industry
  • Private lenders charge steep prices

Toronto condo market report: Why do people take subprime loans?

You may be asking why anyone would take a subprime loan and pay considerably more money than they would at a bank.

  • Transunion estimates that 11.9% of the 28.4 million Canadian consumers with credit profiles are subprime which means that they wouldn’t qualify for a mortgage from the bank
  • A borrower with excellent credit might resort to a subprime loan because the bank won’t lend them as much money as they need
  • Even a person with bad credit or no credit, there is a private lender willing to give a subprime loan

Toronto condo market report: How is subprime lending affecting Toronto’s condo market?

For some reason known only to the government, they don’t track subprime lending. CIBC Economics show that over:

  • 1 in 10 Toronto condos registered in 2017 was attached to astronomically high mortgage rates
  • 17.4% of owner-occupied condos registered in 2017 had a mortgage rate above 9%
  • 16.2% of condo investors with units that registered last year were paying more than 9%

Toronto condo market report: What’s going to happen if the market starts to soften?

The problem with paying astronomically high-interest rates is what’s going to happen if the market starts to soften? How will these condo owners with subprime loans get their money out, let alone make a profit?

The mortgage stress tests are in place for a very good reason. To ensure that Canadians don’t buy houses or condos that they can’t afford. Trying to avoid the system by going to private lenders and paying high-interest rates can put you in a financial danger zone.

Toronto condo market report: Are you in a financial bind?

If you’re in a financial bind because you’re living in a property that you can’t afford, or for any reason, you need professional help now. With a cumulative 50+ years of experience, the Ira Smith Team has helped people just like you who are facing a financial crisis. Give us a call today. We can help you overcome your financial difficulties Starting Over, Starting Now.

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DEBT RELIEF CANADA: CAN YOU DIPLOMATICALLY AVOID BANKRUPTCY?

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Debt relief Canada: Introduction

This is always a hot topic. I am asked often how does debt relief Canada work? I recently wrote blogs about professional athletes who made a lot of money in their careers and who are now broke, or worse, bankrupt.

I am going to tell you about former tennis star Boris Becker. He is trying to avoid bankruptcy, diplomatically.

First some background information. The inviolability of diplomats is among the oldest rules of international law. During the Greek Empire, it was unlawful to abuse, apprehend or detain a country’s agent. In contemporary times, there is polite resistance from court territory as a matter of global regulation. The purpose of this is to make certain the reliable efficiency of diplomatic features preventing the holding authority from intervening with the diplomat’s job.

Debt relief Canada: Diplomatic immunity

Diplomatic immunity separates into 3 categories. The resistance of the consular office properties and residential properties. The buildings, cars, archives and diplomatic communications. While the holding authority has a task to shield the diplomatic properties from any type of damages, the embassy remains immune from any kind of law enforcement actions. The authorities cannot enter the consular office other than to safeguard human life for instance of a severe emergency.

The 2nd kind is within the premises. The resistance of the employees functioning in the consular office from the local court’s jurisdiction. Mediators are immune from any kind of type of law enforcement like arrest, search as well as apprehension.

The 3rd kind is that the diplomat, as well as his/her family members, are additionally immune in the hosting country from paying taxes other than the settlement for solutions like electricity or water.

Article 29 of the Vienna Convention on Diplomatic Relations states that diplomatic immunity could only be forgoed by the sending out government.

Debt relief Canada: The Boris Becker story

It likely raised a few eyebrows when Boris Becker revealed he was pursuing a 2nd profession in diplomacy In April 2018 as the Central African Republic’s attaché for Sports/Humanitarian/Cultural Affairs in the European Union.

The statement came while Becker had a claim made against him over a loan he presumably owes to exclusive financial institution Arbuthnot Latham, after the sports celebrity’s bankruptcy in 2017. His lawyers claim that his diplomatic function grants him immunity under the 1961 Vienna Convention on Diplomatic Relations. They state this indicates he cannot be subject to any kind of lawful procedure in the courts of any nation. Additionally, they say this protection is for as long as he stays an identified diplomatic representative.

The Boris Becker method of debt relief

His legal representatives have also provided those claims to Britain’s High Court, saying that British Foreign Secretary Boris Johnson in addition to the Central African Republic would need to decide whether any kind of suits could continue. This takes the bankruptcy of a previous tennis star transforming it into a politically delicate matter. The Court process against Becker might lead various other countries can potentially make use of the situation. In the same fashion British diplomats abroad could lose immunity if certain countries wished to make a point.

Becker’s defence method has actually likewise set off inquiries over his motivations as well as timing in accepting a polite duty with the Central African Republic— a nation in the midst of a bloody civil conflict and humanitarian situation. It appears now the Republic has more important matters to focus on. Its social and sporting activities ties to Europe cannot be a current priority.

The former tennis champ condemned the choice to start bankruptcy procedures versus him as unjustified and unjust and introduced he would look for payment for the totally unneeded affirmation of bankruptcy that he was pushed into.

Debt relief Canada: The precedent story of Sheikh Walid Juffali

The Article 29 of the Vienna Convention on Diplomatic Relations I previously referred to, has actually long been controversial. In 2014, the little Caribbean island of Saint Lucia named Saudi business owner Sheikh Walid Juffali its irreversible representative. Moreover, this appointment occurred after his former spouse Christina Estrada separated from him and instituted divorce proceedings.

Britain’s High Court ruled that his diplomatic status was totally fabricated. Britain’s Foreign Office slammed the judgment when stating it can result in problems with British diplomats’ immunity abroad. The Court said that Sheikh Walid Juffali, a permanent resident of Britain, is not protected by his diplomatic status. Estrada’s award was about $100 million.

Applying the very same reasoning in Becker’s instance would negate any diplomatic immunity claim by the long-time British homeowner.

What if you can’t claim diplomatic immunity?

Boris Becker’s uses a very novel and entertaining defence to avoid lawsuits to recover debts. However, most of us don’t have the ability to get diplomatic status from a country and then claim immunity. We deal with creditors suing us on our debts. We have to take a less dramatic and more common sense approach. Here is my list of options for those looking for debt help in Canada.

Debt relief Canada: Credit counselling

This addresses debt troubles without bankruptcy and supplies you with the skills to live debt totally free. Credit counselling solutions consist of budgeting, just how to use debt intelligently, restoring credit as well as debt management programs.

Debt management programs are developed to aid you to settle your debt. You enlist willingly in a debt monitoring program; the court did not mandate it. When you enlist a credit counsellor will call your financial institutions and ask for their collaboration in minimizing your debt. Your creditors could agree in ways like minimizing the amount of debt owing. A debt management program cannot cover all debts. It cannot cover secured debts. A mortgage, line of credit registered against your home or an auto loan are examples of debts not covered.

Debt relief Canada: Debt consolidation

Debt consolidation is getting a loan that enables you to settle your financial debts to a number of or all your unsecured creditors, leaving you with simply one loan. Usually, this approach is ideal to deal with your unsecured debts. The theory is that the debt consolidation loan will have a lower annual interest rate than many of your unsecured debts.

Debt relief Canada: Proposals

Consumer proposals and Division 1 proposals are alternatives to bankruptcy. Although similar in many areas, there are some major distinctions. Consumer proposals are readily available to people whose overall financial debts do not go beyond $250,000, not consisting of debts secured by your house. Division 1 proposals are for both companies as well as people whose financial obligations go beyond $250,000 (excluding the mortgage on their primary residence).

Proposals are governed by the Bankruptcy and Insolvency Act (BIA). Collaborating with a licensed insolvency trustee you make a proposal to:

✥ Pay your creditors a percentage of what you owe them over a certain
 amount of time, without any interest

✥ Extend the time you need to repay the debt

✥ Or a mix of both

Proposal payments are made to your trustee. The trustee uses that money to pay each of your creditors. You can take up to 5 years to complete a proposal.

The last resort: Bankruptcy

As a last resort, you can declare bankruptcy. The Government of Canada licences and supervises us. We can look at your circumstance and discuss with you the options available to you to avoid bankruptcy. We can also advise you what is involved in the bankruptcy option and administer it for you.

Do you have too much debt?

I can’t provide you diplomatic immunity from your debts. However, If you’re thinking about a consumer proposal or are looking for ways to end your financial debt, or you need CRA debt forgiveness, call Ira Smith Trustee & Receiver Inc. We understand the stress and pain your financial problems are causing you. We feel your pain and we can end it for you.

Our strategy for every single person is to develop a result where Starting Over, Starting Now comes true, starting the minute you walk through our door. You’re just one call away from taking the necessary actions to get back on the road to leading a healthy and stress-free life.

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