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COMFORTABLE RETIREMENT LIVING: YOU NEED A PLAN TO SAVE TODAY TO HAVE A COMFORTABLE RETIREMENT INCOME

comfortable retirement livingComfortable retirement living: Introduction

We all want a comfortable retirement living but many Canadians haven’t got a clue how to make that happen. Your financial health is never a matter of chance, unless you’re a big lottery winner; it takes careful planning and you need to make saving a habit. All the retirement blogs say so.

I can see many of you rolling your eyes now and wondering how you’re supposed to think about saving when you’re trying to make ends meet. But, without a plan your financial situation will never change.

Comfortable retirement living: You need a comfortable retirement budget

Are you thinking about your retirement? If not, now is the time. Research has shown that people who have a plan often save more money and are financially healthier than those who don’t.

  • Those who thought about retirement — “a lot,” “some” or even “a little” — approached retirement age with twice the wealth of non-planners (2007 Pension Research Council study)
  • Simply using a retirement calculator increased someone’s likelihood of saving (Journal of Consumer Affairs in 2011)
  • Parents who created a plan to pay for their children’s college educations saved 76% more than parents who saved but didn’t have a plan (Sallie Mae’s How America Saves for College 2016 report)
  • Households that plan for large, irregular expenses are 10 times as likely to be financially healthy as those that don’t (Center for Financial Services Innovation study in 2015)

Comfortable retirement living: What is financial health?

What exactly does financial health mean? The Centre for Financial Services Innovation has described financial health as having emergency and retirement savings, sustainable debt loads, good credit scores and property, life and health insurance. Are you financially healthy?

Comfortable retirement living: What is a comfortable retirement definition?

How do you define comfortable retirement? CANSTAR Pty Limited, a privately owned Australian research agency that provides finance comparison services, has what I think is a very good definition:

“…one which enables an older, healthy retiree to be involved in a broad range of leisure and recreational activities. It allows funding for private health insurance, a reasonable car and regular holidays (domestic and occasionally international)…”

Comfortable retirement living: How can you become financially healthy?

Everyone needs a plan – not just for retirement, but for more immediate goals like having enough for the monthly expenses. A financial plan always involves a budget and I can’t stress enough how important a budget is.

Once you have a plan in place you can start saving. It doesn’t have to be huge amounts of money, but just enough to start making saving a habit. Start building a little emergency fund. Once you follow the plan and make saving a habit, you’ll be well on your way to financial health.

If you’re struggling with debt and can’t see a way out, contact Ira Smith Trustee & Receiver Inc. We’re licensed trustees who are experts in helping people just like you get back on your feet Starting Over, Starting Now. Give us a call today and with the right plan you too can be financially healthy again.3bestaward

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NEW MORTGAGE RULES NOVEMBER 2016: HALLOWEEN GHOSTS AND GOBLINS FOR BORROWERS?

new mortgage rules ontario, new mortgage rules canada down payment, new mortgage rules November 2016, new mortgage rules, consumer debt, mortgage rate stress test, stress test, private lenders, shadow lending market, subprime lenders, trustees, ira smith trustee, the new mortgage rules

New mortgage rules November 2016

New mortgage rules November 2016: Introduction

New mortgage rules November 2016 come into effect. We recently discussed Canada’s alarming consumer debt and the housing boom. The government stepped in to prevent Canadians from assuming bigger mortgages than they could afford. One of the measures recently put into effect was a mortgage rate stress test for approving high-ratio mortgages.

New mortgage rules November 2016: Mortgage rate stress test

This stress test is now applied to all insured mortgages to prevent defaults in the future should the mortgage rates rise. Buyers applying for an insured mortgage now have to show they can afford to pay it back at the Bank of Canada’s five-year fixed rate of 4.64%. This means that some Canadians who could have qualified for a mortgage before the stress test will no longer qualify.

New mortgage rules November 2016: Can Canadians avoid the mortgage rate stress test by borrowing in the shadow lending market?

Some mortgage brokers who are clearly disgruntled at the thought of the Canadian mortgage rules forcing them to lose business have worked out a way to bypass the stress test and beat the system by sending their clients to private lenders – also called the shadow lending market or subprime lenders. Buyers borrow money from private lenders so that they can make a 20% down payment which qualifies them to take out an uninsured mortgage, therefore there is no stress test required.

New mortgage rules November 2016: Is it a good idea to borrow from private lenders?

Typically, private second mortgages in Toronto charge a minimum interest rate of 7% – 10%. For people who really want to be home owners it may seem like a good idea, but they’re going to be left with a very high mortgage payment; perhaps higher than they can afford to pay in the long run.

The new mortgage rules November 2016 and programs like the mortgage rate stress test are enacted to protect Canadians, not punish them. Thinking that you can beat the system doesn’t make sound financial sense.

New mortgage rules November 2016: Do you have too much debt?

Have you assumed a mortgage that you can’t afford to pay? Are your mortgage payments stopping you from paying your other debts? Don’t let these ghosts and goblins scare you.

Contact Ira Smith Trustee & Receiver Inc. today. Our team of professional trustees can help you manage your financial crisis and get you back on your feet Starting Over, Starting Now.

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HOW AVOIDING CREDIT CARD DEBT CAN ACTUALLY HURT YOU!

avoiding credit card debt, credit card debt, household debt, debt, bankruptcy, assignment into bankruptcy, trustee, trustees, credit cards, budget, budgeting, ira smith trustee

Avoiding credit card debt can hurt you? Are you crazy?

Avoiding credit card debt is certainly something we always counsel. We’ve addressed the dangers of credit card debt on several occasions. More recently we’ve discussed the issue of how credit card debt is contributing to the skyrocketing household debt that many Canadians are facing. However, today we’d like to bring to your attention to an instance where avoiding credit card debt can actually be a bad thing!

Many fitness clubs and studios give huge discounts if you pay your yearly (or longer) membership up front and in full. Financially, it makes good sense to take advantage of these offers. Typically you have the option of paying by credit card, cheque or debit/cash. Few people seem to pay for anything by cheque these days, with credit or debit being the norm. As you will soon see, paying for these types of memberships with a credit card can be a source of protection for the consumer.

Paying for memberships by credit card and not avoiding credit card debt actually helps the consumer

A local downtown yoga studio recently closed its doors without any notice to its members. The closure was unceremonious and on a Monday morning members’ yoga mats were left strewn outside the locked door. Members were at a loss to understand why as the studio appeared to be busy and continued to sell long-term memberships right up to the closure. Unfortunately for members who paid by cash, debit or cheque, recovering their money may not be possible; and if it is, the process will be arduous. However, members who paid with a credit card do have recourse. As of yet there has not been a formal assignment into bankruptcy but regardless, given that the permanent closure of the studio can be proved, the credit card companies will dispute the charges. The consumer will not have to pay for the membership not received.

What if you aren’t avoiding credit card debt and can’t repay it?

We’re certainly not advocating that you start amassing credit card debt. However, there are instances where if you’ve been budgeting correctly and can afford to pay your credit card bills in full and on time, that it makes sense to use your credit card and you don’t have to worry about avoiding credit card debt. If you’re like many Canadians who are struggling with debt from credit cards and/or other sources, contact Ira Smith Trustee & Receiver Inc. We’re professional trustees who are experts in dealing with debt. Living a financially healthy life is possible with professional help. You’re one call away from living a debt free life Starting Over, Starting Now.

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HOW HOARDING CASH DOES NOT ALWAYS LEAD TO GOOD DEBT FREE LIVING AND RETIREMENT INCOME PLANNING

debt free living, retirement income planning, ira smith trustee, hoarding cash, stock market, resource industries, CIBC World Markets, cash holdings, low-yield bonds, GICs, debt, debt load, retirement, trustees, trusteeDoes hoarding cash = debt free living?

Debt free living is certainly elusive for many Canadians. We have grown fearful about the volatility of the stock market and the future of the resources industries. As a result, instead of investing they are hoarding cash. According to a recent report from CIBC World Markets:

  • Canadians are holding a record $75 billion in extra cash that would have normally been invested
  • $75 billion represents almost 10% of the total value of overall personal liquid assets in Canada
  • Personal cash positions were at a record high at the end of 2015
  • Cash holdings are up 11% over the past year
  • The rise in cash holdings is attributed to risk aversion
  • People 35 years old and younger hoarded the most money, as a proportion of their total wealth
  • Notwithstanding all this extra cash, Canadians have the higher debt per capita of all time and have not allocated any of the cash for debt free living

How can hoarding cash effect your retirement?

Low-yield bonds and heavy debt loads may leave you coming up short in retirement, which is becoming more expensive to fund. According to CIBC deputy chief economist Benjamin Tal, many older people, 60, 65 and 70 need to be in the stock market to get a reasonable return. Just GICs will not do because interest rates are so low. Yet it’s a vicious cycle; the TSX has fallen 6.7% since the beginning of the year and is at a two-year low.

We can help with your debt free living plan

We can’t stabilize the stock market, nor can we positively impact the future of the resource industries. But, we can help with debt. The Ira Smith Team is comprised of professional trustees with a cumulative 50+ years of experience dealing with diverse issues and complex files. Your heavy debt load is something we can manage with immediate action and the right financial plan. You can’t have a carefree retirement dragging around a mountain of debt but with one phone call you can be on your way to a debt free retirement Starting Over, Starting Now. Don’t delay. Contact us today.

 

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7 REASONS WHY CANADIANS LIVING PAYCHEQUE TO PAYCHEQUE

Canadians living paycheque to paycheque, living paycheque to paycheque, debt, budget, balanced budget, trustees, trustee, Canadian Payroll Association, paycheck to paycheck, living paycheck to paycheck in america, more and more Canadians living paycheque to paycheque, not receiving their paycheque, Ira Smith Trustee & Receiver Inc., starting over starting now, how to stop living paycheque to paycheque, budget, Vaughan bankruptcy trustee, Vaughan bankruptcyMore and more Canadians living paycheque to paycheque (and people are also living paycheck to paycheck in America)

The results of a new survey released by the Canadian Payroll Association were quite frankly alarming.

  1. Almost half of people polled said they are Canadians living paycheque to paycheque and would find it difficult to meet their financial obligations if their pay was delayed by just a week resulting in their not receiving their paycheque on time
  2. Less than 25% of respondents said they could probably not come up with $2,000 if an emergency arose within the next month
  3. 36% per cent of working Canadians said they felt overwhelmed by their level of debt
  4. 12% per cent doubted they’ll ever be debt free
  5. 75% of working Canadians polled reporting having put aside less than 25% of the money they expect to need in retirement
  6. 35% of respondents expect to work longer
  7. 20% of employees surveyed said they will need to work four years or more than they originally expected before retiring, citing a lack of sufficient savings as the main reason

How to stop living paycheque to paycheque – behaviour modification

Although this situation is nationwide, it’s worse in Ontario, British Columbia and Atlantic Canada. Can the Canadians living paycheque to paycheque problem be cured with a change in spending habits? According to BMO’s 2015 Psychology of Savings Report, it is.

The report shows a majority of Canadians, or 88% of respondents polled, said they are willing to improve their current financial status. However, 38% also admitted that they have developed bad spending and savings habits and 31% said they’re not willing to let go of them.

Consult your Vaughan bankruptcy trustee

As professional trustees we recognize and preach the importance of a balanced budget. In fact we published two blogs on the subject.

If you’re like many Canadians living paycheque to paycheque, it’s time to put an end to the constant struggle. Contact Ira Smith Trustee & Receiver Inc. today. We can help to restore you to financial health with a balanced budget and a plan for healthy financial living Starting Over, Starting Now.

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SHADOW LENDING MARKET: WHY JEWELLERS MAKING MORTGAGE AND CAR LOANS ARE AFRAID OF THE TRUTH

alternative lenders, shadow lending market, shadow lending market Canada, shadow lenders, shadow lenders Canada, credit score, bankruptcy questions, bankruptcy, bankruptcy alternatives, trustee, trustees, full recourse mortgage, Shadow Mortgage Market Canada Shadow Mortgages Canada, starting over starting now
Picture courtesy of Huffington Post

Jewellers making mortgage and car loans in the shadow lending market are afraid of the truth

If you really knew who you were dealing with for that loan and what the real costs were, and how they felt about you, you certainly would question the wisdom of doing it. Here is what one such jeweller famous for his television commercials said:

He believes some of his customers probably shouldn’t be seeking refinancing to hold on to their homes, but added that if Canadians are going to be so addicted to home ownership, he might as well cash in. “It doesn’t make sense to go to your jeweller for a mortgage or even for a car loan,” he said.”

The shadow lending market Canada and the shadow lending mortgage market Canada

How times have changed! Did you ever think you’d see the day when television commercials featured jewellers offering you mortgages? Yes, there are now a growing number of “alternative lenders” offering mortgages; of course at interest rates well above what traditional financial institutions are charging. One mortgage broker (who was not identified by name) said that although major Canadian lenders offer five-year fixed mortgage rates at about 2.5% to qualified borrowers, rates in the private market range from 7% – 15%. In addition to higher service fees, the market is also weakly regulated, allowing lenders to take advantage of the estimated 20% – 30% of Canadians with limited or no options at traditional financial institutions due to low income or a poor credit score.

The shadow lending market is growing fast

This shadow lending market is growing faster than it can be regulated and preying on the most indebted, vulnerable Canadians. A CIBC report from earlier this year noted that lending by non-commercial bank lenders has doubled since 2012. The Bank of Canada warned about the risks inherent in the shadow banking sector in its most recent Financial System Review last month. The shadow market is estimated at less than 10% of Canada’s mortgage market, much less than the 30% estimated for the pre-crash U.S. market. Low interest rates make it very attractive for people to continue borrowing and pile up debt, making it an ideal climate for the shadow lending market to continue to grow at an ever faster pace.

Why are Canadians falling prey to these shadow lenders?

  • They have multiple mortgages, taking equity out of their homes to cover other debts
  • When they get into financial difficulty, the homes have been used as ATM machines because of the increasing values

Then they fall behind on mortgage payments and are threatened with foreclosure. Mortgages in Canada are considered “full recourse” loans, which means the borrower is responsible for repaying a loan even in the case of the lender taking over and selling the home through power of sale proceedings because you could not keep up the mortgage payments. Canadians who don’t qualify for a bank loan have been forced to refinance in the shadow lending market to avoid losing their home.

I don’t buy jewellery from a trustee

Don’t take financial advice from a television commercial and don’t go to your jeweller for a mortgage or a car loan. Are you plagued by debt problems? Do you have bankruptcy questions? Professional trustees are experts you can count on for sound financial advice regarding insolvency, bankruptcy and bankruptcy alternatives. If you’re having financial difficulties contact Ira Smith Trustee & Receiver Inc. as soon as possible. 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.

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SCARED TO DECLARE PERSONAL BANKRUPTCY?

scared to declare personal bankruptcy, personal bankruptcy, bankruptcy, bankruptcy alternatives, credit counselling, debt consolidation, consumer proposals, consumer debt, credit card debt, debt, trustee, trusteesScared to declare personal bankruptcy? Don’t be. Bankruptcy is a legal process that can provide relief to honest but unfortunate individuals who are unable to pay their debts.

According to the Office of the Superintendent of Bankruptcy Canada:

Employment and Social Development Canada reports:

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

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

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

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

 

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CRA: TAX RETURN FILED BUT NO MONEY TO PAY?

proposal, income tax, income tax debt, tax debt, CRA, Canada Revenue Agency, trustee, trustees, tax lawyer, consumer proposal, bankruptcy, bankruptcy alternatives, taxes in CanadaWill CRA be looking for you? June 17TH was the deadline for self-employed individuals in Canada to file their 2013 income tax and benefit return. You filed your return on time to avoid a late-filing penalty on amounts owing, and gasped when you saw how much money you owe the CRA. How are you going to pay your tax bill? The CRA is not known as a charitable organization and they have the power to withhold HST/GST and child tax credits, seize money in your bank account and garnish your wages. To add insult to injury the CRA can also continue to charge penalties and interest on the money you owe until your debt is paid in full. You need a plan and you need one now.

I’m sure you’ve been bombarded by the scare tactic radio ads that are flooding the air waves by a prominent tax lawyer. He’d like you to believe that he and only he can deal with the CRA and solve your tax problem; but, that simply isn’t true. Trustees are experts in solving debt issues and what you need is a professional, licensed trustee. Your trustee will present you with bankruptcy alternatives, one of which is a consumer proposal.

What is a proposal? In a proposal your trustee will work with you to determine how much you can afford to pay each month. Your trustee will then negotiate with your creditors, including the CRA, for you to pay a portion of your unsecured debt over a maximum of 5 years at a monthly rate that is affordable to you. Over 66 2/3% of your creditors ($ value, in addition to a majority in number) have to agree to accept the proposal. If your total debt, including income tax debt, is less than $250,000, then you can consider a streamlined proposal process, which is called a consumer proposal.

Will the CRA agree to a consumer proposal? Recent statistics from the CRA estimate there is currently about $8 billion in unpaid taxes in Canada. The reason that consumer proposals are almost always accepted is that they produce a better rate of recovery on your debts than if you’d filed for bankruptcy. For your consumer proposal the CRA will require that:

  • all outstanding tax returns are filed with CRA before they will accept the proposal
  • you have sufficient income to meet the payments in the proposal
  • you agree to make installments on your current year taxes, so that you don’t fall behind again on your taxes

Are you a good candidate for a consumer proposal? If you’re a business owner with a good cash flow and after coming up with all the deductions possible to give to your accountant you still had a large profit leading to the surprise income tax debt, you’re are a good candidate for a consumer proposal. We can also let you know why negotiating a reduction in your debt through a consumer proposal is better than a bankruptcy.

Don’t let tax debt paralyze you! Contact Ira Smith Trustee & Receiver Inc. today. We’ll create a solid financial plan for you so that you can be Starting Over, Starting Now.

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THE CASH STORE ONTARIO: THIS PAYDAY LOAN OUTFIT NEEDED HELP AND CALLED A TRUSTEE!

Real Payday Loan Help, payday loan, payday loans, payday loan companies, guaranteed bad credit loans Toronto, bad credit loans Toronto, bad credit loans online, trustees, licensed trustees, trustee, debt, The Cash Store OntarioDo you need help-The Cash Store Ontario Payday Loan? Any other payday loan? Contact a Trustee. THEY DID!! They are currently in formal bankruptcy protection restructuring proceedings and had to stop making loans in certain provinces, including Ontario!

Payday loans such as The Cash Store Ontario payday loan are an ongoing problem and we’ve reported on this very serious issue in a number of blogs – Legit Companies Don’t Guarantee Bad Credit Loans Toronto, Beware Of Payday Loan Companies Targeting You With Mobile Apps!, Bad Credit Loans Online Attack The Already Vulnerable, Payday Loans Are Not The Answer To Your Financial Problems, and Ontario Cracks Down On The Cash Store Payday Loan Company.

Companies and products just like The Cash Store Ontario payday loan prey on the already vulnerable, people looking for guaranteed bad credit loans. I thought that things couldn’t get worse for the consumer, until I saw a television commercial from a company called Real Payday Loan Help. This company is selling educational courses, taking advantage of people who have already been taken advantage of yet are continuing to look for companies advertising “guaranteed bad credit loans Toronto”. This is not a Canadian company; they are based in Florida. They are not professional, federally licensed trustees. They can’t offer you any help with your serious debt issues. The only thing they can do is help you create more debt.

It’s not surprising that payday loan companies and products like The Cash Store Ontario payday loan and companies like Real Payday Loan Help are moving into Canada. The United States has been cracking down on payday loan companies. Currently there are 12 states where payday loans are completely banned, but there are many more in which the industry is restricted in some way or another. In fact, only six states have no cash advance interest ceiling whatsoever. The Federal Trade Commission (FTC) enforces many laws to protect consumers in this area and they have filed many law enforcement actions against payday loan companies.

When you have serious debt issues you need help from a licensed trustee. Bad credit loans online will only help you get caught in a debt spiral. So, if you are involved with a company or product such as The Cash Store Ontario payday loan, you do need help. The Cash Store Ontario had to go to a licensed trustee and you should too. You need Ira Smith Trustee & Receiver Inc. We will evaluate your situation and provide you with a solid plan for moving forward so that Starting Over, Starting Now you can live a debt free life.

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HIDING YOUR ASSETS IN A BANKRUPTCY COULD LAND YOU IN PRISON

hiding your assets, Bankruptcy, bankruptcy alternatives, Bankruptcy and Insolvency Act, bankruptcy court, bankruptcy file, Criminal Code, Office of the Superintendent of Bankruptcy, declaring bankruptcy, trustee, trustees, what is bankruptcyIf you think that hiding your assets in a bankruptcy is a good way to hang onto your property; think again. This is not a minor matter. In fact it’s a violation of the Bankruptcy and Insolvency Act (BIA) and the Criminal Code and it’s punishable by hefty fines and/or prison time. You will find yourself in a world of trouble if you:

  • Fraudulently dispose of property before or after the bankruptcy
  • Make false entries in a statement of account or hide, destroy or falsify a document related to your property or affairs
  • Conceal or fraudulently remove property, or conceal claims or debts
  • Refuse to respond fully and truthfully to questions posed during an examination held in accordance with the BIA

Committing fraud against the government is never a good idea and the likelihood is that you will get caught. The Office of the Superintendent of Bankruptcy (OSB) identifies possible offences through its detection programs or through complaints received from creditors, trustees or the public. When the OSB has reason to believe that an offence has been committed, it sends the file to one of its three special investigation units. The investigation units work closely with the Royal Canadian Mounted Police (RCMP) and in some cases files are transferred to the RCMP. The OSB encourages people to report fraudulent activities that relate to a bankruptcy file and they even have a toll free number to call or use an affordable background check USA 1-877-376-9902.

In addition to fines and/or prison time, if you hide your assets from the bankruptcy court:

  • You will not be able to discharge your debts
  • The trustee can revoke your discharge and those debts cannot be discharged in subsequent bankruptcies

Still think that hiding your assets in a good idea?

Honesty is always the best policy. If you are thinking of declaring bankruptcy, contact Ira Smith Trustee & Receiver as soon as possible. We will guide you through the process and Starting Over, Starting Now get you well on your way to living a debt free life.

Call a Trustee Now!