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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.

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TANK YOUR CREDIT SCORE RATINGS, DECLARE BANKRUPTCY, IMPROVE YOUR LIFE!

credit score ratings, bankrupt, Bankruptcy, Consumer Proposal, credit report, credit score, declare bankruptcy, insolvent, toronto bankruptcy, vaughan bankruptcy, what is bankruptcyAre you the poster child for financial responsibility? You have a good job, you take care of your family, your bill payments are all current and you have an excellent credit score. So, what can possibly be wrong with this picture and why would we think you should tank your credit score ratings, declare bankruptcy and improve your life?

The reality is that as many as 70% of bankruptcy filings are made by people with strong credit scores, according to TransUnion. Why isn’t a great credit score a predictor of whether or not someone will go bankrupt? “Many people are hopelessly insolvent but they’re not delinquent. From a credit report they are making their payments on time but they’ve got no reasonable prospect of ever paying this debt off,” said Mr. Mantin, senior vice-president of E. Sands & Associates Inc. According to Ira Smith, President of Ira Smith Trustee & Receiver Inc., “This is a very telling comment. Most people believe that as long as you make the minimum payment, you are “current”, especially when it comes to credit cards, even though deep down you know that you will never be able to pay off the debt. Current used to mean that when you received the credit card statement, you paid off the balance in full and you were delinquent if all you made was the minimum payment. This is a huge societal mind shift.”

When you are staying afloat by making the minimum payments, it doesn’t take much to tip you over the edge. Any major life changing experience can do it – loss of job, divorce, serious health issues, unexpected major expense – and all of a sudden you go from paying your bills on time and having a great credit score to not paying your bills and looking at bankruptcy.

What should you do? If you are struggling with a mountain of debt, even if you are making your monthly payments and have a great credit score, contact Ira Smith Trustee & Receiver Inc. A great credit score won’t solve your debt problems, but a consumer proposal or bankruptcy can help you both financially and emotionally, alleviating the monthly stress when the bills are due. Starting Over, Starting Now you can take charge of your financial future and improve your life.

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COMMERCIAL PROPOSAL – CORPORATE RESTRUCTURING PART 3

bankrupt, commercial proposal, corporate restructuring, division 1 proposal, liquidator, proposal, restructure, trustee, Company bankruptcyIn last week’s blog we discussed the stakeholders and key players and their roles in a corporate restructuring. This week we’ll be addressing the Division 1 Proposal, commonly referred to as a Commercial Proposal or the Proposal.

What is a Division 1 Proposal? The Division 1 Proposal is a legal document typically drawn up by either the Trustee or the company’s lawyer. It is essentially a compromise between a commercial debtor and his/her creditors that, if approved by the creditors and the Court, becomes legally binding. Proposals help resolve the financial difficulties of a business and offer creditors more than they could expect to receive in a bankruptcy. The agreed upon Proposal is a part of the overall restructuring plan, which is a business plan.

When is a Commercial Proposal, otherwise known as a Division 1 Proposal used? A Division 1 Proposal can be used if a business is viable but financially unsound. The general principal we use in determining if a business is a good candidate for a Proposal is that they have to have a core business that is viable and once they shed themselves of most of their debt and develop a business plan and model that will be profitable they can use a Proposal as a tool to continue operations and settle their unsecured debt for less than the full amount of the unsecured debt.

What are the advantages of a Division 1 Proposal? After a debtor files a Division 1 Proposal or a notice of intention to file a Proposal, creditors may not begin or continue any legal action. The debtor remains in possession and control of their assets and company management continues to make all business decisions. Restoring the financial condition of a business with a Proposal may save the business, preserve jobs, give creditors the best return, provide a continuing source of business for existing and new creditors, and enable the owners and/or shareholders to retain an interest in the business.

If your company is experiencing severe financial difficulties, avoid a Company bankruptcy. Contact Ira Smith Trustee & Receiver Inc. to discuss whether a Division 1 Proposal is the right strategy for you. Starting Over, Starting Now we can help to restructure and turnaround your company, restoring it to financial health.

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FINANCIAL VIABILITY ASSESSMENTS – CORPORATE RESTRUCTURING PART 2

financial viability assessments, bankruptcy alternatives, consumer proposals, corporate restructuring, division 1 proposal, proposal, restructuring, toronto bankruptcy, trustee, turnaround management, Vaughan, company bankruptcyLast week we discussed the process of corporate restructuring. This week we’ll be addressing the stakeholders and key players and roles in a corporate restructuring, as well as the issue of financial viability assessments.

Serious financial difficulties cause a great deal of distress; the very viability of your company is in question. You need professional help and you need it now. The cause of the financial difficulties must be identified, financial and viability assessments must be done, and an organization and restructuring plan must be implemented. There are stakeholders and key players that are involved, but who are they and what role do they play?

Who are the stakeholders: Depending on the size and structure of your company stakeholders may include corporate management, financial institutions, suppliers, shareholders, governments, regulatory bodies and employees.

Who are the key players and what are their roles: The key players in a corporate restructuring are the:

Company’s Accountant: The role of the accountant may include payroll, cash collections, disbursements, procurement and property accounting, tax preparation, financial planning, business consulting and payroll services.

Company’s Lawyer: The role of the lawyer may include drafting contracts, taxes, facilitating mergers, and handling human resources issues.

Trustee: The trustee is a restructuring professional. We work with all of the stakeholders and key players, creating realistic strategies and solutions for your company. The problems that caused and contributed to the financial distress must be identified and addressed after which a plan must be put into place to restructure the company and affect the turnaround. We perform a financial viability assessment in order to begin the planning process of a corporate restructuring.

Contact Ira Smith Trustee & Receiver Inc. With our expertise and skills in restructuring and turnaround management we will work with you to find and implement the right financial and business strategies that address your particular issues. We will assist you to avoid your company bankruptcy. Starting Over, Starting Now we can begin to rehabilitate your financially troubled company. Watch for our next blog – Corporate Restructuring Part 3 – when we’ll be addressing the Division 1 Proposal.

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CORPORATE RESTRUCTURING PART 1

corporate restructuring, financial restructuring, proposal, restructuring, richmond hill, richmond hill bankruptcy, toronto bankruptcy, trustee, trustees, vaughan, vaughan bankruptcy, woodbridge, woodbridge bankruptcy, company bankruptcyMany companies are experiencing financial difficulties as a result of the current climate of economic uncertainty, fast-moving markets, increased competition and outdated business models. As Trustees & Receivers we are often involved in corporate restructuring, a process which many clients find confusing.

We know there is confusion about the meaning of the terminology, the roles played by the various stakeholders and professionals, and the difference between a restructuring business plan and the Proposal. I’ll attempt to demystify it for you.

What is corporate restructuring

Corporate restructuring is a strategy to move from financial harm and return to a financially viable state.

When to consider restructuring

When a company is having trouble making payments on its debt and this situation is one that may lead to the company’s collapse, corporate restructuring should be considered.

Corporate restructuring increases a business’ efficiency – reducing costs, increasing profits – and therefore avoiding closure.

When is a company eligible for restructuring

There is a general principle we use in determining if a business is a good candidate for financial restructuring. It is that they must have a core business that is viable. First they must shed themselves of their debt which is weighing them down. They must also develop a business plan and model that will be profitable. Then they will be able to continue to run.

When should you contact a trustee?

If your company is experiencing serious financial difficulties, the sooner you contact a trustee, the better.

Contact Ira Smith Trustee & Receiver Inc. We will evaluate your situation and create an effective restructuring plan that will help your company to become financially sound, Starting Over, Starting Now. We will help you avoid a company bankruptcy.

Watch for our next blog – Corporate Restructuring Part 2 – when we’ll be addressing the key players, stakeholders and roles in a corporate restructuring.

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GREY DIVORCE IN CANADA CAN CREATE SERIOUS DEBT FOR BOOMER RETIREES

grey divorce in canada“Divorce is the one human tragedy that reduces everything to cash”. – Rita Mae Brown

The terms “silver separation” and grey divorce” sound very benign, but their financial ramifications have spelled disaster for many boomer retirees. Instead of travelling the world or spending carefree days on the golf course, many retired baby boomers may now be saddled with a mountain of debt and are trying to figure out how to pay their bills because of grey divorce in Canada.

A study done in 2012 by Bowling Green State University in Ohio revealed that the divorce rate among people who are retired or near retirement had more than doubled in the United States in just 20 years. According to Statistics Canada, divorces among couples 65 years of age and older are becoming more and more common and that the average age at which Canadians divorce has been rising steadily for a number of years. And, this trend is expected to continue. Susan Eng of the national seniors’ advocacy group CARP said that in recent years her office has been seeing an increase in calls from divorcees who are unsure of how they were going to make ends meet now that they were alone.

Although women seem to be the hardest hit, men are not immune. The nest egg that you have accumulated for retirement now has to be divided and you may also be supporting minor children and helping to support adult children and/or ageing and ailing parents. The financial challenges of your new reality may have created more debt that you can handle.

Grey divorce in Canada summary

Debt is a four-letter word but it can be managed with professional help. If you are experiencing serious debt problems because of grey divorce in Canada, or for any other reason, contact Ira Smith Trustee & Receiver. Credit Counselling, Debt Consolidation, and Consumer Proposals are all options that we can explore and then we will come up with a plan that will work best for you. Although life can be difficult after a grey divorce you can start over and live a debt-free life Starting Over, Starting Now.

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SHOULD SOCIAL MEDIA BE USED TO DETERMINE YOUR CREDIT SCORE?

bad credit, Bankruptcy, bankruptcy alternatives, Bankruptcy and Insolvency Act, bankruptcy in Canada, bankruptcy in ontario, bankruptcy ontario, bankruptcy protection, bankruptcy trustees, Consumer Proposal, consumer proposals, credit report, credit score, credit scores, debt management, debt settlement, declaring bankruptcy, Facebook and LinkedIn, social media, social networks, what is a consumer proposalAre you experiencing problems with debt management or having trouble getting credit due to a bankruptcy or a consumer proposal? If so, you are going to be delighted to hear that there are companies who believe that online reputations can tell lenders more about a person’s trustworthiness than the traditional credit score. Your credit score is established on the basis of how you pay your bills while companies like Lenddo and Neo Finance are analyzing data from social networks like Twitter, Facebook and LinkedIn, and other factors to reach people who have a hard time getting loans. The Lenddo score is based upon:

  • Number of followers
  • Background of peers
  • Education and employers
  • Repayment history of friends

The Neo Finance score is based upon the following information in a person’s LinkedIn profile:

  • How long the user has held jobs
  • The number and quality of connections in their industry
  • The seniority of their connections

Should social media be used to determine your credit score? Probably not. Basing anything on the number of social media followers is categorically unreliable. Social media networks have become a numbers game where there is the mistaken belief that “whoever has the most, wins”. Fake Twitter followers have become a multi-million dollar business. Open networkers on LinkedIn have thousands of followers that they don’t know and the same goes for people who collect Facebook friends. The other problem is that the consumer would have to be willing to connect the financial service to their social media networks’ data which of course brings up privacy issues. Although in theory, this sounds like an interesting idea, I’m afraid that there is no quick fix for bad credit.

If you are experiencing problems with debt management or having trouble getting credit due to a bankruptcy or a consumer proposal, contact Ira Smith Trustee & Receiver Inc. for information on how to fix bad credit so that you can live a debt free life Starting Over, Starting Now.

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WHAT IS A SECURED CREDIT CARD CANADA & HOW TO GET ONE

secured credit card, secured credit cards, prepaid credit card, prepaid credit cards, credit bureaus, credit history, bad credit, bankruptcy, consumer proposals, Vaughan, WoodbridgeIn our last blog “How to Fix Bad Credit”, one of the points that we touched upon was the use of a secured credit card to help you build a good credit history. Since the blog was published we’ve had several inquiries about secured credit card offers and how to get one.

What is a secured credit card? Secured credit cards require you to leave a deposit with the credit card issuer as a guarantee. The deposit is usually equivalent to the card limit, but it can be higher. The advantage of a secured credit card is that individuals with no credit history or a history of bad credit have the opportunity to build a positive credit history because most companies report regularly to the major credit bureaus. You can use your secured credit card in the same way as you would use any credit card. Be diligent and pay the balance regularly!

What is the difference between a secured credit card and a prepaid credit card? A secured credit card gives you a credit limit. A prepaid credit card works like a debit card; you have to keep reloading it with your own money. In addition, prepaid credit cards don’t give you the chance to build a credit history because no payment information is reported to the major credit bureaus. So, when you receive those secured credit card offers and prepaid credit card offers, you should know the difference between the two.

How do I qualify for a secured credit card? Most people will qualify for a secured credit card because you deposit the funds to secure the card in advance.

Can I get a secure credit card if I’m in bankruptcy or in a consumer proposal? In most cases, a secured credit card Canada is available as soon as are fully discharged from your bankruptcy. If you are in a consumer proposal, once it has been accepted by your creditors, you are eligible to apply for a secured credit card, but not necessarily guaranteed to be accepted.

Are all secured credit cards the same? No, not all secured credit cards are the same. According to the North Shore Advisory Inc., here are some precautions you should take when looking for a secured card:

  • Be cautious about secured card offers from unknown institutions. If you have doubts about the integrity of a secured credit card offer, contact FCAC toll-free at 1-866-461-3222.
  • Beware of secured card offers from issuers outside Canada. If you have problems, it may be difficult to resolve them if the company is not located in Canada.
  • Avoid offers for secured cards that do not have a recognized brand name such as VISA, MasterCard or American Express. These cards may only be accepted at a small number of stores or may require you to make purchases from a specific catalogue.
  • Read and make sure you understand all the terms and conditions associated with a secured card before you accept it.

How can I apply for a secured credit card from a reputable and recognized brand? For information on a Home Trust Secured Visa* Card click here.

Contact Ira Smith Trustee & Receiver for more information on secured credit cards and for professional advice on insolvency, bankruptcy and managing debt. You can live a debt free life Starting Over, Starting Now.

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CONSUMER PROPOSALS OR PERSONAL BANKRUPTCY; WHICH IS RIGHT FOR YOU?

credit, credit scores, credit score, credit report, credit reporting agencies, problems with credit, toronto, bankruptcy, vaughan bankruptcyIf you are experiencing serious financial problems you need professional advice and a plan of action. The first thing that you should do is contact a licensed trustee. A licensed trustee is a federally regulated professional who will evaluate your situation and help you to arrive at the best possible solution for your problems. Consumer proposals and personal bankruptcy are two options for insolvency. Which is right for you?

CONSUMER PROPOSALS

PERSONAL BANKRUPTCY

Stops creditors from taking legal action against a debtorStops creditors from taking legal action against a debtor
Requires a licensed trusteeRequires a licensed trustee
Your total debt cannot exceed a $250,000 (excluding a mortgage)If you owe more than $1,000 you are eligible & no limit on the amount of debt
Your monthly payment is fixedMonthly payments may vary as they are based on your income and assets
You retain your assetsCertain assets may have to be seized by the Trustee
No monthly tasks or reportingMonthly income and expense reporting is required
You are still entitled to all tax refund(s) and/or credits which you are owed.Tax refunds for the year of your bankruptcy and any prior unfiled years will be forfeited
After the completion of a consumer proposal your credit rating is R7After a bankruptcy your credit rating is R9
A Consumer Proposal will appear on your Credit Report for three years after completionA first Bankruptcy will appear on your Credit Report for six to seven years (in Ontario) after your final discharge from the Bankruptcy (14 years for a second Bankruptcy)

Ira Smith Trustee & Receiver Inc. can provide you with solutions to your financial problems and with a plan of action, Starting Over, Starting Now we can help you achieve your goal of a debt free life. Take the first step and contact us today.

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Are Consumer Proposals Right for You?

consumer proposal, consumer proposals, bankruptcy, personal bankruptcy, bankruptcy trustee, vaughan bankruptcy, vaughan bankruptcy trusteeIf you have serious financial problems, there are options in addition to bankruptcy. In fact more Canadians are now choosing consumer proposals instead of declaring personal bankruptcy due in large part to a change in the bankruptcy law that came into effect in September 2009. Previously only consumers with debt up to $75,000 could file a consumer proposal. Now the limit is $250,000. Is a consumer proposal right for you?

What is a consumer proposal? A consumer proposal is a way to make a deal with your creditors to repay your debts, but you can’t pick and choose the debts to be included. It’s a contract – a legally binding agreement that’s offered to your creditors through a licensed trustee, as an alternative to bankruptcy. It may be proposed that you pay a lower amount each month over a longer period of time, or pay a percentage of what you owe, and the consumer proposal must be completed within five years.

Is a consumer proposal a viable option for you? If you are an individual or a couple with total debts that does not exceed $250,000, not including debts secured by your principal residence, a consumer proposal might be the right choice for you. You will need to have cashflow from income to enable you to make your proposed payments and/or a third party able to assist you with a lump sum payment.

Why can a consumer proposal be a better option than bankruptcy? You’ll have control of your assets and more cash in hand to deal with daily expenses because a consumer proposal extends the time over which creditors are paid. Creditors like consumer proposals as well because they get more of their money repaid than if you opted for bankruptcy. However, you must be able to make the monthly payments. Your credit rating will also recover faster following the completion of a consumer proposal than from a discharge from bankruptcy. This way you consolidate all of your debts into one monthly payment that you can afford.

Be aware that a consumer proposal will not:

  • Eliminate your support and alimony obligations
  • Eliminate your student loan obligations if you ceased being a student less than 7 years prior to filing the consumer proposal
  • Deal with your secured debts, such as your house mortgage and car loan

Only a licensed trustee in bankruptcy can act as the administrator of your consumer proposal. Go to our website for more information on consumer proposals.

Contact Ira Smith Trustee & Receiver today for a free, no obligation consultation today and take your first step toward living a debt free life Starting Over, Starting Now.

Call a Trustee Now!