Urgent Info: How Bankruptcy Affects Your COVID-19 Benefits From The Government Of Canada
We have been receiving inquiries from people: who are either contemplating bankruptcy or have already filed bankruptcy and haven’t yet been discharged; and are concerned about the impact bankruptcy will have on the various benefit programs that were introduced under the COVID-19 Emergency Response Act. What follows is an e-mail issued to all Licensed Insolvency Trustees earlier today from the Office of the Superintendent of Bankruptcy. This should give you some guidance on how your bankruptcy will affect your benefits under the various programs. Note: “OSB” is an acronym for the Office of the Superintendent of Bankruptcy ——————————————————————————————————————– Guidance re: COVID-19 Emergency Response Act The Government of Canada has introduced the COVID-19 Emergency…
Is The Worst Yet To Come? The 2020 Coronavirus And What Happens Next
The coronavirus and its attendant consequences on the global economy are are wreaking havoc on the financial markets. Here are two entirely speculative scenarios on what could happen next: Coronavirus Scenario 1: Things Work Out Fine The coronavirus burns itself out in the spring or summer, and things will eventually return to normal. That would be the ideal scenario. However, the coronavirus situation in both Singapore and Australia suggest that this might not happen. Coronavirus Scenario 2: A Recession or Depression The virus persists until a vaccine is made available to the public (which won’t happen for another 12 – 18 months). The global economy freezes up because people around…
Is There A Hidden Real Estate Bubble in Canada?
Is there a “hidden” real estate bubble in Canada? This is a question I asked myself since last week when I started receiving panicked phone calls from people that purchased real estate during the height of the Toronto real estate market. Specifically, they purchased properties prior to April 21 2017 before the Non-Resident Speculation Tax came into force. There are two phone conversations that stand out in my mind which I’ll discuss… Investment Property Purchase Last week I received a call from a real estate investor who also happens to be a mortgage broker. He purchased a rental property just north of Toronto on Steeles Avenue in early 2017. It was financed…
Thank God I’m a Canadian
I count my blessings that I’m a Canadian from r/PersonalFinanceCanada
Why Consumer Insolvencies in Canada Are Increasing (Despite A Strong Economy)
Why Are Consumer Insolvencies Increasing Among Responsible Canadians? I am what is called a Licensed Insolvency Trustee. People come to me when they need help with debt relief, in particular Canadian consumer insolvencies proceedings under the Bankruptcy and Insolvency Act. If they have little in assets or income, they’ll usually file for personal bankruptcy. If they have significant assets or income, they’ll usually settle with their creditors by a legal proceeding called a consumer proposal. Regardless of the proceeding chosen, a debtor is required to undergo something called Insolvency Counselling. So what is it? In colloquial terms, Insolvency Counselling is when the LIT sits down with a debtor and examines…
Preparing for the Next Recession – A Guide For The Canadian Middle Class
As a CPA and Licensed Insolvency Trustee, I had a front row seat during the Great Recession of 2009 – 2011. I saw the devastating impact it had on the lives of ordinary Canadians. These were everyday people who were for the most part honest, hard working, and played by the rules. Yet they found themselves on the short end of the stick when the Great Recession started 10 years ago: some lost their jobs, some had their financial portfolios decimated, some lost their homes and quite a few experienced losing all three. It’s been over 10 years since the onset of the Great Recession and Canadians are more indebted…
How Does a Credit Score in Canada Really Work?
Introduction In theory, a credit score should be quite simple – through an algorithm, you’re assigned a numerical score that determines your credit worthiness. The score is a weighted average of many factors, including but not limited to: Your payment history Your credit utilization rate, which is how much of your credit limit you have uses versus how much you have available to you Balance owing on your debts The length of your credit history Public records (such as bankruptcy) Number of inquiries into your credit file Different Credit Scores But the reality is not that simple. Here are the complicating factors: Each of the two major credit rating agencies,…
Filing bankruptcy with gambling and substance abuse problems
A readers asks First and foremost I’m a gambling addict and also have problems with substance abuse. I have accumulated so much debt that I have fallen into a deep depression and I just beat myself up daily because I did it to myself. My debts: $3,000 of credit card debt, $11,000 line of credit, $11,000 in payday loans (the worst I know). I pay around $380 a month just on interest charges; pretty much my debts are not going away. I have personal loans from friends of $6.500 and a student loan of $5,000 – I haven’t made a payment since around 2008. I also have a payday loan…
Wall Street Bailouts Caused the Canadian Housing Crisis
The consequences of the 2008 Financial Crisis and the remedies initiated by the Federal Reserve to deal with it have reverberated throughout the global housing markets during these past 10 years. Readers may recall that in late 2008, the U.S. Federal Reserve implemented a money-printing program euphemistically referred to as Quantitative Easing (“QE”) in order to prevent a total collapse of the global financial system. In colloquial terms, the Fed, the White House and the United States Congress co-operated to bail out Wall Street after they screwed up. Money-printing causes price inflation in that more dollars are chasing a fixed quantity of assets. This has been particularly true for real…
Meeting of Creditors Requested for Consumer Proposal
A reader asks: I filed a consumer proposal back in August and a meeting was just called with my creditors. I only have BMO (majority holder) and RBC to deal with. They rejected my first offer and we are counter-proposing with another amount. I feel like we should just accept the amount that they want at this point. But I know that I am being helped so I pay the least in the end. I don’t want the proposal to be rejected. It sounds like it’s only a difference of $50 from what I could gather. How likely is it to be rejected? Or does this meeting just serve as…
