Canadian Federal Budget 2018

Here’s a collection of stories regarding the federal budget released 27 March 2018.

Headline: Federal budget highlights: Twelve things you need to know:  From gender equality and parental leave, to research funding and small business tax reform, here are the key changes in the federal budget

via Globe and Mail

Headline: Federal budget 2018: Highlights of Bill Morneau’s ‘equality + growth’ budget.

via CBC News

Headline: Trudeau government reveals the 2018 federal budget.

via Global News

Headline: Five ways the federal budget may affect average Canadians: Smoking just got more expensive, housing hopefully will get cheaper and the tax hit for cannabis.

via Financial Post

Take Control of Your Debt

Christmas is over, you’re back to work and the bills start coming in.  You realize that you overspent during the holiday season and now the debt is overwhelming.  Minimum payments will keep the calls from coming but, you realize that you’re treading water.

Debt stress can lead to other issues relating to health, relationship and employment to say the least.  But when you have reached the point where you can no longer pay your bills, it is overwhelming.  Is it time to panic or deal with your debt head on?

The Bank of Canada has repeatedly stated that one of its top concerns is the high level of Canadian household debt.  Notwithstanding those concerns, the level of household debt continues to rise, hitting 171.1 per cent of disposable income in the third quarter of 2017.  This means that the average household owes $171 for every $100 of income.

You need a solution to deal with all of your creditors to become debt free and make a fresh start.

There are some tips that can help you take control of your debt and build towards a sound financial future to avoid having your debts get out of control.

  • Prepare a budget so that you know where you are spending your money. A budget will help you identify areas where potential savings can be made. For anyone who is tech savvy, you can download a number of free apps which might make budgeting more fun. The results of your budget will show you how much is left over for debt servicing.  As well, a lot of bank online websites have budget or spend tracking tools that can help you keep track of your finances.  Its not the big things that are hurting you, it’s the nickel and dime things that need to be tracked.
  • Change your spending habits. Overspending is one of the most common ways to get into debt.  Keeping track of your expenses is a great way to know where your money is going, what exactly your spending it on and to change your overspending ways.
  • Figure out the best way to reduce debt. Two well known methods are called the Snowball Plan. This starts with trying to pay off the smallest debt and leads up to the largest.  This occurs while you are still paying only the minimum payment on all your other debts.  The other method is called the Avalanche Plan. The Avalanche Plan method starts by throwing as much money as you can at the debt with the highest interest rate.  Again, all while still paying only the minimum on all your other debts. Once that highest interest debt is paid off you go onto the next highest interest debt and so on and so forth.
  • Lastly get some professional help. Some of you will get a better sense of where you are financially and be able to get out of it on your own.  But for most, it won’t be that simple. The amount of money left over at the end of the day will show that you only have enough left over to make minimum payments, which will only leave you treading water. And if something happens where your income is suddenly reduced, you might not even be able to make the minimum payments and you will soon fall behind on the payments.  Then the calls will come.

So, the best way to meet that debt head on is to take control.

At Boale, Wood and Company Ltd, we understand the stress that unmanageable debt can cause.

Call us. It’s not too late.  (604) 605-3335.


Insolvency and Taxes, the Real Facts

A common misconception – Income taxes are not included in a proposal or a bankruptcy.

False! Income taxes and almost all other debts are included in a bankruptcy or a proposal, including any debt one might owe to the tax department as a result of being a director of a corporation.

Sometimes, despite their best efforts at financial management, Canadians get to a point where they simply can’t pay their debts as they become due. Whether due to inability to pay taxes, problems with a business, loss of employment, unexpected financial obligations or other unplanned factors, they become insolvent. They need to seek the advice of a Licensed Insolvency Trustee, who can inform them about their options.

There is another misconception in Canada that there are government programs that allow you to enter into payment arrangements with your creditors. In reality, there are no such programs. There is, however, legislation that allows you to compromise your debts.  For consumers, that legislation is the Bankruptcy and Insolvency Act.

There is an abundance of misleading information about credit and debt repayment programs in the marketplace and on the Internet. Many unlicensed and unregulated non-trustee firms use phrases such as “Avoid bankruptcy” or “We can help reduce your debt to one monthly payment,” common themes that you read about in advertising all the time.

Other organizations that offer “credit or debt consolidation”, payment programs or some form of debt relief are in the business of helping you organize your payments and thus charge a fee for their service, whether they tell you up front or not. Even non-profit programs charge fees. The fees charged by these firms differ from company to company and are not to be found anywhere in their promotional material. The fees of a Licensed Insolvency Trustee in a consumer proposal and in a bankruptcy, are set out in the Rules of Bankruptcy and Insolvency Act.  In other words, all Licensed Insolvency Trustees get paid the same fee.

While non-trustee firms will offer to help an individual avoid bankruptcy, in many cases all that is happening is the inevitable is being delayed or you will be put on a debt repayment program that is so onerous you may eventually default on it and be worse off than when you started. And if you owe any government agency money, including Canada Revenue Agency a tax debt, none of these programs will work.  Government debt can only be dealt with by a Licensed Insolvency Trustee. Remember, if it sounds too good to be true, it probably is.

As well, the majority of these companies have no government oversight, no professional association, no regulatory body and no code of ethics. Licensed Insolvency Trustees have all of these.

The thought of meeting with a Licensed Insolvency Trustee can make people uncomfortable because of the social stigma attached to the word “bankruptcy”. The typical consumer is often unaware of the role of the trustee and the options these professionals can make available for dealing with debt. Unfortunately, that fear will cause many to delay getting the advice they need.

Trustees are highly trained professionals and the only ones licensed by the Office of the Superintendent of Bankruptcy (OSB) who can file a consumer proposal or a bankruptcy.  Despite what you may read on the internet, no one else can help you with these options.

To help ensure that the rules are followed, the OSB is responsible for supervising the process and protecting the public interest.  The OSB is also responsible for issuing operating licenses to Trustees and for reviewing everything that a trustee does, ensuring that every debtor is treated exactly the same and fairly as outlined under the Act.

How to get the process started?

A proposal or a bankruptcy will begin with a meeting between the individual and a licensed insolvency trustee who will assess their financial situation, explain the options available and explain the debtor’s rights and responsibilities. After the meeting, the debtor will have enough information to make an informed decision about the next step. Remember, only a Licensed Insolvency Trustee can file a proposal or a bankruptcy.  Its never too late to get information.

Call us today. (604) 605-3335

It’s not too late.

Do I Need a Lawyer if I am in Debt?

Debt is stressful.  If you are stressed because of your debt, and your income doesn’t meet living expenses and the required minimum payments, you need a plan to get your finances in order.

You may receive harassing phone calls and letters from collection agencies.  You may start receiving collection/demand letters from lawyers threatening or even initiating court action which can lead to wage garnishments, seizure of assets or liens against your property.  Your first instinct is to call a lawyer.  However, is this the right call?

If your goal is to achieve relief from debt stress, prevent further collections actions against you and make a fresh start, a lawyer will likely not be necessary in most cases. You need to contact a Licensed Insolvency Trustee (“LIT”).

LIT’s are licensed and regulated by the federal government through the Office of the Superintendent of Bankruptcy and are tasked with ensuring the legal rights of debtors and creditors are balanced according to the Bankruptcy and Insolvency Act.  LIT’s have the knowledge to guide you through every step of the process to the discharge of your debts. However, you are required to fulfill certain responsibilities, so you can complete the entire process without the Courts ever being involved.

When to Seek Legal Advice

If you are a party to litigation, having legal representation may be necessary.  Though most consumer debt likely could take place in small claims court where you are able to represent yourself, a lawyer’s expertise or guidance might still be of significant required particularly if you are collecting a debt, disputing the debt, or if the matter is complex or highly consequential.   If you don’t dispute the debt and you are only trying to delay matters, you need to speak to an LIT, not necessarily a lawyer.

What about bankruptcy lawyers?

It is rare for an insolvency lawyer to become involved in consumer debt situations, as the focus of their practice tends to involve complex and corporate matters. However, if one or more of your creditors tries to petition you into bankruptcy (involuntary) or objects to your discharge from bankruptcy, then legal counsel may be necessary.  Usually when there is creditor objection to a discharge, the LIT would likely advise you to seek legal advice.  If CRA is the opposing creditor it is likely you need a lawyer, a bankruptcy lawyer, not a tax lawyer.

I owe CRA.  Do I need a tax lawyer?

If you are experiencing tax problems with Canada Revenue Agency (“CRA”) and are burdened with serious debt problems, CRA may be only one of several creditors that you have to deal with.

Why use an LIT instead of a tax lawyer? An LIT can:

  • Provide you with a full financial appraisal of your situation;
  • Deal with all of your debts while a tax lawyer only deals with your CRA debt; the rest remains;
  • Advise you on insolvency alternatives which include Division I proposal or consumer proposals , credit counseling and debt consolidation and, as a final option, bankruptcy;
  • Provide immediate protection with a Stay of Proceedings by filing a Division I Proposal, Consumer Proposal or an Assignment in Bankruptcy;
  • Advise what amounts are payable under the statute;
  • Be less expensive than using a tax lawyer because in many cases the Trustee doesn’t charge a fee over and above what the Bankruptcy and Insolvency Act requires to be paid;
  • Save you money because the actual amount required to settle using a lawyer may be higher than what debts could be settled for in a proposal or a bankruptcy;
  • Offer you a free consultation while a tax lawyer usually requires a retainer.

There are a few cases in which you may want to consult a tax lawyer:

  • Your debts chiefly or only involve CRA;
  • You are not insolvent;
  • CRA has registered liens on your property (bankruptcy does not always remove liens);
  • Communication between you and your tax lawyer is privileged; a trustee must seek and make full disclosure;
  • You can avoid a bankruptcy filing and use the voluntary disclosure rules on all of your conduct and transactions;
  • You are being prosecuted by the Department of Justice in relation to your tax reporting and therefore do require a lawyer.

Free Confidential Consultation

LITs are the only debt professionals that can administer proposals and bankruptcies.   Credit counsellors and/or debt advisors are not licensed by the OSB and have no ability to file a proposal or a bankruptcy.  This is despite what they may lead you to believe on their websites.

One of the major benefits of using an LIT is that the filing of a proposal or bankruptcy provides an immediate Stay of Proceedings on all collections actions, wage garnishments and asset seizures being taken against you. They also prevent any future action being taken as long as you honour the terms outlined by your Licensed Insolvency Trustee.

You are entitled to have or seek legal counsel at any time during a bankruptcy, however, it is rarely necessary.

At Boale, Wood & Company, we will provide you with a no charge, confidential, assessment of your financial position.  You should never pay an up-front fee to obtain advice on how to deal with debt or a fee to be referred to an LIT.

Call us.  It’s not too late. (604) 605-3335

A Closer Look at November 2017 Insolvency Stats

Consumer insolvencies in BC increased in November 2017 by 14.7 percent from October 2017.  Consumer proposals increased 11.7 percent while bankruptcies decreased 19.7 percent.

The proportion of proposals in consumer insolvencies in BC accounted for 60.32 percent during November 2017 while they accounted for 55.22 percent for all insolvencies across Canada for the same period.

Consumer insolvencies in BC for the 12-month period ending November, 2017, decreased by 0.9 percent compared with the 12-month period ending November, 2016. Consumer bankruptcies decreased by 1.7 percent, while consumer proposals decreased by 0.4 percent. Consumer insolvencies in all of Canada are down by 1.3 percent over the same period last year.  BC accounted for 8.24 percent of all insolvencies in Canada in November 2017.

The proportion of proposals in consumer insolvencies in BC was 60.32 percent during the 12-month period ending November, 2017, slightly up from 60.0 percent during the 12-month period ending November 2016.  It indicates the popularity of consumer proposals as a way for consumers to deal with their debt and with dealing with a Licensed Insolvency Trustee over other unregulated service providers.

While insolvencies across Canada are down overall by 1.7 percent, bankruptcies are down 11.8 percent but proposals are up by 9.2 percent.

The insolvency statistics indicate the increasing benefits of the protections provided to consumers under the Bankruptcy and Insolvency Act over other non-legislated options, whether that is a consumer proposal or a bankruptcy.   It also indicates that consumers are seeing the benefits of seeking the professional advice of a Licensed Insolvency Trustee rather than those of other non regulated service providers.

If you would like to know exact details of how a consumer proposal or a bankruptcy would benefit you in dealing with debt, call us at (604) 605-3335 to schedule a free consultation.

Call us.  It’s not too late.

See this article for more on Canadian insolvency statistics for July 2017.

Canadian Insolvency Stats for November 2017

The latest numbers from the office of the Superintendent of Bankruptcy Canada shows a 0.9% percent increase in the total number of insolvencies in Canada in November 2017 compared to the previous month.

Bankruptcies decreased by 3.7% percent and proposals increased by 5.2% percent.

Compared to a year earlier, insolvencies decreased by 1.5%

Other stats: For the 12 month period ending November 30, 2017, the total number of insolvencies decreased by 3.4 percent compared with the 12-month period ending November 30, 2016.

You can read the summary and full report here.


Surrey Office has a new Location

Effective February 1, 2018, the Surrey office of Boale, Wood and Company Ltd has moved to:

250 – 15117 101 Avenue, Surrey, BC.  V3R 8P7

Our phone and fax numbers will remain the same.

Our Surrey office is open from 8:30 to 5:00 pm, Monday through Friday.  Free parking is available.  Please use Reserved stall #6 or any of the visitor parking spots.

Can I Pursue an Undischarged Bankrupt for Collection?

Yes you can.  However, you must wait until the Licensed Insolvency Trustee is discharged.

When a person goes into bankruptcy a Stay of Proceedings is issued.

The Stay of Proceedings protects the debtor from any collection activity by his unsecured creditors.  When the debtor receives their discharged, all his unsecured debts, with a few exceptions, are erased.

You can pursue an undischarged bankrupt once the trustee is discharged.  The key word being undischarged.

In rare cases a debtor is not discharged, usually because he fails to meet the obligations imposed on him by the Bankruptcy and Insolvency Act, namely duties, or payments pursuant to a mediation agreement or conditional order of Discharge.

Once the trustee is certain the debtor is not going to honour his obligations the trustee can and should proceed to seek his own discharge from the bankruptcy.

At this point the Stay of Proceedings is lifted and creditors are revived.  So, all creditors can pursue the bankrupt for debt collection just as though he was never in bankruptcy.

Insolvency Searches

Recently the Office of the Superintendent of Bankruptcy (“OSB”) announced that it is modernizing its Insolvency Record Search function including the elimination of the $8.00 fee charged to the general public.

The announcement of the fee elimination caused a bit of concern by some in the insolvency community thinking that insolvency records could now be searched by anyone, for free.  It was suggested that this would eliminate the confidentiality of an individual declaring bankruptcy or filing a consumer proposal and that nosy neighbours would have free access to the database of insolvency filings.

The elimination of the fee has been endorsed by some, primarily those who may benefit from it being eliminated, credit counselling firms and debt advisors, who are direct competitors of the Licensed Insolvency Trustee.  They have stated that the only debt relief option available where a consumer’s privacy is protected is credit counselling.  Not so fast.  Every debt management program is recorded on your credit record, just like a bankruptcy and a consumer proposal. So, I don’t know how the privacy is being protected.

But hold on.  Is this really an issue? Is it much ado about nothing?  Is this Chicken Little crying out the sky is falling?  In my view, it is not.

The $8 fee per search was never an impediment for anyone to search the database.  If someone really wanted to know about an individual’s insolvency, they would pay the fee.  The elimination of the fee, coupled with the enhanced search requirements being proposed by the OSB, will still keep the insolvency process free from the nosy neighbours.

The OSB has indicated that the proposed Insolvency Record Search system will include modern safeguards to protect the personal information of debtors.  Some of the new protections which are not available in the current system which will protect disclosure of personal information:

  • Personal information disclosed about an insolvent person will be limited to that entered by the searcher. Personal information entered will only be confirmed, not provided in a search result. Searchers will need to know the first, last name, and date of birth of a debtor in order to obtain confirmation of an individual insolvency.
  • The new system will no longer provide access to insolvent debtor records that do not match the search criteria (e.g. lists of names).
  • For each correct search, a reduced amount of personal information will be returned in the public search results. For example, home addresses and full postal codes will no longer be included in search results as they are in the current system.
  • The public record search retention period for information will be reduced to 10 years post-discharge.
  • The new system will include technologies designed to reduce the potential for unintended uses of insolvency information (e.g. machine-based searches).

From what I know about the OSB, I would be surprised if this mandate was undertaken without some regard to the privacy of the individual debtor. The OSB has stated that it has consulted with the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) throughout the development of the new system, and has addressed comments received to date. The design will maximize protection of personal information while also meeting the specific needs of LITs, in fulfilling their insolvency estate administration and legislative requirements.

It should be noted that the OSB has no plan to propose to remove the $8 fee from the current system prior to its being retired from service.

The full OSB article about this can be viewed here.

The experienced professionals at Boale, Wood & Company Ltd. understand the stress that financial difficulty can cause.

We know that realizing that you are experiencing financial problems is a hard thing to do for most people and sometimes you feel helpless. But instead of feeling helpless, let us help you gain control of your debts and understand your options.

Start by scheduling a meeting with us to discuss the solution best suited to your situation. This meeting is free and there is no pressure or obligation for you to make a decision right away.

We have the expertise to find the solution best suited to you.

Call us, it’s not too late. (604) 605-3335.

David Wood voted Top Three Licensed Insolvency Trustee

David Wood is pleased to have been selected as one of the Top Three Licensed Insolvency Trustees in Vancouver BC., for the second year in a row by Three Best Rated.  As well, he has been chosen one of the Top Three Trustees located in Surrey, and New Westminster BC by the same firm.

Boale, Wood & Company Ltd., has been selected one of the Top Three Licensed Insolvency Trustees in Coquitlam.

Too much debt.

Call us. Its not too late.

(604) 605-3335