ask-a-trustee

Consumer insolvencies in BC increased in September 2022 overall by 33.5 percent from September 2021.  Consumer proposals increased 52.9 percent while bankruptcies decreased 21.3 percent. 

Consumer insolvencies in all of Canada for August increased 22.1 percent over the same period last year.  BC accounted for 9.96 percent of all consumer insolvencies in Canada in September 2022.

The proportion of proposals in consumer insolvencies in BC accounted for 84.6 percent of all BC insolvencies September 2022 while they accounted for 76.1 percent for all insolvencies across Canada for the same period.

The proportion of proposals in consumer insolvencies in BC was 77.6 percent during the 12-month period ending September 2022, up from 73.7 percent during the 12-month period ending September 2021.  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.

Insolvencies across Canada increased 3.08 percent from August 2022 to September 2022. Bankruptcies increased 1.9 percent and proposals increased by 3.5 percent.  Proposals also make up 77.8 percent of all insolvencies for the pervious twelve months, up from 68.3 percent in the previous twelve months.

The insolvency statistics indicate the benefits of the protections provided to consumers under the Bankruptcy and Insolvency Act over other non-legislated options.  The filing of a consumer proposal or a bankruptcy comes with legal protections that other service providers cannot give.   You are protected by Federal Law. 

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.

If it sounds too good to be true, it probably is.

The Office of the Superintendent of Bankruptcy has issued a News Release/Consumer Alert alerting those Canadian Consumers who are in financial difficulty to be aware of unregulated, unlicensed debt advisors that claim to be authorized to assist you with insolvency options.
 
These firms sometimes charge hundreds or even thousands of dollars for services they are not licensed to provide, or for unnecessary services offered before, during or after a consumer proposal or bankruptcy filing.
 
The release states that Canadian Consumers meet with a Licensed Insolvency Trustee (LIT).  LITs provide independent, unbiased advice about the options to deal with debt. LITs are required to assess your financial and personal situation, and to discuss all options available for solving financial difficulties, including insolvency and non-insolvency options.
 
Quotes from the news release:

You can read the entire release here.
If you are in debt, you need to call us. It’s not too late.

Consumer insolvencies in BC increased in August 2022 overall by 33.4 percent from August 2021.  Consumer proposals increased 44.0 percent while bankruptcies decreased 0.6 percent.  

Consumer insolvencies in all of Canada for August increased 26.7 percent over the same period last year.  BC accounted for 10.6 percent of all consumer insolvencies in Canada in August 2022.

The proportion of proposals in consumer insolvencies in BC accounted for 82.3 percent of all BC insolvencies August 2022 while they accounted for 75.9 percent for all insolvencies across Canada for the same period.

The proportion of proposals in consumer insolvencies in BC was 80.0 percent during the 12-month period ending August 2022, up from 73.2 percent during the 12-month period ending August 2021.  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.

Insolvencies across Canada increased 13.6 percent from July 2022 to August 2022. Bankruptcies increased 9.8 percent and proposals increased by 14.8 percent.  Proposals also make up 77.33 percent of all insolvencies for the pervious twelve months, up from 68.03 percent in the previous twelve months.

The insolvency statistics indicate the 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.

Have you received a repayment letter from CRA and don’t have the funds? You’re panicking because you don’t know where the money is coming from. Don’t panic. We can help.

The government began to verify the payments it sent to almost nine million Canadians through the Canada Emergency Response Program (CERB). A lot of Canadians are being told they have to pay back some or all of the money they received as the government has determined they were ineligible for the amount received and/or because they received an advance payment that was never reconciled.

The CRA said they have started sending out Notices of Redetermination, or more correctly put, collection notices, to Canadians who turned out to be ineligible for some or all of the CERB they received.

Ignoring the CRA is never a good way at dealing with taxes, whether it be repayment of CERB or just personal income taxes. CRA can seize your bank account or garnish your wages. That could have a huge impact on your life when the money you have for rent and food is suddenly gone.

So now what? Call us. We can help you. The most important thing you can do is ask for help if you need it. Being in debt and struggling just to meet living expenses during high inflation is more common than you think. It’s not too late to seek professional help and find out what your options are.

Call us. It’s not too late!

Boale, Wood & Company Ltd.

(604) 605-3335

BC Court confirms single date approach to discharging Student Loans through a consumer proposal or bankruptcy. 

A recent decision by the BC Supreme Court confirmed that BC will continue to follow the single date approach when considering whether or not a Student Loan is dischargeable through either a consumer proposal or a bankruptcy. 

In the recent decision of Re: Piekut (2021 BCSC 1883) the Court declined to change the single date approach to a multiple date approach when considering if Student Loans are discharged in ether a consumer proposal or bankruptcy and continued to follow the current jurisprudence that was established in 2015 in the BC Decision of Re: Mallory (2015 BCSC 5). 

Background 

The current legislation provides that if a student loan is more than seven years old at the date of a bankrupt’s filing, or the filing of a Consumer Proposal, it is dischargeable as a debt under the Bankruptcy and Insolvency Act. If it isn’t greater than seven years old then the debt is not dischargeable. 

It may be discharged if the student makes a “hardship” application once it is more than five years post-study but less than seven years of the filing of the bankruptcy or consumer proposal (more on that later in a subsequent paper). 

We understand that Student Loans considers the End of Study date as the date when an individual ceased or ceases to be a student. This date doesn’t mean the last day you attended school. It is the date that the government considers to be the last date of the program you were last enrolled in. It also includes both full-time and part time attendance. 

The applicant raised the issue of whether the BC Court should continue to use the “single date” approach as decided in Mallory or “multiple date” method of determining whether a student loan is discharged under s. 178(2) of the BIA which has been used in other jurisdictions. 

Does a student who is in-and-out of school, with or without student loans for each (or any) session, reset the clock each time they enroll, or does the clock stop each time they cease study? In BC the answer is the clock resets as decided in Mallory and confirmed in Peikut. The end result is that the student loan survived the proposal and was not discharged under the BIA. 

Different jurisdictions have taken a “multiple date” approach. However, in BC that has been rejected. 

We understand the decision is being appealed. 

If you have Student Loan debt that is unmanageable, contact us today. We offer a free no-obligation consultation where we will look at all your debts with you and help you decide if a bankruptcy or consumer proposal makes sense to deal with your student debt. 

A virtual meeting is available via Zoom or Microsoft Teams. Or we can chat on the phone or by email. If you would like an in-person consultation, we can arrange that as well. We have offices in Vancouver and Surrey. 

Call us. Its not too late! 

(604) 605-3335 

In Canada, one of the most common, if not the most common, debt relief program is a Consumer Proposal. 

Other debt relief programs, commonly referred to as Debt Management Programs, (“DMP”) or Debt Consolidation Programs, typically do not reduce debt. 

To help understand the difference between the two, Boale Wood has posted detailed information on the differences. See this page for more.

Dear clients and friends of Boale, Wood & Company Ltd. As you all are aware, the World Health Organization (“WHO”) recently declared the coronavirus (COVID-19) a global pandemic. This evolving situation is affecting our firm, our clients and our communities in rapidly changing ways. The health and well-being of our firm members, colleagues and clients is paramount and will guide us as we collectively respond to the developing COVID-19 outbreak. We will continue to closely monitor relevant WHO, Public Health Agency of Canada, and local governmental/health institutions, for guidance on travel, staff exposure, premises and preventative measures to ensure our plans and response aligns with the latest recommendations and best practices. As part of our initial response plan, we have instituted the following for debtors until further notice: 1. Counselling Sessions – will be held via telephone or video conference. There will be no need to attend our offices in person. 2. Meetings of Creditors – recently updated Directive 22R2 encourages the Chair of a meeting of creditors to make every reasonable effort to hold creditor meetings by electronic or digital means of communication. The chair of the meeting may rely on representations by attendees to confirm their identification. 3. Initial Assessments - Directive 6R3 provides for the use of methods other than in-person assessments in extraordinary circumstances. In our firm, we are able to do almost everything via email or fax or by telephone. 4. Documents that require signature can be exchanged via email, or other electronic means, and we can provide debtors the necessary support to explain the documents via videoconference or over the phone or as otherwise required. We are exploring legal methods for the witnessing of signatures and swearing of oaths. This will be assessed on a case by case basis. There is no disruption in service. We are available to assist debtors in need and all our current clients. We have also instituted a number of internal measures for our staff for their health and safety: 1. Encouraged our staff to work remotely from home to avoid public gathering on transit or other areas; 2. Requested that firm members refrain from attending large business events outside the office; 3. Requested our landlords to have implemented enhanced cleaning and disinfecting protocols in our offices; 4. Implemented and are regularly updating policies for personnel who become ill or are concerned that they may have been exposed to the virus; and, 5. Encouraged our staff to turn to reputable sources of information, rather than rumours and unfounded speculation. If you have any questions regarding the firm’s response to COVID-19 or resources we can provide, please contact me at (604) 605-3335. We wish you and your loved ones good health and safety in these challenging times. Yours very truly, Boale, Wood & Company Ltd. Licensed Insolvency Trustee Per: David S. Wood, CIRP President  

Now What?

When you owe the government money, it can be overwhelmingly stressful.  It doesn’t matter if it is for taxes, student loans or even Medical Service premiums.  Most consumers assume that the government has an endless means available to them to collect the debt. The Government of Canada, through its various departments of the Canada Revenue Agency (CRA), are responsible for the issuance of income tax refunds, pension and old age security, GST/HST and provincial credits and other government issued income sources.  When you owe the CRA money, there is concern that any collection action will result in loss of income and will leave an individual without sufficient resources to meet their basic living expenses let alone any other debt payments. What Can They Do to Me? CRA has the right to proceed with collection action without a Court Order.  It can be as simple as issuing a Requirement to Pay to your employer (garnishee) or a Set Off Notice to the department that issues CPP benefits.  In essence the government can:

• Garnishee your wages up to 50 percent of gross earnings of employment income (usually it’s at least 30%);
• Garnishee up to 100 percent of self-employed income (especially if you owe GST or payroll deductions);
• Put a freeze on your bank account and seize the funds on deposit and continue to seize subsequent deposits;
• Withhold certain tax credits such as GST/HST refund cheques and set those credits off against the debt;
• Arbitrarily assess any unfiled income tax returns and apply penalties and interest to the debt owing; and
• If you are a homeowner, file a lien on your property that would ensure the debt is paid if the property is sold.

Why would this occur? These actions will usually be taken by CRA when the following occurs:

• The tax debtor has ignored their obligation to pay the taxes owing;
• The tax debtor has ignored all phone calls and letters from CRA requesting contact;
• The tax debtor is non-compliant in their tax filings leading to arbitrary assessments;

To avoid collection by CRA, you need to file any outstanding tax documents and continue to file your income tax returns on time each year. CRA is big on tax compliance.  It’s not illegal to owe them money but it is illegal not to file your returns. This will help you improve your situation by complying with the tax laws. It also helps you determine how much debt you owe them. Once the amount is determined, you can figure out how you’re going to pay them and also know how much you should be sending them each month for next year's tax debt so you do not continue to have debt owing year after year. Sending them the money monthly avoids the temptation to spend it and   will help stop the cycle of owing taxes every year. After your returns have been filed, start making some meaningful payments towards the debt.  The CRA may ask you to provide various documents to help them determine a suitable monthly payment. This may include an income and expense statement that outlines your other financial obligations. Expect to sacrifice some of the niceties of life, such as recreation or vacations, to get this debt under control.  This applies not to just CRA debt but also to other debt. And finally, make sure you stick to the payment plan that was agreed. CRA wants to see a concentrated effort and compliance with the income tax obligations.  Whatever you do, don’t enter into a payment arrangement that you can’t keep.  You will miss payments and CRA will start collections once again. They Want More Than I Can Reasonably Afford Despite your best intentions to pay the debt, sometimes it is not enough when you owe a lot of money to CRA.  It may be the amount of the debt is just too high or perhaps the budget does not allow for a monthly payment.  If that is the case, it is recommended you speak to a Licensed Insolvency Trustee (“LIT”) to discuss your options. LITs are debt professionals and can assess your financial situation to determine if a bankruptcy or proposal is the best choice to allow you to make a fresh start. In most cases, debt owing to CRA can be included in a bankruptcy and proposal. With a few exceptions, CRA is treated like any other creditor in insolvency proceedings and must stop their collection activity once a bankruptcy or a proposal is filed. An LIT can also provide continued support to make sure that you are not at risk for incurring future tax debt through the two mandatory counselling sessions. Beware of Scams Scammers posing as Canada Revenue Agency (CRA) employees continue to contact Canadians, misleading them into paying false debt. These persistent scammers have created fear among people who now automatically assume that any communication from someone representing the CRA is not genuine.  To be sure that it is not a scam, review this website as to what CRA will and won’t do. Contact one of the Licensed Insolvency Trustees at Boale, Wood & Company Ltd. for a free consultation.  We will be able to advise you on what solutions are available to help you address the problem. Call us.  It’s not too late. (604) 605-3335.  

Consumer insolvencies in BC increased in November 2018 overall by 1.0 percent from November 2017.  Consumer proposals increased 6.7 percent while bankruptcies decreased 7.7 percent. Consumer insolvencies in all of Canada increased 5.1 percent over the same period last year.  BC accounted for 7.92 percent of all insolvencies in Canada in November 2018. The proportion of proposals in consumer insolvencies in BC accounted for 63.73 percent during November 2018 while they accounted for 58.93 percent for all insolvencies across Canada for the same period. The proportion of proposals in consumer insolvencies in BC was 59.68 percent during the 12-month period ending November, 2018, up from 57.99 percent during the 12-month period ending November 2017.  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 5.1 percent, bankruptcies are down 3.6 percent, but proposals are up by 12.1 percent.  Proposals also make up 55.67 of all insolvencies in Canada in 2018 up from 52.4 percent in the previous twelve months. 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. For more on the the all Canada statistics, see this page.