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Insolvency Update: July 2018

Dealing with Debt
Consumer Proposal vs Home Equity Loan or Second Mortgage
The 100% proposal


If you are struggling with high interest credit card debt or balancing multiple loan payments every month you may be looking for a way to consolidate your debt into your home mortgage, a second mortgage or a home equity loan.  This assumes that the equity in your home is greater than what you owe.  But you need to ask yourself, is this the best option or are there other options that are better?  Before going to your bank, mortgage broker or a credit counsellor, you should consider seeing a Licensed Insolvency Trustee (“LIT”) to talk about a consumer proposal. 

 
A consumer proposal is a way to combine your unsecured debts into one lower monthly payment and may allow you to get out of debt sooner. Yes, even when you are paying your debts in full plus the fees of the LIT.  And you are not subject to any qualifying criteria or interest rate fluctuations.  So, when does it make sense to either file a consumer proposal or refinance the equity in your home. 

 

See Our Detailed Article Including Comparison Charts on our Website


Tips on Taking Control of Your Debt


Is your debt starting to feel overwhelming? Minimum payments will keep creditor calls from coming but, you realize that you’re treading water.  Is it time to panic or deal with your debt head on?

We have 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.
 

See Our Debt Control Tips in this Article on our Website



Media Covers Lawsuit Aimed at Son of Ponzi Schemer
 

The popular online publication Vancouver Is Awesome, and the North Shore News have published a new article on the latest development in the on-going story regarding Virginia Tan. Last year, Tan admitted to fraudulently raising at least $30 million from investors as part of a Ponzi scheme. The admission was part of a settlement with the BC Securities Commission.

 

This latest story covers details of a lawsuit aimed at Tan's son.  The story, by reporter Jane Seyde, explains:
 
"Bankruptcy trustee Boale, Wood and Co. filed a notice of claim against Marcus Soon-Keen Tan of North Vancouver, alleging six properties he acquired in connection with a real estate development in Surrey since 2011 were bought with funds his mother defrauded from investors.

 

The bankruptcy trustee is asking the court to transfer ownership of the properties to the trustee for the creditors’ benefit or for Marcus Tan to pay back investors whose funds were allegedly used to buy or make payments on the properties.

 

The trustee has also asked the court for records tracing money received by Marcus Tan from either of his parents and for assets bought by him with funds from either of them. No statement of defence has been filed and none of the claims have been proven in court."

You can read the story in Vancouver is Awesome,  or on the North Shore News online.

 

Self Employed and Owe CRA? 



The June 15 deadline for self-employed individuals to file their 2018 tax return has come and gone.   And if you don’t have the funds to pay your tax bill you are probably wondering what can be done.

If you owe taxes and are struggling to come up with the funds to pay the Canada Revenue Agency (“CRA”) you need to speak with us right away.  Don’t delay.

There are debt advisors out there who state that they can “settle” or “reduce” a tax debt with Canada Revenue Agency. If it sounds too good to be true, then it probably is. 

They don't "negotiate" and they don't "settle" tax debts. CRA is not your typical creditor.  They didn’t choose to lend you money and become a creditor.  They become a creditor by virtue of the self reporting tax system we have.  And they want to be paid. In full.
 


Can I Pursue an Undischarged Bankrupt For Collection?


Yes, but not until the Licensed Insolvency Trustee (“LIT”) is discharged AND the bankrupt is not discharged. 

When a person declares bankruptcy, there is a Stay of Proceedings that prevents creditors from pursuing collection of their debt.  The Stay is automatic.  It is not a Court Order and doesn’t have to be applied for.  It is set out in the Bankruptcy and Insolvency Act.

The Stay of Proceedings protects the debtor from any collection activity by his unsecured creditors and allows the LIT to administer the estate without creditor interference.  When the debtor is discharged all his unsecured debts, with a few exceptions, are erased.

In some cases the debtor does not obtain a discharge from their bankruptcy.  This is usually due to the debtor failing to perform the duties imposed upon them, or hasn’t paid the estate pursuant to a Mediation Agreement or Court Order.

Once the LIT is certain the debtor is not going to honour his obligations, the LIT would typically proceed to close its file and seek their own discharge from the bankruptcy.

At this point the Stay of Proceedings is lifted and the debtor’s creditors can pursue him for debt collection just as though he was never in bankruptcy.  However, there is nothing stopping the debtor from then going back to the LIT to comply with their duties and seek their discharge.

This is why it is so important for debtors to obtain their discharge.  It's not about getting onto bankruptcy, it's about getting out.

Call us.  It’s not too late. (604) 605-3335.   Read this article on our website.

OSB Issues Report on 10 Year Insolvency Trends

The Office of the Superintendent of Bankruptcy recently issued a report on Ten-Year Insolvency Trends in Canada.  The ten year period covers 2007 – 2016.  The statistics show that the trends have been fairly steady for the last 10 years with the exception of the recession of 2008 – 2009.
 

See this article on our website for complete details including graphs and data for British Columbia

 

Half of British Columbians need raise to pay off debt.

 

IMF flags housing at economy risk in Canada.

Bank of Canada deputy governor's "Progress Report on the Economy".


About Our Newsletter


Our newsletter is aimed to inform the reader on various matters.  If you find an article that you would like to share with someone you know, please feel free to share our newsletter with anyone you want.  If they wish to sign up for our newsletter, its easy.  Just visit our website on the newsletter page at http://www.boalewood.ca/resources/newsletter/

This newsletter is designed to inform readers of various matters relating to insolvency.  The comments provided are, of necessity, brief and should not be relied upon as legal advice.  We encourage you to contact us for advice in the context of a particular situation.

Should you have any questions relating to this topic or any other insolvency matter that you may have, please contact David Wood, Lisa Breault, Stephen Boale or John McEown at:
 
Telephone:   (604) 605-3335
Fax:  (604) 605-3359

Email:
David Wood:  dwood@boalewood.ca
Lisa Breault:   lbreault@boalewood.ca                
Stephen Boale:  sboale@boalewood.ca
John McEown:  jmceown@boalewood.ca
Getting Help with Your Financial Difficulties

We realize that you’re looking for people you can trust to be discreet, professional, and give you the right advice.

We provide creative and practical insolvency advice to both individuals and companies facing financial difficulty.

We offer a full range of insolvency services to individuals such as consumer proposals to your creditors, financial counseling and bankruptcies.

We also offer a complete range of business services including formal restructurings, informal workouts, proposals to creditors, receiverships and bankruptcies.

Contact us for a free initial consultation.

Do you have a question for a Licensed Insolvency Trustee?  

Some of your questions may already be answered on our Ask a Licensed Insolvency Trustee page.  

We also have a Frequently Asked Question section that may have the information you're looking for.

You can also follow @askastrustee on Twitter.
 

Please feel free to forward this email to a friend.

Copyright © 2018 Boale, Wood and Company Ltd., All rights reserved.


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