Posted On: October 9, 2014

Gambling can be a serious and addictive behaviour that plays havoc with people’s finances as they chase their losses. More importantly, it can have a really devastating effect on peoples’ lives.

According to government stats, there are a couple of hundred thousand problem gamblers in this country. The situation is becoming more acute as sanctioned gambling grows with casinos, lotteries, racetracks, video lottery terminals and various online outlets.

There are two parts to the gambling problem: the compulsive behaviour itself, and the debts that accumulate from it. We at Richard Killen & Associates Ltd can’t do much for the compulsive behaviour part, but we can usually do an effective job on the debts.

The debts acquired from gambling are generally categorized as ordinary unsecured debts in either a bankruptcy or a proposal. That means they will generally be discharged upon completion of a bankruptcy, or paid off on completion of a proposal.

Even so, if gambling is a major cause of a bankruptcy it can still create obstacles to a discharge. It depends on the seriousness of the gambling and the steps the individual is taking or has taken to get the compulsive problem part under control.

The bankruptcy court tends to look on a gambling-related bankruptcy as something that needs to be corrected. It will want assurances that the problem is under control and the bankrupt is fully committed to reforming his or her behaviour. If the court doesn’t get a warm, fuzzy feeling about a person’s commitment to stopping the addictive behaviour, it might even reflect this in its discharge decision. It can all get a bit messy.

Having said this, a trustee may well be your only way to solve the debt part of problem gambling. There are a few different options available, and a trustee like Richard Killen & Associates Ltd. can tell you all about them.

One thing’s for sure. There’s no need to gamble with your future. Come to Richard Killen & Associates for a free assessment. We can help you get the odds back in your favour.

Posted On: August 14, 2014

A creditor or collection agency has placed a Garnishee Order against you, and you are wondering “how do I stop wage garnishment in Ontario?” Wage garnishments can cause a devastating blow in your life and pack a double whammy. Not only do you lose control of your finances, but you also have the embarrassment of your employer knowing that you are suffering money troubles. So how do you keep your salary in your hands?

Wage Garnishment Ontario: Who can garnish your wages in Canada?

Wage garnishment is a legal proceeding set in motion by creditors, including collection agencies, credit card companies, payday loan lenders, and the Canada Revenue Agency. Fortunately, except for the government agency, which can garnishee your wages without a court order, the creditors must take you to court and sue you to obtain a garnishee order.

What is a Garnishee Order?

This refers to a person or entity such as your employer, customer, or bank. They are ordered by the court to seize your wages or payment and surrender it to settle a claim or debt.

How much can the government garnish your wages in Canada?

Once they have the right to do it, a garnishee can take from 20% up to 30% of your gross wages. If you are self-employed, they might seize all of your receivables. If you are a contract worker, they can garnish up to 100% of your income.

However, there is a limit on how much a creditor can take from your income or bank account. The government may propose exemptions and additional protection to safeguard your earnings and bank balance for certain situations. An example of this is if you are the head of the household and have dependent children.

Can wage garnishment be stopped?

To stop this cold, or prevent it from happening in the first place, it is best to act quickly. The first step to take is to talk to a licensed insolvency trustee. A trustee can explain it all to you and make it happen. You will be happy to know that you have more than one option to stop it, not just bankruptcy.

How to stop a court-ordered wage garnishment?

One option is to negotiate a consumer proposal for you with your creditors. Even just making the official offer will stop all other legal actions related to your debts, including wage garnishment, immediately. Then, if they accept your proposal offer, it would consolidate all your previous monthly payments into just one – to the trustee – for one monthly payment that you can afford. On the other hand, if necessary, you can file bankruptcy that will stop all wage garnishments, whether the creditor likes it or not. There is one exception to this. A garnishee for child support will not be stopped.

Being garnisheed is, at the very least, an unpleasant experience. For most people, it makes it very hard or even impossible to live a normal life. It will come as no surprise when I say that a garnishee or threat of a garnishee is one of the main reasons people come to see us. They just have to do something to stop it and thank goodness Richard Killen & Associates can do that.

If you need to stop wage garnishment and bank account freeze as well as avoid payday devastation, you can talk to a licensed insolvency trustee for a free consultation and get the results you need. Remember, it may be the most stress-relieving call you ever make.

To sum up and answer the question “how do I stop wage garnishment in Ontario or stop a garnishee order?”, talk to a licensed insolvency trustee at 1 (888) 545-5365 for a free consultation.

Posted On: July 18, 2014

Well, because their debts exceed their means to pay them.

OK, after stating the obvious, here’s a bit more detail. More than 118,000 Canadians a year are filing for bankruptcy or doing consumer proposals. Here are some of the top reasons why.

Excessive Use of Credit
Not surprisingly, this continues to be leading cause of bankruptcy. Many of us spend too much, save too little and rely too much on plastic credit. The problem of being overextended can combine with one of the reasons below to push people over the edge. While carrying a heavy debt load, they might, for example, get sick and become unable to work, leading to financial disaster. Mortgages, bank and finance company loans, taxes and student loans are some of the other types of credit that fall into this mix.

Job Loss or Seasonal Employment
If you lose your job, or are without work for extended periods, then it is hard to stay on top of debt payments. Even having work hours cut back or overtime eliminated can lead to financial problems. To make ends meet, a cash-strapped family might turn to credit cards to pay monthly bills, digging a deeper hole for themselves. Building an emergency fund is the best way to cope with this kind of problem.

Medical Problems
The difficulties with medical issues aren’t as acute in Canada, with our public health care, as they are in the United States, where serious diseases or injuries can lead to massive bills that can wipe out savings, retirement accounts and education funds. Still, if you are laid up and can’t work, without adequate insurance or savings, then a spiral down into insolvency may be inevitable. And not all medical costs are covered by health care or insurance.

Marital Dissolution
Divorce and separation can cause a number of financial hardships. First there can be hefty legal fees, which themselves may drive people into bankruptcy. Division of assets, child support and alimony can also cause severe problems. Wage garnishments, if support or alimony payments are not kept up, can drive some ex-spouses over the edge. And others who don’t receive their court-mandated support can also find themselves floundering.

The list of other common financial pitfalls can include failed businesses, non-payment of taxes, inadequate pensions, unexpected disasters and gambling problems. When faced with these kinds of problems, you should seek out the advice of an experienced Licensed Insolvency Trustee, such as Richard Killen & Associates, who will guide you through your options and help you find the quickest road to recovery.

Posted On: June 30, 2014

Death and taxes are inevitable. For some they are the same thing.

Fear of the tax man may be justified. As a creditor he has super collection powers that ensure that most people don’t have a smile on their face when they receive a notice from the Canadian Revenue Agency (CRA).

Among the things the agency can do are charge penalties and interest on all overdue accounts, withhold child tax credits and GST credits, and garnishee your bank account and pay. Without your consent, it can register a lien against your home. And it can take actions without going through a court process, as other creditors are forced to do.

But the news is not all bleak. Some people labour under the misconception that tax debts are not included under a personal bankruptcy. They in fact are, so when you receive your bankruptcy discharge, back taxes are usually included.

This is, if you owe the government less than $200,000 in back taxes. If you owe more in personal income tax debt, representing 75% or more of your total unsecured debts, then you must appear in bankruptcy court to decide if any conditions should apply to your discharge.

If you are undergoing a bankruptcy, then some special handling of your income taxes is required. The trustee will prepare two tax for you during the course of a year. A pre-bankruptcy income tax return must be filed from January 1 to the date of bankruptcy. Then a post-bankruptcy return must be filed from this date to the end of December.

If there are any funds in a return from the post-bankruptcy filing, then they are paid to creditors. Any taxes owed prior to the bankruptcy are discharged. And if there is an amount owing the government on the post-bankruptcy tax return, then it is up to you pay it.

Negotiating the ins and outs of taxes and bankruptcy can be a tricky and delicate process. Consult an expert at Richard Killen & Associates so you can discover your options and keep the tax man off your back.

Posted On: June 23, 2014

For more than 20 years, Bill had run a successful Toronto tree care business, doing tree removals, pruning, planting and much more. His finances fell into the rhythm of the growing season. In the spring, the work would flood in and then taper off into the summer and fall.

In the winter, during his downtime, Bill would use credit cards to finance advertising, equipment purchases, insurance payments and personal expenses. He would depend on the work coming in the following spring to pay things off and get him ahead in the game.

The system  worked until a few years ago, when a perfect storm of bad luck gave his credit heart rot. First the nature of the business had changed, with the Internet killing off traditional advertising channels and flooding the market with cut-rate competition, often under-insured and without much real experience, but still appealing to the price-conscious consumer.

Then there was the economy that had taken a plunge, limiting people’s budgets for yard care. “If they only have $3,000 and have a choice between getting tree work done or going on a vacation, what do you think they are going to choose?” says Bill.

But the leaf that broke the branch was the four trips on credit that he took to Costa Rica, arranging to bring his new wife back to Canada. “I thought that I’d make up the money with the spring boom,” he says, “except that that year it didn’t come.”

Bill found himself with a maxed out line of credit and three credit cards owing about $12,000 apiece. He was finally unable to make payments that were high as $5,000 a month. “I felt real shame,” he recalls. “Once I had walked around with a thousand bucks in my pocket and now I didn’t have enough money to buy food for my wife and baby. That’s really scary.”

A friend suggested he go to Richard Killen & Associates, to get a free consultation so he could understand his options to deal with the crisis. “When I went in to see Richard [Killen], I felt horrible,” he says. “But by the time, I left I felt excellent. It was the best day I had in a long time.”

A large part of the Licensed Insolvency Trustee’s job was to give Bill a reality check. Still deep “in denial,” he hoped that he could find someone to give him a loan to buy his way out of the crisis. Killen pointed out that throwing more money into the pit would not solve his financial problem and would in fact make his position worse.

When people see a trustee they learn that they have options other than to simply go bankrupt. One of the most important things the trustee should do is carefully explain the consequences of the various options available. In Bill’s case;, after fully digesting what Killen explained to him, he determined that the best course of action was bankruptcy.

Bill’s main concern was that he needed to keep his business going, because like everyone else he still had to earn a living for himself and his family. As Richard explained, a bankruptcy would not deprive Bill of that right. Even in complying with the legal requirements of the bankruptcy, Bill was able to keep all his equipment, including his tree truck, and chipper – the mainstays of his business.

It came as a big surprise to Bill to find out that a bankruptcy generally allows a self employed person to retain his ability to make a living. Most people believe or have heard that if they go bankrupt they lose everything. That’s just not the case.

Today discharged from his bankruptcy, Bill is more careful about how he uses credit for his business. He tries to pay as he goes with a debit card. He and his wife have a secured credit card with a $2,000 limit, ensuring any credit used is covered by what they have in the bank. “I pay off my balance right way,” he says.

As far as his seasonal business, last winter’s ice storm has proven to be a real boon, providing all the tree debris removal business he can handle in the spring. Still, Bill is acutely aware of how quickly his fortunes can change in this line of work, like a healthy maple suddenly brought down by blight.

Asked about what he could do to protect himself from such vagaries, he smiles and says, “We could always move back to Costa Rica. Money goes a lot further there.”

Posted On: June 22, 2014

Hi. I’m Richard Killen from Richard Killen & Associates. Richard Killen has offices across the GTA. One of the most frequently asked questions I get as a Licensed Insolvency Trustee is, “If I go bankrupt or do a consumer proposal, will I lose my home?”

Well, probably not. Sounds evasive, doesn’t it? But it isn’t really. A bankruptcy or a consumer proposal is a legal process, so there are no guarantees. But my experience is if they want to most people keep their homes in a bankruptcy or proposal.

The problem is, people hear so many misleading things out there that they shy away from consulting a trustee like Richard Killen & Associates. They shouldn’t, because a trustee is the only one who can tell them what will happen in their specific case.

So call Richard Killen & Associates today for a free consultation at our office nearest you, 888-545-5365, or visit us online at killen.ca. It may be the most stress-relieving call you ever make.

Posted On: June 20, 2014

Hi. I’m Richard Killen, from Richard Killen & Associates. When you fall behind in your debt payments and creditors and agencies start calling, simply answering the phone can be an ordeal, especially if it’s never happened to you before.

As a Licensed Insolvency Trustee, I see people in this kind of situation every day. The good news is that we at Richard Killen can actually help you with this problem.

The Bankruptcy & Insolvency Act immediately puts a stop to collection calls, lawsuits, even garnishees, and you don’t even have to go bankrupt. But only a trustee like Richard Killen & Associates can provide this for you.

So call Richard Killen & Associates today for a free, no commitment consultation at our office nearest you. We have offices across the GTA. Call 888-545-5365. Or visit us online at killen.ca. It may be the most stress-relieving call you ever make.

Posted On: June 18, 2014

“I thought the process was going to be hideous, humiliating and shameful,” Karen recalls of her bankruptcy more than a decade ago. “I was terrified when I went to see Richard Killen. I was in tears as I walked into his office.”

Karen’s story of battling debt is a familiar one. She had decided to make a brave midlife career change from working as a bartender. Finding employment in a Toronto health food store, she made the decision to go back to school to get certified as holistic nutritionist.

In classes for two years and working for close to minimum wage, she had to get student loans to make ends meet. And when this money fell short, she dipped into a line of credit.

“I found myself in about $30,000 of debt,” says Karen. “Things had gotten out of hand. I was scared and didn’t know what to do. But I talked to a friend who had gone through a similar crisis and he suggested I go to see Richard at Richard Killen & Associates.”

Karen was quickly reassured in her first meeting with Richard. “I sat down in the chair and he just made me laugh – in a nice way. He was just very kind to me. He assured me that this kind of thing happens to people and it doesn’t mean that they are bad or that they have to go through a humiliating experience.”

Killen points out that making mistakes simply qualifies all of us for membership in the human race. “We all make mistakes – every day,” he says from his Toronto office. “It’s what we do about them that defines who we are. This is something we forget when we are swamped by the problems.”

Killen then outlined her options, helping Karen to realize that not only could she survive but successfully manage the bankruptcy process. Most importantly, he made her realize that the choices were hers – nobody else’s. “He never left me hanging. If I called he was always available,” she says. “I always knew how I was doing during the nine months of the bankruptcy process.”

Karen was fortunate to able clear away her student loans along with her other debts when she received her bankruptcy discharge. “Student loans are different from regular debts such as credit cards,” explains Killen. “They are not given for normal profit-making reasons. They are meant to help us improve our future life by improving our education, so it’s understandable that they should be given special status under the law. A person has to make a reasonable effort to pay them back. However, sometimes no matter how hard a person tries they just can’t do it. If after seven years a person still can’t pay then the student loans qualify to be treated like any commercial debt. This is what happened with Karen”

Within a year of going bankrupt, Karen hit her new career path with full force. She managed a series of health food stores, worked in an holistic apothecary and had clients on the side for her holistic nutrition counselling.

A couple of years ago, she decided to make another major life change – less a career shift than giving herself space to understand and act upon her priorities, truly achieving that elusive work-life balance. She returned to the support network of friends and family in small-town Nova Scotia. And while she considers her next move, she is doing part-time work and volunteering in the kitchen of a Buddhist centre, practising meditation and finding a measure of serenity in the combination.

“The great thing is,” says Karen, “if I hadn’t gone through the bankruptcy process I wouldn’t be where I am today. It’s given me the space to get on with my life. As hard and distasteful it was to contemplate beforehand, it turned out to be one of the best things I could have done.”

Posted On: June 16, 2014

People sometimes ask: “If I go bankrupt will the trustee take all my income?” Well the simple answer is NO. But to understand that answer you need to wade through some layers of legal complexity.

While you go through bankruptcy, the trustee is required to monitor your income to see if maybe some part of it should go to your creditors. Remember, you have stopped making any payments directly to those creditors, so they are not getting anything from you. But, assuming you’re working and have  income, it’s fair to ask whether any portion of your income should go to the creditors.

In the old days this question had to be answered by the court on a case-by-case basis. But since the early 1990s, the courts couldn’t keep up with the rising number of  bankruptcies, so the government decided to let the trustee handle this question. After all, the trustee takes care of practically everything else. However, to ensure that consistency and fairness is maintained across the country, the government gave the trustees a strict formula that enables them to work out a solution that is fair and protects both your rights and your creditors’.

Every year, using the latest cost of living statistics, the federal government sets a “Standard” based on how many people live in a household. (Obviously the more people in the house, the more money these people need to get by.) This standard establishes a threshold. If your family income exceeds the applicable threshold, you are deemed to have “Surplus Income.” If you have a surplus, you may pay half  the amount to a trustee for the benefit of the creditors. The formula is  fair and most people have no problem with it.

Here’s an example:  You’re part of a family of two who has a total combined after-tax income of $2,908. This is exactly $400 more than the standard threshold for a two-person family ($2,508). So the bankruptcy law requires you to pay half of this $400 surplus income, $200, to the trustee for the creditors. The Industry Canada website has all the details.

While this formula is  fair,  it can get complicated, especially since everyone’s situation is different. For instance, you have the right to question and disagree with whatever number the formula comes up with. There is a mediation procedure in place that can help you to work out a compromise.

Since the issue of surplus income may  affect your decision about what course to take to solve your debt problems, you need to know the facts and your options. The best way to do this is have a trustee at Richard Killen & Associates explain them to you. It doesn’t matter how much surplus income you may or may not have, the consultation with us is truly FREE.

Posted On:

People often ask, what is a consumer proposal what is the consumer proposal meaning or definition and how similar is it to a debt consolidation loan? A proposal is like a consolidation loan where your payments are made affordable and downgraded into a single monthly payment term. You can make the payments to a trustee who accumulates them and pays the money out to your creditors every six months.

Consumer Proposal Meaning & Consumer Proposal Definition

A proposal is a debt settlement agreement that you can do with a Licensed Insolvency Trustee.

The thing about it is that it does not necessarily involve paying back 100 percent of what is owed to the creditors. Many times the total amount owed can be reduced by 50% or more. It involves making a new deal with creditors so that they get paid to the best of your ability.

The major difference between an informal arrangement with creditors and a proposal is that the latter has the protections that are built into the law. You are protected by the law until it is determined that the creditors will or will not accept your proposal. They still have the option of turning you down but no one can take legal action against you. However, if you are under an informal agreement, the creditor who does not approve with the arrangement can still sue you, garnishee your pay and seize your assets.

What happens in the proposal?

A consumer proposal can be a solution to avoid bankruptcy if you are having difficulties with your debt payments. Your trustee will review your situation with you and help you determine the best payment term for your financial problem. The settlement will depend on your income and personal assets. The term can cover an interest-free payment of up to 5 years which can lead to bigger savings. A consumer credit proposal can work with various unsecured debts such as bank loans, tax debt, and credit card debts as well as student loan debt.

How will you know that you are eligible for a consumer proposal?

First of all, you need to make sure that you can make payments for a portion of your debts. Secondly, your assets must be of lesser value than your debt which shows the reason why you are not able to keep up with the payments. You must also be a resident of Canada to qualify. Take note that a proposal is regulated by the federal government and you must comply with all of the requirements.

What are the benefits of Consumer Proposals?

Aside from being able to avoid bankruptcy, it can help you save money by reducing your debt by a significant amount and by stopping the interest rates. This way, you can keep your properties. You also do not have to make multiple payments—this will combine your debt into a single monthly payment. Besides, your creditors will have to follow your terms and stop wage garnishments. This is instant protection from the creditors and collection agencies who must stop chasing you for payment.

A CP can be the most effective solution for your financial situation. Legal consumer proposal services can only be provided by a Licensed Insolvency Trustee or a licensed consumer proposal administrator. They will help you understand your debt relief options and help you manage your debt problems. You can book a free consultation with a trustee.

Now that we have answered the question “What Is a consumer proposal?”, you now have a much better understanding of the consumer proposal meaning where you pay only a portion of the debt owed with no interest versus a debt consolidation loan where you pay back 100% of the debt owed, plus interest.