Press Room - Krieger & Company

COVID19 Order Provides Payment Extension For Consumer Proposals

Michael Krieger — Mon, 27 Apr 2020 22:30:13 +0000

A court order was issued by the Ontario Superior Court of Justice on Monday, April 27, 2020, based on a motion filed by the Attorney General of Canada on behalf of the Superintendent of Bankruptcy. This order provides Ontarians who have filed for insolvency with greater flexibility to meet their obligations during this time of economic uncertainty by offering a payment extension. This includes allowing consumer proposal debtors to miss an additional three consumer proposal payments between March 13, 2020, and December 31, 2020, before the Administrator declares the consumer proposal to be in default, as well as extensions of certain operational deadlines. For those outside of Ontario, applications for similar relief are being scheduled to be heard in other provinces and territories on or before April 30, 2020. Of particular significance, the order provides that “an Active Consumer Proposal shall not be deemed annulled pursuant to section 66.31 of the [Bankruptcy and Insolvency Act] unless the consumer debtor is in default of, in the case when payments under the Active Consumer Proposal are to be made monthly or more frequently, the day on which the consumer debtor is in default for an amount that is equal to or more than the amount of three payments plus an additional amount equivalent to up to three payments for defaults that occurred during the period of March 13, 2020, to December 31, 2020“. This provides individuals in a consumer proposal an additional three months extension should difficult times limit their ability to make payments in a consumer proposal. We encourage those in consumer proposals to continue making payments if they are working and able to make those payments. Doing so will still provide a certificate of full performance sooner, improve credit faster, and may reserve these this provision should an unexpected circumstance occur in the future to limit payments. Full copies of the Ontario Orders are provided below: The Order dated April 27 2020 providing an extension of time for making consumer proposal payments or division I proposal payments. The Endorsement dated April 27 2020 accompanying the Order.

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COVID-19: We’re Here To Help With Changes To Our Debt Solutions During COVID-19

Michael Krieger — Thu, 26 Mar 2020 19:55:48 +0000

COVID-19 (Coronavirus) is having powerful impacts on our way of life and our wallets. From increased expenses in obtaining essential supplies, income loss or reduction due to reduced hours and shortages of work, or priorities being focused on supporting family and friends through this difficult time- the economic impacts are significant and will be long lasting. You’re not alone and Krieger & Company continues to support honest Canadian individuals and businesses trying to navigate through this difficult time. As an essential service, we are fully operational remotely and can handle your financial needs without the need to leave your home. We are focused on relieving the stress your financial obligations bring during this difficult time. That said, nothing is more important than the health and safety of our clients and colleagues. Note: PSTN (Public-Switched Telephone Networks) are particularly congested right now. If you struggle to reach us by telephone, please ensure you are trying our local number 905-508-8088. Alternately, please reach out to us via e-mail at hello@krieger.ca or via our contact form and we will call you back right away. What we are doing for COVID-19: New Clients – As always, our assessment of your financial situation and advice is provided only by a licensed insolvency trustee. Potential clients who reach out to us via telephone and e-mail will have an initial assessment booked via videoconference, rather than an in-person meeting. Government changes due to COVID-19 have allowed our assessment of your financial situation to take place via videoconference. You may be asked to provide some information ahead of the meeting to streamline the process. We are still here to help those who are struggling with their debt through the filing of consumer proposals and bankruptcy. Additional Counselling – We have been providing additional counselling sessions, free of charge, to help our clients adjust their personal budgets to their changing circumstances while maintaining proposal payments and other obligations. Counselling Sessions – Counselling sessions are essential in navigating this time when your budget may be stressed, as well as to build your credit during a proposal or bankruptcy process. We don’t need to be together in person to have productive conversations. Our counselling sessions will be held via videoconference with a licensed insolvency trustee or licensed insolvency counsellor. Counselling completion forms and worksheets will be prepared during the session and sent to you for electronic signature. Meetings of Creditors – The Office of the Superintendent of Bankruptcy has updated their directive to encourage a chair of a meeting of creditors to encourage electronic communication in […]

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Mounting Debt Pressure While Insolvency Rates Stable

Michael Krieger — Fri, 16 Nov 2018 16:33:55 +0000

An increase in bankruptcies and insolvencies is predicted within the next year: Canadian Association of Insolvency and Restructuring Professionals TORONTO – (November 16, 2018) – Low interest rates and access to credit have allowed some borrowers to keep up with debt repayments that otherwise would have been unmanageable. However, rising interest rates, coupled with near record high consumer debt levels, are expected to increase the number of Canadian consumers who will be forced into insolvency, according to the Canadian Association of Insolvency and Restructuring Professionals (CAIRP). Historically there has been about a two-year lag between the time interest rates begin to rise and when consumer insolvency filings start to increase. Consider that rising interest rates during the periods of 1996 to 2000 helped fuel a 22% increase in the number of annual consumer insolvency filings from 1998 to 2003. Interest rates increases from 2004 to 2006 fueled a 54% jump in the number of annual consumer insolvency filings between 2006 and 2009. With relatively stable interest rates from 2010 through to 2016, annual consumer insolvency rates in Canada have been fairly consistent since 2012. However, with interest rates trending upward since 2017, CAIRP expects to see a corresponding trend for insolvency filings heading into 2019. “For more than a year, the issue of high consumer debt and rising interest rates have been a growing concern but they haven’t been reflected yet in the number of consumer insolvency filings. That’s due to the insolvency time lag that occurs between the point trouble begins and the point at which overextended individuals are forced to begin the debt resolution process”, says Chantal Gingras Chair of CAIRP, the country’s national association of insolvency and restructuring professionals which represents nearly 1,500 trustees and associates across the country. Compounding the concern is that rising interest rates will also cool consumer spending, Canadian GDP and business growth. These conditions could lead to an uptick in the unemployment rate, further accelerating the rate of consumer insolvency filings. “While none of these factors cause bankruptcies on their own, together they are the perfect storm,” says Gingras. Consumer Insolvency Filings and Prime Interest Rate 1996 to 2020Source: Statistics Canada; OECD; OSB Household Debt-to-Income and Inflation Rate 1996 to 2020Source: Statistics Canada; OECD; OSB Supporting CAIRP’s prediction, a recent member survey found that over seventy percent of insolvency professionals believe consumer insolvency filings will rise over the next five years. Almost all (97%) believe they will increase or stay the same over the next year. Ninety-five per cent of CAIRP members surveyed believe Canadians possess unhealthy […]

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