Boale, Wood and Company

Licensed Insolvency Trustee

Articles

Debt Solutions Portal

· ·

Information Rich On-line Resource to Help Canadians

A couple working together on their laptop at the kitchen table.

The Office of the Superintendent of Bankruptcy (OSB) has created a series of articles and videos to help consumers’s identify reliable sources of debt assistance.

OSB and the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) are working together to help Canadians find advice and solutions they can trust to help with their debt.

You can access the portal for free here.

Here are some direct links to articles:

Video and audio:

Contact us to discuss your situation over the phone, a video chat, or in-person. You will talk directly to a Licensed Insolvency Trustee.  

Call Us. It’s Not Too Late!
(604) 605-3335

Boale, Wood & Company Ltd. – Licensed Insolvency Trustee

Boale, Wood & Company Ltd. is a Licensed Insolvency Trustee that has been around since 2004. We are local experienced insolvency practitioners who have a hands-on approach to your situation.  We understand the personal impacts of major financial stress. We offer free consultations to review your financial situation and practical debt resolution options. 

Student Loans – Single Date Approach

· ·

May 2023

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

Flag of the Province of British Columbia

A recent decision by the BC Court of Appeal 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 (2023 BCCA 181) the Court declined to change the single date approach to a multiple date approach when considering if Student Loans are discharged in either 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

Currently, the Bankruptcy and Insolvency Act (“BIA”) legislation provides that if a bankrupt ceases to be a student within seven years of the filing of a bankruptcy, the debt will not be discharged at the end of the bankruptcy.  This section also applies to individuals who have filed proposals.

If it has been greater than seven years from the date of a bankruptcy or a proposal, then the debt would be dischargeable.

We understand that Student Loans Regulations considers the End of Study date to be 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.

A student loan may be discharged if the student makes a “hardship” application to have the student loan discharged in a bankruptcy or proposal.  The criteria is that more than five years has elapsed post-study but less than seven years has elapsed from the filing of the bankruptcy or proposal (more on that later in a subsequent paper).

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

The Court of Appeal rejected the multiple date method of determining when an individual ceased to be a student and confirmed that Mallory was of sound reasoning.  It also stated that decisions in other jurisdictions decided subsequent to Mallory that adopted the multiple date method didn’t identify any error in the Mallory analysis and did not find them persuasive despite having a different outcome.  It stated that decisions in other jurisdictions did not adequately consider the structure and the language of S178(1)(g) nor the differences between the English and French versions of the BIA.

So the question is, “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 in subsequent studies”. 

For example, if you file a bankruptcy or proposal and have student loans that are more than seven years old, but in the meantime, have gone back to school and self-funded those studies, within seven years of the insolvency filing, when have you ceased to be a student.  Is it from the time you ceased to be a student on the first loan, or when you went back to school on the self-funded studies. 

In BC the Court of Appeal confirmed that indeed the clock does reset as decided in Mallory and confirmed in Piekut.  The end result is that the student loan survived the proposal and was not discharged under the BIA.

There has been no word on whether leave to the Supreme Court of Canada will be sought.

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.  It’s not too late!
(604) 605-3335
www.boalewood.ca

Beware of the Online Calculator

· ·

Artist rendering of a woman on a computer in a sparse yellow room

There are a lot of online calculators that will calculate whether you qualify for a consolidation loan, what your credit card payment will be and whether you qualify for a consumer proposal to name a few.

This article focuses on the consumer proposal calculator. These calculators are generally run by unlicensed professionals who actually cannot help you file a consumer proposal.  They claim to offer debt relief but what the reality is, they simply charge a fee (which most people who need debt relief cannot afford) and then refer the file to a Licensed Insolvency Trustee (“LIT”) whom the consumer has to pay again.
 
These calculators are misleading and make claims about how much debt can be reduced and what the monthly payment would be.  They are designed to fool you into thinking you qualify to file a consumer proposal. 
 
These calculations are generally just wrong and do not reflect the many different factors that are needed to determine whether a consumer proposal is viable and capable of being accepted by your creditors. No two situations are alike.
 
To be frank, I have never seen a consumer proposal calculator state that you weren’t qualified.

A consumer who wishes to file a consumer proposal or a bankruptcy, must use the services of a Licensed Insolvency Trustee. There are no other debt professionals who can assist them.   So the people who advertise these calculators have no ability to do anything. 

Secondly, they must undergo a full financial assessment by the LIT and disclose their assets, liabilities, and their income. This includes understanding the composition of the debt, whether the debt is secured or unsecured and what types of debt are owed (credit card debt, student loan debt, business debt, taxes, etc).

The takeaway here is that if you are in debt you need to talk to a Licensed Insolvency Trustee.  Don’t rely on some mathematical gimmick that’s run by unlicensed professionals who will take your money but cannot help you.  The general information provided by these websites that make outlandish claims about debt reduction and monthly payments are simply delaying the process of you knowing what the true options are.  By calling a LIT directly, you will save time and money and have the correct information available to make an informed decision.

Boale, Wood & Company Ltd. – Licensed Insolvency Trustee

Boale, Wood & Company Ltd. is a Licensed Insolvency Trustee that has been around since 2004. We are local experienced insolvency practitioners who have a hands-on approach to your situation.  We understand the personal impacts of major financial stress. We offer free consultations to review your financial situation and practical debt resolution options. 

Contact us to discuss your situation over the phone, a video chat, or in-person. You will talk directly to a Licensed Insolvency Trustee.  

CRA Ramps up Collections on CERB

· ·

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 – Student Loans, Single Date

· ·

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 

Please see this message from David Wood, founder of Boale,Wood and Company. Read More