Tag Archive: bankruptcy
Forgive us our Debts as We Forgive our Debtors – Bankruptcy and the Bible
Originally published at: http://bit.ly/cceEC6
Dalton Camp proclaimed [Ed.: in Canada's defunct Saturday Night Magazine] several years ago that “having lost its value, money may no longer be the root of all evil; credit having taken its place.” This statement demonstrates the paradox of modern day Christianity and debt—should the Christian reaction be one of condemnation or one of compassion. Since many recent respected studies have shown that the average American family is only three weeks away from personal bankruptcy, and since Congress is on the verge of passing legislation that will deny bankruptcy relief to hundreds of thousands of American families, it is time to revisit what the Bible teaches us about debt.
The Bible makes it clear that people are generally expected to pay their debts. Leviticus 25:39. No one in support of or in opposition to the Bankruptcy Reform Bill presently before Congress has advanced any argument against this general proposition. However, this moral and legal obligation to pay just debts must be balanced by such considerations as the need for compassion and the call to cancel debts at periodic intervals. The Biblical basis for such considerations is based on the sabbatical and Jubilee years. The secular basis arises out of the Constitutional of Congress to enact uniform laws allowing businesses and consumers to cancel and to restructure debt obligations. This Biblical support for the legal right to cancel debt is enforced by the even stronger Biblical doctrine that prohibited interest of any amount rather than just usury or excessive interest.
Within the areas of economic justice and stability, the Old Testament is replete with examples of compassionate treatment of the poor, and with preservation of the family unit. These goals were superior to the material concerns of repayment of debt. For instance
The 2010 Superintendent’s Standards for Surplus Income are here!
I have now posted the newly released Superintendent’s Standards for surplus income for 2010. I have also updated the Sample Surplus Income Calculation with its downloadable Excel spreadsheet.
The Superintendent’s standards are derived from the Low Income Cutoffs (LICO) released by Statistics Canada. The Superintendent of Bankruptcy uses the before-tax LICO for urban areas with 500 000 people or more.The 2010 standards are updated by adding to the 2008 LICO the 2009 Consumer Price Index (CPI) of 0.26 percent, plus a 1.7 percent adjustment reflecting the 2010 CPI expectation. Because the actual and expected changes in CPI are currently so low, there has been very little change in this year’s standards.
New Sample Calculation of Surplus Income
The most frequent question asked on this site is, “How much is my surplus income requirement?” (Surplus income is the amount of monthly income that a bankrupt must share with his creditors during the period of bankruptcy.) I have now provided a sample calculation of surplus income, with a downloadable spreadsheet that can be modified for specific cases. See Surplus Income under the Bankruptcy Rules menu item above for more information.
David Cohen on Distressed M&A Today
Here is a great video and article from my friend David Cohen of Gowlings on what’s happening today in Canadian businesses:
http://bit.ly/DavidCohenOnDistressedMandA
David leaves open the question whether we will see a quick or slow recovery from here, but
American women and bankruptcy
“Based on projected figures, more than a million [American] women will find their way to the bankruptcy courts this year – more women than will graduate from college, receive a diagnosis of cancer, or file for divorce.” As if our sexist world didn’t make it difficult enough for women, read how American women (and this is just as true for Canadians) are especially vulnerable in yet another way: http://bit.ly/6iSqan
Ashes to ashes, dust to bust
As a bankruptcy trustee, you never know what you will find when you go into a failed business: http://bit.ly/Cremation
Shakira: I Made It Because of Bankruptcy
In a recent report from CNNWorld, Columbian-born pop singer Shakira declares that her family’s bankruptcy when she was a child motivated her to become the successful, world-famous pop star she is today.
Why tax season 2010 will be COD only
Another 18,000 Ontarians made an insolvency filing in the third quarter of 2009, bringing the total to 51,000 for the year so far.
This means that about 1 in every 200 Ontario adults filed a proposal or made an assignment in bankruptcy in just three-quarters of 2009.
If you want to see the results in graphical form, they can be found here. The raw data was published here.
This flood of insolvencies, running at about 40% above 2008 rates, has come in a period of historically low interest rates and is likely the result of higher unemployment. Unemployment does not look to be declining and interest rates have nowhere to go but up. We have also produced charts showing the close correlation between consumer insolvencies and unemployment.
During Q3 2009, the rate of insolvencies remained steady in Toronto, Ottawa, London, and Kitchener-Waterloo-Barrie. The rates fell in Muskoka-Kawarthas, Hamilton-Niagara, and the Northwest. Rates have continued to rise during Q3 2009 in Windsor-Sarnia, Kingston-Pembroke, Stratford-Bruce, and the Northeast.
If you have an opinion or story about how your practice is coping with the current recession, please leave a comment!
Your firm’s guide to dealing with consumer debt
We have published our version of the booklet, Dealing with Debt – A Consumer’s Guide, originally published by the Office of the Superintendent of Bankrupty, Industry Canada. We have also made available a Word version of the booklet that is suitable for customization by your firm for use with clients who face insolvency. If you need help with customizing the booklet or with producing a .pdf version, please contact us.
Avoiding Bankruptcy
Individuals who are undischarged bankrupts cannot be directors of Ontario corporations. For this and other reasons, many clients wish to avoid a bankruptcy filing.
Several practitioners have contacted me to find methods of avoiding bankruptcy, so today I will provide a simple outline of your clients’ choices.
How Canadian bankruptcy laws recently changed
I’ve noticed that some practitioners hold outdated beliefs about bankrutpcy and insolvency. My first step in trying to change this is to provide details of new rules that came into force September 18, 2009.
First Published Graphs of Regional Ontario Consumer Bankruptcy Statistics
GrossmanCGA published today the first-ever graphs of quarterly regional Ontario consumer bankruptcy and insolvency statistics.
Using data provided by Statistics Canada, these graphs illustrate local trends in consumer bankruptcies, proposals, and total insolvencies. The graphs for each region are available exclusively from GrossmanCGA.
General comments on provincial trends and their import for accountants in public practice were published earlier as Ontario Consumers are in Trouble.
Ontario Consumers Are In Trouble
When I saw the June bankruptcy numbers, I just had to share them with you. They amaze me.
In the first 6 months of 2009, more than 33,000 Ontarians (1 out of every 300 adults!) made filings under Canada’s Bankruptcy and Insolvency Act. That’s a record number both absolutely and as a proportion of the adult population. Each region in the province differs somewhat, but the trend is
