Sears Canada Bankruptcy – The Good, The Bad, and The Ugly

In October 2017, Canadians learned they were losing a retail titan as the Sears Canada bankruptcy was announced and along with it the plan to lay off 12,000 employees across the country.

The company has been losing money for some time and has been closing stores for the past several years, but the announcement of total liquidation came as a shock to many. Seventy-four full-line stores, 49 Hometown dealer stores, and eight Sears Home Stores are set to close by the end of 2017.

Since the Sears Canada bankruptcy announcement, analysts have looked into what caused it. While there are many factors, competition, lack of forward movement, and poor fiscal management are cited as the main reasons.

Whatever the cause, the implications are clear: 12,000 people across Canada are laid off work and the country is losing a retail icon.

Additional implications are:

  • Mall retailers will have to find replacement stores to fill the empty spaces Sears occupied.
  • Other apparel stores, such as Winners, Hudson’s Bay, Marshall’s, and Reitman’s, could pick up more business. Home improvement stores, such as Home Depot, Home Hardware, and Lowe’s Canada could see an uptick in sales too.

If you are facing being laid off work, in the retail sector or otherwise, there are several things you can do to prepare.

  1. Make sure your finances are in order.

Do you have a monthly budget? How much debt do you owe? If you’re faced with a job loss, it’s important that you have a plan to keep paying your debts. A poor credit score could affect your job search and digging yourself deeper into unsustainable debt will only hurt you in the long run.

  1. Assess your options.

Where else might be hiring in your field? Are there other streams of income you can access, such as self-employment? What types of severances or government benefits are you entitled to and for how long? Knowing this information can help you plan ahead.

  1. Begin your job search now.

If you’re worried about your job security, don’t delay in starting your search or setting up another form of income. Update your resumé and think about places you could apply. If you’re in the retail industry, for example, are other stores hiring in your area? If not, how could your skills be transferrable to another industry?

  1. Have a plan to deal with debt.

If you owe debt, it’s best to have a plan before you’re laid off work. A Licensed Insolvency Trustee can provide you options to manage your debt so you don’t dig yourself deeper into the hole.

At Spergel, we can help you you understand your options for debt relief and better financial stability if you are facing being laid off work.

Call us today for a free consultation: 310-4321.


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How to Have a Magical Holiday on a Budget

The holidays are fast approaching, and for many that means a struggle to pull off the most magical season without breaking the bank. We’re all about celebrating, but we’re also aware that doing so on a budget is crucial to avoid the worry and stress afterwards. This week, we’ve got some great tips for the perfect holiday on a budget!

  1. The most important thing to do is start with a budget. Even if it is the only thing you do to help curb overspending during the holidays, a realistic budget – one that you stick to – can help you save a ton! First, figure out what you can actually afford to spend. Then, make a list, considering everything you will need to purchase during the holiday season, and give yourself a reasonable amount to spend on each item. Once that budget is set, stick to it like glue!
  2. Talk with family and friends about the budget for exchanging gifts. Perhaps this year you choose to only do presents for the kids, or perhaps instead of buying for all the adults, you just buy one gift for one person and do a fun game. Just make sure to set limits on these too.
  3. Use your talents in the kitchen, woodshop or craft room to make gifts rather than buying them. These gifts are often far more personal anyway. Just make sure that the things you choose to make don’t actually cost more than what you would be purchasing.
  4. Skip the expensive decorations – they can be really costly – and make your own. Head to Pinterest for a wealth of inexpensive ideas for all kinds of decorations. This is a great way to get the kids involved too as there are many that little hands can handle.
  5. If you’re hosting a dinner, make it a potluck. Instead of trying to cover everything – the appetizers, the main course, the desserts – get everyone to bring their favourite holiday dish. This not only saves money, it can also help eliminate the stress and headache that comes with all that preparation.

The holidays are supposed to be filled with joy and laughter, not sleepless nights worrying about how much everything is going to cost or how you’re going to be able to cover it all. Celebrating the holiday on a budget is much easier than you might think! This year, instead of going all out only to regret such a decision when those January bills start to arrive, make a few careful decisions at the beginning and your bank account will thank you.

Will even careful spending still leave you strapped and concerned about your debt? At Spergel, we can help you get ready for the New Year and a fresh financial start.

Call us today, toll free, for a free consultation: 310-4321.


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Credit Cards for Bad Credit History Applicants… Many Strings Attached

When you have good credit, applying for financing or various credit products probably isn’t accompanied by much concern or stress; heading to the bank or submitting an application for a credit card usually yields favourable results. However, if you’re on the other side of the fence, and your credit history is less than stellar, you may be considering financing through credit cards for bad credit.

Sure, the idea of obtaining a credit card when you have bad credit and have fewer options may sound great, but things are not always what they seem. While many may be swayed by the lure of credit cards for bad credit, it is important to recognize that there are usually many strings attached, strings that you may quickly become tangled in.

Higher interest. Credit cards for bad credit often come with much higher interest rates than those not targeted to bad credit. While most credit cards charge high interest, those companies offering credit cards for bad credit are banking on (literally) your credit history and charging more because you are high risk. This means that, if you’re struggling financially, unless you can actually pay in full each month, you’re actually paying far more than you could be paying.

Fees. Most credit cards come with monthly fees, but just beware that those designed for bad credit may have higher fees, or fees that are determined by credit score.

A smart alternative is a secured credit card. A secured credit card is one that you ‘load’ with money (your money) to use for whatever you want. This money is considered your credit limit on the card. Each month, you make regular payments on the card just as you would with a regular credit card. You also get the added benefit of rebuilding your credit when you display good credit behaviour (staying well under the limit, paying more than the monthly minimum each month, etc.).

Whatever you end up choosing for a card, here are some tips that should help you improve your credit as you go:

  • Pay on time, every month. This is a no-brainer, but is really important, especially when you’re trying to rebuild credit.
  • Keep balances low. When you keep your balance high, this can negatively impact your credit score. A good rule of thumb is around 50% of your total credit limit. Try to stick within that.
  • Pay more than the minimum. Since the minimum payment is primarily interest, try to pay more than that amount each month to get the balance down.
  • Don’t apply for more. Applying left, right and centre for new cards makes you look like a credit-seeker, someone who is not living within their means. This will also negatively impact your score, so avoid it.

If you’re concerned about your ability to acquire new credit, even by way of credit cards for bad credit, you may want to think about how you can get your debt under control and regain financially stability. At Spergel, our goal is to get you there.

Call us today, toll free, for a free consultation: 310-4321.


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How to Get Out of Debt? The Question of the Hour

Over the last 2 years, Canadian mortgage rules have changed significantly, making refinancing harder, and with interest rates going up this could shift supply and demand, thereby impacting housing values. We often have clients come to us wondering how to get out of debt amidst these changes. This week we’re covering two of the most popular options: a consumer proposal and bankruptcy.

When you’re overwhelmed by your financial situation and concerned about how to get out of debt when it seems to have taken over your life, know that you’re not alone. Thousands of Canadians struggle with such concerns on a daily basis. Both a consumer proposal and bankruptcy offer significant relief from debt that has become unmanageable, giving you a chance to start fresh.

A consumer proposal is a legally binding agreement between you and your creditors. It is an arrangement that’s negotiated with your creditors by a Licensed Insolvency Trustee wherein an amount to be repaid is proposed, and once accepted, usually reduces your debt and results in one monthly payment.

The benefits of a consumer proposal also include protection from collection action (and a stop to all currently being levied against you), no interest, and a repayment term of 4-5 years, not to mention a fresh start financially.

A bankruptcy is similar in that it is a legal process wherein you repay a portion of your debts to your creditors.  A Licensed Insolvency Trustee administers your bankruptcy, distributing funds to your creditors as repayment. When you file bankruptcy, collection action stops, as does interest.

During the term of your bankruptcy, which can last for as few as nine months, you will have certain obligations to fulfill including providing a monthly income statement to your Trustee and attending credit counselling sessions. Once your bankruptcy is complete, you will be discharged and can start on fresh financial footing.

Know that there is no ultimate silver bullet, no magical formula. Even in bankruptcy you have to pay something, but the end results will leave you with significant relief. Both of these options are very valuable, and discussing your situation with a Trustee is the best way to find out which one is best suited to your situation.

If you’re wondering how to get out of debt, we’re here to help. With over 25 years of experience, Spergel can help you find the right solution for your situation.

Call us today, toll free, for a free consultation: 310-4321.


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Canadian Interest Rates Are on the Rise – Are You Financially Ready?

Back in July, the Bank of Canada raised the Canadian interest rate for the first time in 10 years. Then, in September, it happened again. This has been cause for concern amongst some.  Those fearing a further increase (as many economists predict) could be troublesome for an economy still on the up-and-up.

According to the Financial Post, “Officials within Prime Minister Justin Trudeau’s government are concerned the Bank of Canada is moving too quickly to raise interest rates, fearing higher borrowing costs could inadvertently trigger a downturn…The officials, speaking anonymously because they’re not authorized to comment, are concerned a series of rate hikes would lead consumers to claw back spending, stunting a recovery from a two-year oil shock.”

Read more on this here:

With a further rate increase, borrowing rates would jump yet again, causing many Canadians financial stress. While fixed-rate mortgages aren’t susceptible until renewal, those with variable rate mortgages are probably already feeling the heat, as are those with home equity lines of credit and other personal LOCs.

For those with a significant amount of debt, the extra costs of borrowing could make it harder to meet financial obligations, leading to missed payments or the further accumulation of costly debt. So, what’s the solution?

Getting those debts straightened out before Canadian interest rates increase again is a good strategy. One such method is a consumer proposal. A consumer proposal can help you settle your debts with creditors, often resulting in lower overall total payments and one, easy-to-manage monthly payment with no interest. You also know exactly when you will be debt free – so no more worrying about the future!

At Spergel, we have the tools and expertise to help you get ready should Canadian interest rates rise again. Don’t continue to struggle – we offer real relief.

Call us today, toll free, for a free consultation: 310-4321.


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Remembrance Day

Today, and Every Day, We Remember

This weekend we take a moment to remember all of those brave Canadians who gave, and continue to give, all that they have to ensure that we are able to enjoy the freedoms that we hold dear. Those men and women who’ve fought over the years, giving their lives for an honourable and just cause.

Thank you for your courage, your dedication, your selflessness and your bravery.

We remember, today, and always.


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Spergel Provides Debt Solutions Expertise to The Globe and Mail

The trustees at Spergel have been providing debt solutions to thousands of individuals in Canada for the past 28 years, and regularly share our wealth of experience.

Spergel trustee Gillian Goldblatt was quoted in an article in The Globe and Mail this week offering her perspective on Canadians’ anxiety over increasing interest rates. The article is called “Already pinched, many Canadians anxious about higher rates” and was released on October 23.

The Bank of Canada has increased interest rates twice since July 2017, taking rates from 0.5% to 1%. More rate announcements are expected before the end of the year.

Goldblatt, a licensed insolvency trustee with msi Spergel inc. in Toronto, was quoted about how rate increases affect her clients who are looking for debt solutions.

“You can live in a bubble for a while until some event snaps you out of it,” Goldblatt told The Globe on Monday. “That’s when we have people come to see us.”

Nearly half of Canadians are worried about repaying their debts, The Globe reports, while four in 10 Canadians fear further interest rate increases will leave them in financial trouble. In September, Canadian household’s credit-market-debt-to-disposable-income ratio hit a new record of 167.8%.

Goldblatt told The Globe she’s seen an influx of millennials approach her firm, Spergel.

Thanks to the interest rate increases, millennials are realizing their spending habits don’t align with financial sacrifices needed to start families and break into the housing market, Goldblatt said. Easy credit and tap-and-go technology make spending too easy and leads to living beyond one’s means.

According to the article, “Among the various structural struggles faced by millennials, ‘a lot of it comes down to a lack of education,’ she [Goldblatt] said, suggesting that public schools hardly include enough material on financial literacy in curriculums. The effects of that, she continued, are now revealing themselves in reality.”

The Globe reports 40% of millennials say they already feel the effects of increasing interest rates. More than half say they’re worried about being able to repay their debts and 38% say rising rates could send them towards bankruptcy.

“The bankruptcy figure for millennials is 10 percentage points more than the average of all age cohorts,” The Globe writes.

Studies across Canada are reporting the same figures — Canadians are worried about their debt levels. Breaking into the housing market could be harder than ever before and Canadians aren’t certain they’ll be able to cover living and family expenses without taking on more debt.

To read The Globe and Mail full article, visit

If you’re finding yourself in a precarious debt position, or want to make sure you’re set up for success, Spergel can help. Licensed Insolvency Trustees like Goldblatt can find you the debt solutions you need.

Contact us today at 310-4321 or visit

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Debt Help Focus: Canadian Seniors Increase Non-Mortgage Debt

The retirement years are supposed to be the golden years, the years you can spend your days doing exactly what you want. They are not meant to be the years when you worry most about money. However, as our economy transitions, seniors are facing many of the same financial challenges as those in non-retirement years. The term ‘golden’ isn’t exactly what most might use to describe their situations.

In 2015, Equifax conducted a study which found that non-mortgage debt held by Canadians aged 65 and over averaged $15,244. That was below the Canadian average of $22,113, but those over 65 posted the highest percentage growth – meaning seniors are amassing debt at an alarming rate compared to younger Canadians

Why is this the case? There are numerous factors: inflation, the desire to stay in their homes after retirement, helping their children, rising healthcare costs, assisted living costs, etc. Furthermore, many Canadian seniors are not entering retirement debt free, and thus the costs of that debt are following them into retirement.

For those on fixed incomes, this can quickly become a serious issue. Many Canadian seniors struggle to balance debt repayment with rising living and medical expenses.

Not only are these financial stressors hard on your wallet, they may also be detrimental to your health. According to a recent CBC News article, financial stress, specifically stress created from debt, can have a significant effect on the well-being of seniors struggling with health issues: “We know that financial stress … can exacerbate problems with dementia,’ said Lynda Colley, chair of the Dementia Society of Ottawa and Renfrew County. ‘Financial pressures put on seniors battling debt and ongoing health issues can be immense.’”

No matter your age, debt can be a troublesome monkey on your back. However, as you age and your finances become strained, debt may feel more stressful for you than the average person.

Don’t wait until things get worse.  If you’re retired, but concerned about your finances, there is nothing wrong with seeking help to ease the burden. If you’re nearing retirement, now is the time to get the debt help that will allow you to enjoy your retirement stress-free.

At Spergel, we have the solutions that will help you eliminate some of the financial worry that is keeping you up at night.

Call us today, toll free, at 310-4321.


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How to Rebuild Credit After Filing a Consumer Proposal

As Licensed Insolvency Trustees, we often get asked how to rebuild credit after completing a consumer proposal or bankruptcy. When debt becomes overwhelming, and you’ve chosen to do something about it, namely filing a consumer proposal or bankruptcy, you’re already on the road to financial freedom. That being said, debt and the various debt solutions can have an impact on your credit score. While it can take time to rebuild, it may not be as difficult as you think. Here are some things that you can do to help get things back to a place where borrowing isn’t a major hassle.

  • Get a secured credit card. With a secured credit card, you (the cardholder) make a deposit to the credit institution and this becomes your limit on the card. Each month you are required to make regular payments to the card (to pay off your ‘balance’), but if you default the money comes from that initial deposit. Keeping up the regular payments helps to rebuild credit as it shows positive credit activity.
  • Pay any and all of your bills on time. This includes things like hydro and gas, insurance, even your phone bill. These all report to your credit report and having good credit history will boost your score.
  • If you’re in a consumer proposal, try to pay it off as quickly as possible.
  • Save some money. When you’re ready to finance a large purchase, a vehicle for example, a large down payment usually makes it possible to do so at a decent interest rate.
  • Make sure that, once you have been discharged, this has been reported to the credit reporting agencies. You want your credit report to reflect that you have completed your proposal or bankruptcy obligations. Making sure that there are no errors on your report is also a good idea. You can do this by requesting your credit report from both Equifax and Transunion. If you find any errors, document these and send, by registered mail, a letter and any supporting evidence to support.

Other tips on how to rebuild credit once you are discharged from bankruptcy or completed your consumer proposal include:

  • Keep balances low on all credit products. When you pay off a credit card, or pay it down significantly, keep it that way. However, if you can’t pay off a big chunk, at least try to keep the balance low.
  • Avoid applying for too much credit. When you apply for any type of credit product, this gets reported to your credit report, and when you continually apply for credit this negatively impacts your overall credit.
  • Pay more than the minimum payments as often as possible.

At Spergel, your financial freedom is our ultimate goal. We are here to help you find a solution to your debt problems, including how to rebuild credit both during and after filing a consumer proposal or bankruptcy.

For more information, call us today to schedule a free consultation: 310-4321.







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CRA Garnishments 101 – How Much Can CRA Garnish?

When you owe money, no matter how much, to any creditor, one of the most problematic forms of collection action you face is a wage garnishment. When the debt is to the Canada Revenue Agency (CRA), things become even more problematic. If you’re concerned that a CRA garnishment may be headed your way due to unpaid taxes, you may be curious about the process or wondering how much can CRA garnish.

Firstly, the process by which CRA garnishes wages is different from the process followed by other creditors. Other creditors must first obtain a judgement against you in court, thereby making you aware of the garnishment. They will also formally notify you of a garnishment. Once this has been done, your employer is made aware of the garnishment and must then forward a portion of your wages to the creditor to pay off the debt.

With CRA garnishments, no court order is required. Instead, a notice is sent directly to your employer notifying them of the garnishment. They are required, by law, to comply. If they do not, they could face legal action. Thus, many are not even aware that CRA has implemented a garnishment until receiving a paycheque that is far smaller than expected.

How much can CRA garnish? This is another important consideration when you’re dealing with CRA debt.

If you are an employee on payroll with taxes deducted at the source, CRA can garnish up to 50% of your wages. If you are a sub-contractor, or receive a different form of income, such as a pension, CRA can garnish up to 100%.

As you can see, CRA wage garnishments are serious business, and can wreak havoc on your finances in a short period of time.

While a CRA wage garnishment should not come as a surprise – you will have been notified of the tax debt well in advance of the garnishment – if you can’t pay the debt in full, you may have limited options. Two of the most effective are a consumer proposal or bankruptcy. Both offer full protection from a CRA wage garnishment and can help you manage your other debts as well.

A CRA garnishment can be devastating financially. Don’t wait, get your tax debts resolved as soon as possible to stop a garnishment in its tracks. At Spergel, we have over 25 years of experience dealing with CRA debts.

Call us today, toll free, for a free consultation: 310-4321.


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