What is Zombie debt and why it could come back to haunt you - Canadanewsmedia
Connect with us

Business

What is Zombie debt and why it could come back to haunt you

Published

on

TORONTO — Canadians with old debts beware: a momentary slip or lack of knowledge of your legal rights could results in past debts rising from the dead and coming back to haunt you.

Zombie debt — old accounts that may have been written off as “uncollectable” and which have passed the statute of limitations — is expected to increase due to Canada’s high level of consumer indebtedness, say insolvency experts.

Canadians have taken advantage of cheap money, with total debt per consumer surging to $71,979 in the second quarter, up from about $57,000 five years earlier, according to credit monitoring service Equifax.

Delinquencies are expected to rise once interest rates eventually climb and put stress on the ability of some borrowers to make payments.

“Debt is increasing faster. So I would be concerned that there is a jump in people who are finding themselves unable to pay their debts,” says Julie Kuzmic, Equifax Canada’s director of consumer advocacy.

That would lead to more accounts going to collection agencies and aging even after the original creditor loses interest in collecting.

“As you get a higher consumer debt level, more and more of those — just by the sheer statistics alone — are going to be older debts,” says Scott Terrio, manager of consumer insolvency at Hoyes, Michalos & Associates, a Toronto-based company specializing in insolvency.

Statute of limitations laws across the country protect consumers from lawsuits if their unsecured debt hasn’t been repaid within the allotted time.

The statute of limitations is two years in Ontario, Alberta, Newfoundland and Labrador, B.C., P.E.I. and Saskatchewan. It’s three years in Quebec, and jumps to six years in the remaining provinces and territories. The federal limitation is six years.

The timelines mean creditors and collections agencies can’t go to court after that period of time to force payment.

But that won’t keep aggressive collection agencies at bay. Debt remains on a person’s credit file for six years and technically doesn’t ever vanish entirely.

Efforts to collect old debt can resurface after it is sold to a new collections agency for cents on the dollar.

Successfully pressuring just a few unwitting debtors to make a payment could be enough to make the exercise profitable for them.

“If I collect from one person, I can probably cover 10 or 20 files because I’ve only paid five cents or something,” Terrio said.

Zombie debt comes in many forms, including legitimate debts that have been forgotten or ignored, scenarios where innocent parties share the same name of a debtor, or cases of identity theft or computer error.

It involves unsecured credit from credit cards, lines of credit, phone bills and the like. It does not apply to secured debt such as mortgages and money owed to government for income tax, property tax, fines, outstanding health care premiums and student loans.

Old debt becomes zombie debt when a debtor acknowledges the money owing after the statute of limitations has lapsed, said David Gowling, senior vice-president with MNP Debt, one of Canada’s largest insolvency practices.

“That can resurrect it and now you’re starting your whole statute of limitations all over again.”

Some cases of zombie debt border on the absurd. Collections agents hounded one person a few years ago for money owed to Eaton’s, even though the department store folded 20 years ago, said Gowling.

Experts advise debtors not to acknowledge debt and if threatened with a lawsuit, tell the caller to send proof of the debt. Chances are they can’t and won’t bother because the statute of limitations has passed for seeking a judgment.

While some actions by debtors could get the clock ticking again on the statute of limitations, it usually requires that a person acknowledge their debt in writing, said Lee Akazaki, partner with Gilbertson Davis LLP, a Toronto-based law firm.

That could include replying to an email agreeing that the debtor owes the money.

Responding with “I don’t owe money because that’s an old debt” is not an acknowledgment.

“It just means you used to owe the money but you don’t anymore,” he said.

Laurie Campbell, CEO of Credit Canada, a non-profit debt consolidation and credit counselling agency, has never come across old debt restarting the statute of limitations countdown clock.

She worries that people afraid of being sued will unnecessarily seek a bankruptcy trustee.

“People should not be running to see a trustee outside of that two-year window because they’re going to pay fees for something that may never come about anyway,” she said in an interview.

Campbell said some people feel a moral obligation to repay debts even though they legally can’t be forced to do so.

She advises against taking a knee-jerk reaction.

“Make sure you get the right advice before you make a decision that could harm you in the long-run.”

This report by The Canadian Press was first published Nov. 10, 2019.

Let’s block ads! (Why?)

Source link

Continue Reading

Business

U of T names Michael Sabia director of the Munk School of Global Affairs & Public Policy

Published

on

By

Michael Sabia, one of the country’s most accomplished leaders in business, investment and public policy, has been named the new director of the University of Toronto’s Munk School of Global Affairs & Public Policy.

The university’s Agenda Committee of Academic Board recently approved the appointment of Sabia, who is currently CEO of pension fund Caisse de dépôt et placement du Québec (CDPQ), which has more than $325 billion of assets invested globally, for a five-year term beginning Feb. 1, 2020.

A U of T alumnus, Sabia will draw on his considerable experience in both the public and private sectors – he once ran Canada’s biggest telecom and helped privatize its largest railway – to help realize the Munk School’s growing ambitions in Canada and on the global stage.

“CDPQ is now a global financial institution with investments around the world. Over the last decade, we have had to navigate through an increasingly complex and turbulent geopolitical scene,” Sabia said.

“With the lessons learned and the global relationships built, I am looking forward to working with the scholars, students and staff at the Munk School to continue building an institution engaged in the world and widely admired around the globe for the quality of its ideas and its practical solutions to the issues facing us all.”

The Munk School, created through a merger last year of the Munk School of Global Affairs and the School of Public Policy & Governance, is a leading hub for interdisciplinary research, teaching and public engagement that houses world-class researchers and more than 50 academic centres, labs and programs.

It’s also home to 20 teaching programs, including Munk One – a first-year foundational program that focuses on global problem-solving.

Sabia will take over the role of director of the Munk School from Professor Randall Hansen, who is currently serving as interim director.

“I’m delighted to welcome Michael Sabia back to the university as the Munk School’s new director,” said President Meric Gertler. “Throughout his career, he has made significant contributions to public policy, to business and to the world of investment. I know he will bring the same kind of engaged thought leadership to the school.

“I would also like to thank Professor Hansen for his excellent leadership and guidance at the school. His work has helped set the stage for future success.”

Sabia, who earned a bachelor’s degree in political economy from U of T before completing two graduate degrees at Yale University, took over the role of chief executive at CDPQ in 2009 and proceeded to build the organization into a global financial institution with more than $325 billion in assets under management.

He also oversaw the implementation of a new investment strategy that made CDPQ an internationally recognized leader among investors working to address climate change, develop urban infrastructure and forge global industry partnerships.

Before that, Sabia held several senior positions at Bell Canada parent BCE Inc., including the role of CEO from 2002 to 2008 when he led a strategic transformation of the telecommunications giant. He also served as chief financial officer at Canadian National Railway, where he worked with then-CEO Paul Tellier to successfully launch CN as a publicly traded corporation through what was then the largest-ever initial public offering in Canadian history.

Sabia spent several years in the public service prior to entering the corporate world. He was director general of tax policy in the federal department of finance, where he was one of the architects of a comprehensive reform of Canada’s tax system, and served as deputy secretary in the Privy Council Office.

More recently, Sabia served on Finance Minister Bill Morneau’s advisory council on economic growth. He is currently co-chair of the G7 Investor Leadership Network on Climate Change, Diversity and Infrastructure Development, as well as co-chair of long-term investment, infrastructure and development for the World Economic Forum.

In addition, Sabia is a trustee of the Foreign Policy Association of New York and a member of the Asia-Pacific Foundation of Canada’s Asia Business Leaders Advisory Council. He was named an Officer of the Order of Canada two years ago, and has received an award from the non-profit Public Policy Forum for his many contributions to public policy in Canada.

President Gertler said Faculty of Arts & Science Dean Melanie Woodin, Vice-President and Provost Cheryl Regehr and he have asked Sabia “to lead a consultative process within the university to determine whether establishing the Munk School as a free-standing faculty would be a constructive step forward.”

“I’m immensely proud of everything that has been accomplished at the Munk School so far,” President Gertler said.

“With the invaluable financial and ongoing commitment of the Munk family and other generous donors, and with the dedication of the school’s first-class faculty and staff, I am confident of our continued success.”

Let’s block ads! (Why?)

Source link

Continue Reading

Business

Metro Vancouver Transit strike to resume bargaining on Wednesday

Published

on

By

If talks on Wednesday aren’t productive, Unifor negotiators say job action could escalate as early as Friday with drivers refusing overtime shifts.

The union representing transit workers in Metro Vancouver is returning to the bargaining table on Wednesday morning, with warnings of strike escalation on Friday if talks don’t progress.

“We will see if the company is serious about achieving a resolution to this dispute and if so, bargaining can be wrapped up in a matter of hours,” said Unifor lead negotiator Gavin McGarrigle during a news conference on Tuesday morning.

According to McGarrigle, the union has heard TransLink CEO Kevin Desmond change his tune in recent days, acknowledging some of the concerns that prompted roughly 5,000 transit workers to begin job action on Nov. 1.

Bargaining teams are scheduled to return to the table on Wednesday morning but if talks aren’t productive, McGarrigle said transit operators have been advised to refuse overtime shifts beginning Friday, which would see massive impacts to bus service across the region.

Talks broke off earlier this month after the company tabled offers that included “loopholes big enough to drive a SeaBus through,” said McGarrigle.

“In short, the company decided to pick this fight,” he said, adding that passengers were the ones who “suffer from a broken model everyday.”

McGarrigle also cited massive pay increases and bonuses granted to TransLink executives, and pointed out the discrepancies between the treatment of bus workers and SkyTrain workers.

Coast Mountain Bus Company handles Lower Mainland bus and SeaBus routes on behalf of TransLink, but talks between the company and Unifor broke off nearly two weeks ago.

Wages, benefits and working conditions are key issues.

A ban on overtime by maintenance workers slowed or cancelled runs on about two dozen bus routes last week, and there have been frequent cancellations on the SeaBus link between Vancouver and the North Shore, including six planned cancellations late this afternoon.

The union had previously warned the overtime ban could be extended to drivers, potentially affecting as much as 15 per cent of bus service across the region; that came to fruition with Tuesday’s announcement.

Premier John Horgan warned last week that lengthy job action, similar to a four-month transit strike in 2001, will not be tolerated.

More to come.

–with files from Canadian Press

Let’s block ads! (Why?)

Source link

Continue Reading

Business

US$1 billion in 67 seconds and other numbers to know

Published

on

By

Singles’ Day in the world’s most populous country has become a mammoth marketing event for China’s e-commerce businesses that have turned it into the world’s biggest online shopping extravaganza.

Singles’ Day, which originated on university campuses in Nanjing, China in the 1990s, became an annual shopping bonanza after Alibaba, China’s biggest e-commerce retailer, made it into an event a decade ago.

This year’s sales surpassed last year’s record, with two of the country’s largest online retailers reporting combined sales of more than US$63 billion, even before final numbers were reported. The eye-popping figures make Black Friday and Cyber Monday in the U.S. seem somewhat anemic and humdrum by comparison. Alibaba posted live updates on its website and on Twitter, but for the very keen, the company also provided a real-time sales counter.

Singles’ Day by the numbers:

1. Singles’ Day takes place on November 11, because the number one and the date, 11/11, looks like a single person.

2. Alibaba said sales by merchants on its platforms totalled 268.44 billion yuan (US$38.38 billion) by midnight local time, handily surpassing last year’s total of US$30.8 billion.

3. Alibaba said the number of delivery orders exceeded 1.042 billion in 18 hours and 31 minutes; surpassing the 2018 total.

4. Alibaba said sales exceeded US$1 billion just 1 minute and 7 seconds after midnight on November 11, and surpassed US$10 billion after 29 minutes and 45 seconds.

5. In the U.S. in 2018, Black Friday brought in US$6.2 billion last year, and US$7.9 billion on Cyber Monday, according to Adobe Analytics.

6. Alibaba rival, JD.com, reported sales of 179.4 billion yuan ($25.6 billion) by mid-afternoon, according to The Associated Press.

7. More than 200,000 brands from over 200 countries and regions were expected to participate in this year’s event; only 27 brands participated in 2009.

8. A once-informal day, a countdown gala leading up to Singles’ Day that included a performance from Taylor Swift was broadcast on nearly 30 online streaming platforms and TV channels.

9. Online shopping makes up 19.5 per cent of Chinese consumer spending, compared with about 11 per cent for American consumers, according to The Associated Press.

10. Alipay said it set a record on Singles’ Day in 2017 for most payment transactions, processing 256,000 payment transactions per second, just 5 minutes into Singles’ Day; 1.48 billion transactions were ultimately processed over the course of 24 hours.

11. China’s State Post Bureau is expected to handle 2.8 billion packages from Nov 11 to 18, according to state-run press agency Xinhua.

Let’s block ads! (Why?)

Source link

Continue Reading

Trending