The Office of the Superintendent of Bankruptcy reported a 58.3% increase in Canadian business insolvency filings in the 4th quarter of 2022 (October to December). From the business owners that I have recently met with, the causes of their financial difficulties stem from:
- Rising interest rates resulting in significantly higher monthly payments on bank loans and operating lines of credit
- Delays in obtaining product during the pandemic due to supply and shipping issues
- Increased costs of inventory, shipping and operating expenses
- Large amounts owing for HST, unremitted source deductions and personal income tax and Canada Revenue Agency is starting to press for payment
- Concern about obligation to repay government CEBA loan of $40,000 or $60,000 by December 31st, 2023, to be eligible for grant
- Lack of employees to operate efficiently; and
- Consumers are cutting back and being more cost-conscious
A Licensed Insolvency Trustee can assist with two solutions to deal with an insolvent business:
- assignment in bankruptcy
- a proposal which is an offer to your creditors to compromise your debt
Many factors have to be considered in evaluating the best solution for you. At a free initial appointment with Taylor Leibow Inc., we will review your business’s financial situation in detail and explore if a bankruptcy or proposal can allow you to continue to operate your business for a profitable future. Reach out to us today.
By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)
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