Articles Archives - Fresh Start Now

Meet the Trustee – Kathy Lenart

Kathy Lenart — Thu, 29 May 2025 08:12:38 +0000

I have been helping debtors who are struggling with overwhelming debt for over 30 years. I understand that reaching out to a Trustee is a really difficult step to take and that everyone’s circumstances are different and very personal to them. I thought it might be easier to explore solutions with me if you knew a bit about me.

I am a born and raised Hamiltonian. From early on in high school, numbers have always been “my thing”. I worked numerous jobs in retail (McDonalds, Towers and The Beer Store) and thus learned the importance of customer service and a courteous disposition very early.

I joined Taylor Leibow in 1989 after graduating from the University of Waterloo and started as a junior providing accounting services. Many people in my profession change employers multiple times in order to progress, but Taylor Leibow has a great reputation, acknowledges hard work and the culture is unbeatable.

After obtaining my Chartered Accountant designation in 1991, I went on to obtain my Chartered Insolvency and Restructuring Professional designation and became a Licensed Insolvency Trustee in 1996. This is when I found the ultimate satisfaction in helping people find a path forward to a brighter financial future. Most people I meet find themselves unable to pay their debt due to life circumstances. The fact that I have the training and experience to help them find a financial fresh start is very rewarding.

Maintaining the integrity of my profession is important to me and I currently stand on the Professional Conduct Committee for the Canadian Association of Insolvency and Restructuring Professionals.

Outside of Taylor Leibow, I enjoy the outdoors, staying active, travelling and spending time with my adult children.

Take the first step to a financial fresh start and reach out to me today.

By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)

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What to do when you receive a collection notice from the Canada Revenue Agency (“CRA”)

Kathy Lenart — Tue, 15 Oct 2024 20:36:59 +0000

Amounts owing to the CRA for personal income tax and HST sometimes get pushed aside to concentrate on paying your everyday living expenses. The CRA does charge interest on the amount owed to them, but it is usually lower than the interest rate on credit cards and payday loans. Eventually, the CRA will send a collection notice to demand repayment.

Do not ignore the collection letter. The CRA has higher rights than most creditors and can garnish your wages, freeze your bank accounts and put a lien against your assets without serving you with a Statement of Claim. If you receive a collection letter, you should:

Communicate with the CRA so they know that you take this debt seriously. Call the CRA representative assigned to your account, who is referred to in your letter. If you are not able to pay the debt in full, ask them to allow you a couple of weeks to review your finances and come up with a payment plan.
Make a list of all income that you receive in a month and all of your living expenses. Analyze if you can cut back on any discretionary expenses (dining out, streaming services, entertainment) to increase the amount available to pay off your CRA debt. Divide your CRA debt by the amount that you can afford to pay every month to see how long it will take you to pay off the debt. Contact the CRA to see if they would agree to your monthly payment plan. The CRA will likely be looking to have their debt paid in full in 12-18 months.
The CRA may grant relief from penalty or interest if extraordinary circumstances or financial hardship prevent you from paying your taxes. More details are available at Taxpayer relief provisions—Canada.ca.
If the CRA does not agree to a payment plan, do you have any assets that you could liquidate to pay off the debt? Funds in a TFSA are likely earning less than the interest you are being charged by the CRA, so it may make sense to collapse it to pay the debt and then rebuild the TFSA later.

If the debt to the CRA is too overwhelming for you to negotiate a payment plan on your own, seek professional advice. Amounts owing for income tax and HST can be discharged in a bankruptcy or proposal. Contact Taylor Leibow Inc., Licensed Insolvency Trustees, to review your financial situation in detail and discuss solutions.

By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)

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Can I retain my bank account in a bankruptcy or consumer proposal?

Kathy Lenart — Fri, 19 Jan 2024 22:01:48 +0000

The number of people who have had the same bank account since they were children is surprising. They feel a sense of dedication to their financial institution and have a relationship with their local branch.

I am often asked if they can retain their bank account if they file a bankruptcy or proposal. The answer is – it depends.

If you owe

If you owe your bank any money – overdraft of your bank account, credit card or a loan – then you will have to open a new bank account at a new financial institution.

Your bank has the right to set-off (take) any funds in your bank account against the debt that is owed to them upon you filing an insolvency. Technically, they can’t take any funds after the date of insolvency, but it is always cleaner to change banks to ensure you are not scrambling to have your funds released.

If your creditors have access to your bank account via pre-authorized payments (“PAPs”) or postdated cheques (yes, some people still write cheques), then you should close your bank account upon filing an insolvency. You want to ensure no further amounts are charged to your account that could possibly result in service charges and non-sufficient fund charges for which you would be responsible.

If you have a joint account with another person and owe your financial institution money, you will definitely want to close that account to ensure the co-owner is not left responsible for charges on the account.

If you don’t owe

If you have no debt owing to your financial institution and none of your unsecured creditors have access to your bank account, you can keep your bank account.

This is always easiest as there is no need to change your direct deposits and ongoing PAPs for utilities, insurance, etc.

Changing your bank accounts and potentially having your cheques held for five days is a hassle, but retaining control of your funds is well worth the trouble. Reach out to a Licensed Insolvency Trustee for a free initial assessment to fully explain all options available to deal with overwhelming debt.

By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)

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Be Cautious of Scams

Kathy Lenart — Tue, 24 Aug 2021 17:04:06 +0000

Unfortunately, it seems there are more and more predators attempting to take advantage of honest people. Just last week, a colleague at my office received an email that appeared to come from me requesting they do me a big favour and purchase gift cards as a thank you for our staff. Luckily my colleague was alert and recognized the email address was suspicious.

Some common scams I have heard of recently are:

Canada Revenue Agency (CRA) scams – these calls can be convincing as most individuals have an inherent fear of receiving a call from CRA. The “representative” claims you owe money to CRA and must arrange payment, or you will be arrested. The warning sign of this scam is the caller wanting to be paid in iTunes cards or Bitcoin.
Lottery scams – caller claims you have won a lottery but requests you provide banking information for the deposit. You should never provide banking information over the telephone to an unknown party.
Prize winner call – this scam targets seniors and the caller claims to represent “Readers Digest” or “Publishers Clearing House” and requests payment of a small fee to cover taxes, legal fees and delivery costs. The warning sign here is that lottery and prize winnings are not taxable in Canada.
Grandchild scam – the caller claims to be a grandchild who is in trouble and needs the grandparent to send them money. Most grandparents would panic and want to immediately help, but calmly hang up and call your grandchild back.
CERB claims – somehow, claims were made for CERB payments by third parties who directly received the funds. If you received a T4A for CERB funds that you did not receive, you should contact Canada Revenue Agency immediately.

I also recommend against answering those fun Facebook posts about your first pet, street name, etc. Predators could use that information to try and guess your passwords.

The Canadian Anti-Fraud Centre reported 46,077 reports of fraud as of July 2021 and $130 million lost to fraud. Their website provides more information on recent scams and frauds https://www.antifraudcentre-centreantifraude.ca/index-eng.htm.

The takeaway is to always be alert, be skeptical and most of the time just hang up without providing any details or pressing any buttons on your telephone.

By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Member and Secretary of the Ontario Association of Insolvency
and Restructuring Professionals (OAIRP)
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)

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Debt Help in St. Catharines

Kathy Lenart — Fri, 09 Apr 2021 18:24:22 +0000

I just read an article in the Financial Post, that stated Canadians would rather incur more debt to fund their monthly cash flow shortfall than to seek the advice of a professional. As a Licensed Insolvency Trustee (“LIT”), and thus a professional in debt solutions, I recommend anyone overwhelmed by their debt to consult with a LIT before incurring more debt. If your credit rating is poor, new debt likely comes with a high interest rate that will ultimately worsen your future cash flow.

The initial assessment for a detailed analysis of your financial situation and possible solutions is free of charge with Taylor Leibow Inc. and most LITs. In a non-judgmental, compassionate manner, we will review your assets, debts, monthly income and expenses and explore the following debt relief solutions:

Budget to pay your debt in full. This solution may require you to reduce some discretionary expenses (like entertainment) to enable you to afford monthly payments to pay off your debt. The trustee will advise of two debt payment strategies: pay off the lowest debt first to reduce the number of creditors or pay down the highest interest-bearing debt to minimize total interest costs.
Debt Consolidation Loan – borrow an amount to pay all of your debt in full and be left with one monthly payment at a lower interest rate (loans typically bear a lower interest rate than credit cards).
Debt management program through a not-for-profit credit counselling agency – agency negotiates with your creditors to accept payment in full over a four-year time period (with interest) and you make one monthly payment to the agency who in turn distributes amongst your creditors.
Consumer proposal – an insolvent person can offer a compromise to their creditors payable over a maximum of five years. The proposal includes the trustee’s fees to administer the proposal, allows you to keep your assets and stops all interest and collection proceedings by creditors.
Bankruptcy – a bankruptcy stops creditors from pursuing you for payment of your debt and will stop most garnishments of income. The trustee realizes on any assets that have equity above exemptions and you may have to make surplus income payments depending on your family income and household size.

If you had a health concern, you would consult with a doctor. If you have concerns about your debt, contact Taylor Leibow Inc., Licensed Insolvency Trustee for a free, initial consultation in St Catharines.

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Her Majesty the Queen and Callidus Capital Corporation

Kathy Lenart — Mon, 16 Oct 2017 04:00:21 +0000

We have highlighted some of the more relevant factors considered in the case.

Essentially the case outlines the Court’s perspective on whether the bankruptcy of a tax debtor and subsection 222(1.1) of the Excise Tax Act R.S.C. 1986 c.E15, as amended (the “ETA”) renders the deemed trust under S.222 of the ETA ineffective as against a secured creditor who received, prior to a bankruptcy, proceeds from the assets of the tax debtor that were deemed to be held in trust for the Crown.

The answer according to the court in a 2 to 1 ruling is that funds are deemed to be held in trust for the Crown and a secured creditor has exposure to the Crown should an event of bankruptcy take place where funds have been paid to the secured creditor in priority to the Crown. In the Crown v. Callidus, all proceeds of the Cheese Factory’s property received by Callidus (pre bankruptcy), up to the amount secured by the deemed trust, should have been paid to the Receiver General of Canada as a result of the deemed trust mechanism under Section 222 of the ETA . The bankruptcy did not absolve this obligation to pay nor relegate the deemed trust to an unsecured claim. Callidus was ordered to pay the Receiver General $177,299.70 plus interest in unremitted GST/HST by operation of the deemed trust mechanism.

This case is currently under appeal, but your clients should be vigilant and consider the potential HST exposure when paying down secured lenders or any creditor in priority to HST which may be outstanding at any given time. For a secured lender who is being paid down under its security, they should caution whether there is any Crown exposure at the time of payment.

The case focuses on a secured lender but one can only assume that should this case be upheld then the natural assumption is that it could be expanded to consider all creditors who may get paid in priority to funds held in trust for CRA where a bankruptcy ensues.

If you have any questions or with to discuss further, please do not hesitate to contact us.

By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Member and Secretary of the Ontario Association of Insolvency and Restructuring Professionals (OAIRP)
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)

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Misconceptions About Personal Insolvency

Kathy Lenart — Wed, 28 Nov 2012 00:00:04 +0000

Your creditors are calling from the early hours of the morning until late evening. They are pressing you to beg and borrow funds to pay their debt and can be very threatening.

Unfortunately, there is no sympathy to your personal situation and the tone of these calls and the statements made can create fear, conflict, stress and anger. The only objective of a collection agent is to get you to pay, now. Whether you eat, put gas in your car or pay your heating bill does not matter, they want to satisfy their need and to them you are merely another file…

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Financial Consumer Agency of Canada – Consumer Alert – Debt Reduction Companies: Beware of “Too Good to be True” Offers

Kathy Lenart — Fri, 12 Oct 2012 00:00:57 +0000

The Financial Consumer Agency of Canada (FCAC) ensures federally regulated financial entities comply with consumer protection measures, promotes financial education and raises consumers’ awareness of their rights and responsibilities…

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Sign of the Times

Kathy Lenart — Fri, 12 Jun 2009 00:00:29 +0000

During uncertain economic times it can be challenging for mortgage professionals, especially those new to the field, to find avenues for financial growth.

Housing markets are depressed; consumers are worried about job stability; financial markets are sputtering and consumers are overextended. On top of all that, banks have tightened up their lending criteria, forcing many consumers to take uncomfortable steps to get themselves out of debt…

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Be Prepared for the NIQP’s Challenges – Rebuilding Success, Spring 2006 issue

Kathy Lenart — Wed, 12 Apr 2006 00:00:35 +0000

If you are planning to take the National Insolvency Qualification Program, you had better come prepared.

Composed of five courses and three separate exams, NIQP was created in 1998 as a streamlining effort to certify bankruptcy trustee candidates. The program, as explained by Superintendent of Bankruptcy Marc Mayrand in a 1997 release from Industry Canada, was created to, “ensure a consistent national approach to training that will encourage and promote professionalism and increase the level of knowledge expertise of applicants for a trustee licence.”…

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