Consumer Insolvency Revisited with Scott Terrio | E113

Financial Planning For Canadian Business Owners

Jason talks to Scott Terrio, Manager of Consumer Insolvency at Hoyes Michalos. Scott is here to discuss the impact of COVID-19 on businesses, focusing on the Canadian Emergency Business Account (CEBA). Jason and Scott will also delve into the economic challenges faced by various sectors and the diverse effects of the pandemic on businesses and the unexpected impacts on certain sectors during different phases.

Episode Highlights:

• 01:06: Scott provides an overview of his role and the services offered by Hoyes Michalos, highlighting their focus on personal insolvencies and their significant experience in the field.
• 02:52: Jason introduces the main topic, discussing the Canadian Emergency Business Account (CEBA) and its implications for businesses.
• 03:24: Scott explains the purpose of the CEBA and its role in providing financial support to businesses during the economic downturn caused by the pandemic.
• 07:02: Scott provides insights into the diverse range of businesses significantly impacted by the pandemic, highlighting sectors like restaurants, bars, entertainment, tattoo artists, and flight attendants.
• 12:19: Jason outlines the current challenges faced by business owners, including loans coming due, economic difficulties in specific sectors, and cash flow constraints.
• 13:12: Scott highlights the aggressive actions taken by the Canada Revenue Agency (CRA), freezing accounts, and putting additional pressure on businesses. He also mentions businesses using funds meant for HST or payroll to sustain operations during the pandemic.
• 16:30: Scott emphasizes the importance of seeking assistance promptly, sharing insights from their experience that individuals often take 12 to 24 months to reach out for help when realizing they're in financial trouble.
• 28:21: Scott introduces the concept of tribal knowledge derived from the US and emphasizes the inclusion of various unsecured debts in a consumer proposal, such as tax, HST, credit cards, personal loans, and more.
• 28:56: Scott compares the insolvency code in Canada to the U.S. He emphasizes that Canada's system is more gentle, less litigious, and cheaper.

Key Points:

1. Scott provides insights into the struggles of small businesses, ranging from restaurants and bars to tattoo artists and flight attendants, highlighting the diverse impact of the pandemic across different industries.
2. The discussion covers the economic uncertainty during the early days of the pandemic, the unexpected impacts on sectors like flower shops, and the challenges faced by businesses in terms of ramping up and letting go of employees.
3. Scott addresses counterproductive behaviours individuals exhibit during financial struggles and stresses the legal obligation of trustees to provide options.

Tweetable Quotes:

• "Time is the enemy of debt. Seeking assistance promptly is crucial. Waiting 12-24 months to address financial troubles can exacerbate the situation."
• "Consumer proposals offer a more inclusive approach, covering tax, credit cards, and more. Understanding the nuances helps dispel misconceptions about the insolvency process."
• "In the complex game of finances, early intervention is your winning strategy. Act promptly, seek advice, and navigate the challenges strategically to secure your financial well-being."

Resources mentioned:

• https://www.linkedin.com/in/scott-terrio/?original_referer=https%3A%2F%2Fwww%2Egoogle%2Ecom%2F&originalSubdomain=ca

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