Re-raising an argument previously dismissed on its merits – an abuse of process?

The Court of Appeal, in the case of Harvey v Dunbar Assets plc [2017] EWCA Civ 6, has held that it constitutes an abuse of process for a debtor to seek to set aside a second statutory demand on the basis of an argument previously raised and dismissed by the Court on its merits.

The background

In 2008, Mr Harvey gave a personal guarantee in favour of Dunbar Assets Plc (Dunbar) as security for the borrowing of a company. The guarantee was called in by Dunbar and a statutory demand accordingly served on Mr Harvey. Mr Harvey applied to set the statutory demand aside on the basis of a promissory estoppel argument to the effect that Dunbar had purportedly assured Mr Harvey that the guarantee would never be called in.

At first instance, the District Judge considered the argument but dismissed the application on its merits (or lack thereof). Mr Harvey was subsequently successful in his appeal against the dismissal of his application but his success at appeal stage was based on a completely separate argument relating to a technicality regarding the execution requirements of the guarantee. Mr Harvey’s promissory estoppel argument had been specifically abandoned.

Some years later, a second statutory demand was served on Mr Harvey for the same debt. Mr Harvey made an application to set aside this secondary statutory demand on the ground of the promissory estoppel argument which had previously been considered and dismissed by the Court. Mr Harvey’s application was dismissed at first instance, following which Mr Harvey appealed the decision to the High Court. In the High Court, Judge Kaye QC applied the principle laid down in the leading authority of Turner v Bank of Scotland plc [2000] BPIR 683 and held that where there had been a previous decision on the merits of an application, unless there had been a change of circumstances or other valid reasons to do so, the Court would not allow the debtor to re-raise arguments previously raised.

Mr Harvey was granted permission by Lewison LJ to appeal Judge Kaye QC ‘s decision to the Court of Appeal.

The Court of Appeal’s decision

The Court of Appeal upheld the decision made in the High Court and deemed it an abuse of process for a debtor to repeatedly dispute a debt through the course of a bankruptcy procedure where the debtor’s arguments had previously been considered and dismissed on their merits. For the Court to continually reconsider arguments previously heard and determined would be waste of the Court’s time and a waste of the parties’ money.

Henderson LJ also noted that during the course of a personal bankruptcy procedure, there are multiple stages at which a debtor has the opportunity to raise a dispute about his alleged indebtedness to the creditor. These stages include:

-An application to set aside the statutory demand;

-The bankruptcy petition hearing;

-An application under section 375 of the Insolvency Act 1986 to review, rescind or vary any order;

-An application to annul a bankruptcy order under section 282 of the Insolvency Act 1986.

In the circumstances of this case, the Court of Appeal upheld Judge Kaye QC’s finding that there were no special or exceptional circumstances which justified the re-opening or re-arguing of the promissory estoppel argument. Mr Harvey’s appeal was dismissed.

What we can learn from this

The Courts have now made it abundantly clear that barring any exceptional circumstances or a change in circumstances, they will not entertain an attempt by a debtor to raise arguments which have already been heard and dismissed on their merits, nor will they entertain an attempt by a debtor to raise arguments which should properly have been raised to the Court at an earlier stage.

This should be a sobering lesson to debtors who erroneously believe that the most effective method by which to put forward their position to the Court is to advance every argument available to them regardless of their prospects of success. Similarly, this case serves as a useful addition to a practitioner’s arsenal when faced with the possibility of re-litigating a point which has been raised (or should have been raised) previously.

Harvey v Dunbar Assets plc [2017] EWCA Civ 6

Chris Nolt: Taxation on the Sale of Farm and Ranch Property | TSLN …

Taxes on the sale of farm and ranch property can erode the wealth a family has worked a lifetime for by 25% or more. If you are considering selling land, livestock, crops, machinery or equipment, consult with your tax advisors to learn about the potential tax consequences of the sale and what you can do to preserve your wealth.

Various tax rates and tax treatment apply to the different types of assets involved with the sale of a farm or ranch. It is important that you and seek direction from your tax advisors when purchase price allocation is being negotiated. How you allocate the sales price to the assets of your ranch will determine the tax you ultimately may pay.

Below is a list of asset categories and the type of tax owed on each category:

Inventory and Supplies: Crops, fertilizer, etc.

o Taxed at ordinary income rates.


o Raised livestock – breeding stock

o Cattle and horses – held greater than two years – taxed at capital gain rates.

o Other livestock – held greater than one year – taxed at capital gain rates.

o There is no cost basis in raised livestock.

o Purchased livestock – Breeding stock

o Cattle and horses – held greater than 2 years – taxed at capital gain rates.

o Other livestock – held greater than 1 year – taxed at capital gain rates.

o Cost basis is purchase price. Depreciation recapture rules apply.

o Purchased or raised livestock that is held for sale

o Taxed at ordinary income rates.


o Irrigation systems, swathers, bailers, tractors, etc. IRC Section 1245 assets. Recapture of depreciation applies.

Ranch House

o IRC Section 121 Principal Residence Exclusion allows an individual to exclude up to $250,000 of taxable gain from the sale of a principal residence and a married couple filing a joint return to exclude up to $500,000 of gain. Homes owned in a corporation are not eligible for the Principal Residence Exclusion.


o Single-Use Property – IRC Section 1245 depreciation recapture applies.

o IRC Section 1250 Property – potential depreciation recapture may apply.


o Gain taxed at capital gain rates.

Below is a summary of the four ways investors may be taxed on the sale of a farm or ranch:

1. Federal Ordinary Income Tax: Taxpayers will be taxed at rates up to 39.6% depending on taxable income.

2. Depreciation Recapture: Taxpayers will be taxed at a rate of 25% on all depreciation recapture.

3. Federal Capital Gain Taxes: Investors owe Federal capital gain taxes on their economic gain depending upon their taxable income. Since a new higher capital gain tax rate of 20% has been added to the tax code, investors exceeding the $400,000 taxable income threshold for single filers and married couples filing jointly with over $450,000 in taxable income will be subject to the new higher tax rate. The previous Federal capital gain tax rate of 15% remains for investors below these threshold income amounts.

4. New Medicare Surtax Pursuant to IRC Section 1411: The Health Care and Education Reconciliation Act of 2010 added a new 3.8% Medicare Surtax on net investment income. This 3.8% Medicare surtax applies to taxpayers with net investment income who exceed threshold income amounts of $200,000 for single filers and $250,000 for married couples filing jointly. Pursuant to IRC Section 1411, net investment income includes interest, dividends, capital gains, retirement income and income from partnerships (as well as other forms of unearned income).

5. State Taxes: Taxpayers must also take into account the applicable state tax, if any, to determine their total tax owed.

Upcoming issues of The Fence Post will feature articles on how to save taxes on the sale of farm and ranch property.

Chris Nolt is the author of the book; Financial Strategies for Selling a Farm or Ranch and the owner of Solid Rock Wealth Management, Inc. and Solid Rock Realty Advisors, LLC, sister companies dedicated to working with families around the country who are selling a farm or ranch and transitioning into retirement. To order a copy of Chriss book, call 800-517-1031 or visit: and

Gateway One Lending & Finance Announces Executive Leadership Changes


Gateway One Lending amp; Finance, LLC (Gateway One), a subsidiary of TCF National Bank and an indirect subsidiary of TCF Financial Corporation (TCF) (TCB), recently announced the appointment of Todd A. Pierson as president, Gateway One Lending amp; Finance and Andrew B. Sturm as executive vice president and chief operating officer. Pierson is responsible for managing all aspects of the Gateway One business and Sturm leads business operations. Pierson reports to Michael S. Jones, executive vice president, consumer banking for TCF. In conjunction with these appointments, Brian MacInnis, who previously served as chief executive officer of Gateway One, and David MacInnis, who served as president of the business, concluded their employment with TCF and have decided to pursue other endeavors outside of TCF.

“Todd is the ideal choice to lead Gateway One through its next chapter and formulation of a new strategy together with his leadership team,” said Jones. “Todd has been with Gateway One since its inception and has played a significant role in the growth and expansion of the business. TCF is committed to the auto finance business, which is a crucial contributor to TCF’s strategy of asset diversification, and we are excited about supporting Gateway One in its next stage of development. Together with Andrew Sturm and the entire Gateway One leadership team, I’m confident that Todd will help the business achieve its full potential. I also want to acknowledge the contributions of Brian and David MacInnis during their ten years of service to Gateway and, more recently, TCF. They led Gateway with integrity and character.”

Pierson added, “Gateway One has seen tremendous growth since it became part of TCF Bank in 2011 with originations reaching $3.6 billion in 2016. I am honored to have the opportunity to lead this outstanding organization and its dedicated team members. I look forward to building on Gateway One’s strong track record of outstanding service to both our dealer partners and our customers. In building a future strategy for Gateway One, we are actively seeking to contribute to all of TCF’s strategic pillars of diversification, profitable growth, operating leverage and core funding. Now that we have achieved significant growth, we will be shifting our focus toward stable profitability with a focus on efficiency and effectiveness.”

Todd Pierson joined Gateway One at its inception as chief operating officer and oversaw sale and credit among other responsibilities. As an 18 year veteran of the auto finance industry, Pierson served in a number of senior executive positions with Onyx Acceptance Corporation prior to joining Gateway One. His experience outside of auto finance includes various leadership roles at Ceridian Tax Services and Hewlett-Packard.

Andrew Sturm joined Gateway One in 2010, serving as executive vice president, loan servicing. He has more than 16 years of experience in the auto finance industry and his prior experience includes serving in senior leadership roles with Onyx Acceptance Corporation.

About Gateway One Lending amp; Finance
Gateway One Lending amp; Finance, LLC, a subsidiary of TCF National Bank, is an indirect automotive origination and servicing company that is headquartered in Anaheim and conducts business in all 50 states through its network of more than 11,400 franchise and independent dealer relationships. In 2016, Gateway One originated $3.6 billion in auto loans. For more information about Gateway One Lending amp; Finance, please visit

About TCF
TCF is a Wayzata, Minnesota-based national bank holding company. As of December 31, 2016, TCF had $21.4 billion in total assets and 339 branches in Illinois, Minnesota, Michigan, Colorado, Wisconsin, Arizona and South Dakota providing retail and commercial banking services. TCF, through its subsidiaries, also conducts commercial leasing, equipment finance, and auto finance business in all 50 states and commercial inventory finance business in all 50 states and Canada. For more information about TCF, please visit

Click here to subscribe to news release email alerts for TCF Financial Corporation.

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BRIEF-GSV Capital Corp – Qtrly net investment income $0.17per share

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Repealing Affordable Care Act Taxes on Upper-Income Workers and Savers

The House Republican proposal to repeal and replace the Affordable Care Act would eliminate several taxes imposed under the Act. Among these is the Net Investment Income Tax that imposes a 3.8 percent surtax on income from investments. It applies to investment income of married couples with more than $250,000 of adjusted gross income, and single filers with more than $200,000 of adjusted gross income. This tax, in effect, extended the Medicare portion of the payroll tax to investment earnings for the first time. Critics complain that the repeal would benefit the rich, and cost the Treasury substantial revenue. They are looking only at the static “distribution tables” and ignoring the widespread economic benefits of repeal.

The Net Investment Income Tax is a bad tax, and its repeal will benefit everyone. The high tax rate on individual saving retards capital formation, which depresses productivity and wages. We estimate a “static” revenue loss from repeal at $628 billion over ten years, assuming no gain in GDP from the lower tax rate. On a static basis, that gain would fall only on individuals in the top 20% of the income distribution. But factoring in the “dynamic” growth effects of the repeal tells a different story. Repeal would raise employment by 133,000. The economy would be 0.7 percent larger, and wages about 0.6 percent larger. The income gains would be spread over all income levels. After-tax incomes in the bottom 80% of the income distribution would be about 0.65% higher than with the tax in place. They would share in the gains. The revenue cost would drop to about $444 billion, about 30% less than in the static estimate.

The repeal plan would also eliminate the 0.9 percent Medicare Hospital Insurance surtax on incomes above $250,000, which boosts the 2.9 percent HI tax to 3.8 percent. That tax also falls mainly on the rich. However, it discourages hours worked by high-income people, reduces the output of their businesses, and acts in part as a drag on earnings of their coworkers and employees. Its repeal, too, would benefit a wider group of income earners than is shown in the static distribution tables.

How to Report Social Security Income to the IRS the Right Way

First, start by taking your Social Security benefits and then dividing that amount by two. Add in taxable income from other sources, including work income, investment income, taxable pension and retirement payments. If that total is less than $25,000 for single filers or $32,000 for joint filers, then you wont have to include any of your Social Security benefits as income.

VA partners with community organization to end veteran homelessness

“VA remains committed to preventing and ending Veteran homelessness, but we cannot achieve this goal alone,” said Anthony Love, senior advisor and director of community engagement for VHA’s Homeless Programs Office.

“Partnerships are critical to providing the support needed to help veterans exit homelessness, and to identifying local housing and employment opportunities that help them remain stably housed,” Love said. “Military Outreach USA’s Adopt-a-VA program makes it easier than ever for everyone to get involved and support veterans in their communities.”

The VA’s partnership with Military Outreach USA in 2016 led to donations of more than $700,000 for homeless veterans.

“Adopt-a-VA gives those who want to help our Veterans a way to help,” said Joseph Palmer, Military Outreach USA executive director.

Communities will be able to participate in the program by donating household items and assisting with collection drives for move-in essentials such as cleaning products and small appliances.

Since 2010, veteran homelessness decreased by nearly 50%, and decreased four times more than the previous year with 17% from 2015 to 2016, according to the VA.

Although VA loans don’t need a down-payment, increasing home prices can make it difficult for this population to become homeowners.

Do ‘No Money Down’ Bankruptcies Help or Hurt Debtors?

Diane Davis

The “no money down” bankruptcy, where debtors pay nothing in attorneys’ fees before
filing for Chapter 13 bankruptcy, is a nationwide phenomenon reshaping the consumer
bankruptcy system.

Chapter 7 bankruptcy, in contrast, requires the immediate payment of attorneys’ fees.

Though “no money down” might sound like a good idea to the broke consumer desperately
thinking about filing for bankruptcy, empirical data from a recent national study
suggests that “no money down” filers pay $2,000 more and have their cases dismissed
at a rate 18 times higher than if they had filed Chapter 7. That means they don’t
get the relief from the debt that prompted them to file bankruptcy in the first place.

Researchers who have been studying people who file Chapters 7 and 13 in a long-term
consumer bankruptcy research project recently released a
report entitled “‘No Money Down’ Bankruptcy.” Authors Pamela Foohey, Robert M. Lawless,
Katherine Porter and Deborah Thorne raise questions about how people access the bankruptcy
system and the extent of the benefits they get from it.

“The study is an important addition to a growing and persuasive body of research showing
that personal bankruptcy law is not race-neutral in application, even if individual
professionals have no express intent to discriminate,” Melissa Jacoby
, a law professor at University of North Carolina at Chapel Hill who teaches bankruptcy
law, told Bloomberg BNA March 13.

Jacoby was a co-principal investigator on a 2007 multi-researcher, long-term project
to understand the people who file bankruptcy and why, but had no role in the current

The current study analyzes data from 2007, and 2013-2015, which allows for the collection
of data on a continuing basis and the creation of a database that “incrementally builds”
and will allow for comparisons over time, the report states.

“The authors and principal investigators are among the most careful demographers of
consumer bankruptcy working in the field today, and the model of collecting a national
random sample, as is done here, is imperative–particularly given that the government
sharply limits the demographic information it requires on bankruptcy petitions,” Jacoby

Flaws in the System?

The “no money down” bankruptcy is a “buy now, pay later,” scheme that is “economically
but also affects consumers’ “access to justice,”
the report concludes. More than one million people file bankruptcy every year, according
to bankruptcy statistics from the Administrative Office of the US Courts.

The purpose of the report isn’t to criticize or point fingers at bankruptcy attorneys
who are the “gatekeepers”
to the system, but to “open up a conversation about what will make the bankruptcy
system more effective for the stakeholders in it,” Professor of Law Robert Lawless,
of the University of Illinois College of Law, Champaign, Ill., told Bloomberg BNA
March 8.

Stakeholders include attorneys, judges, advocates, trustees and debtors, he said.

The empirical data from the study is a national random sample and shows patterns across
the entire country, Lawless said.

The data reflects “the present world as it is,” Associate Professor of Law Pamela
Foohey, of the Indiana University Maurer School of Law, Bloomington, Ind., told Bloomberg
BNA March 10.

There has never been a national study on this topic, Foohey said. The study “goes
where the data takes you,”
she said.

The data shows that we have an inefficient bankruptcy system, Foohey said. “Money
is influencing access to the legal system that helps people deal with money problems,”
she said.

Choosing Which Chapter

In Chapter 7 bankruptcy, a debtor gets a quick discharge –his or her debt is wiped
out–but must give up assets that aren’t exempt. In Chapter 13 bankruptcy, a debtor
must make monthly payments to complete a three-to-five year repayment plan before
receiving a discharge, but most debtors can keep property like their homes and cars
as they make plan payments.

Typically, debtors pay an attorney an average of $1,229 up front before their attorney
files a Chapter 7 bankruptcy. Attorneys charge an average of $3,217 to file a Chapter
13 bankruptcy because it is more complicated than filing a Chapter 7 and takes longer,
but debtors can pay attorneys’ fees over time as part of their case.

More than 95 percent of people who file under Chapter 7 receive a discharge, whereas
only about one-third of debtors in Chapter 13 cases end in a completed repayment plan
so that they receive a discharge. Most Chapter 13 bankruptcies end without debt forgiveness,
according to the report.

Most people who need to file bankruptcy will hire an attorney. As a result, attorneys
play a significant role in determining which chapter of the Bankruptcy Code their
case is filed under.

The two most significant predictors of whether a consumer files a “no money down”
bankruptcy are a person’s place of residence and a person’s race, according to the
report. Debtors who live in judicial districts with high Chapter 13 filing rates are
more likely to file “no money down” cases, and African Americans are more likely to
file “no money down”
Chapter 13s than other debtors, the report says.

ABI’s New Commission

The timing of the research study coincides with the American Bankruptcy Institute’s
March 13 announcement of the creation of a commission to modernize the consumer bankruptcy
system “with practical and cost-effective recommendations.”

The commission, which will be co-chaired by retired bankruptcy Judges William Houston
Brown and Elizabeth Perris, will consist of 15 experts who represent various stakeholders
in the consumer bankruptcy system. One of the study’s authors, Robert Lawless, is
the commission’s reporter.

The commission expects to issue a final report in December 2018.

The “No Money Down” study is an “important empirical work” of “careful and fair scholarship,”
Prof. Angela Littwin, of The University of Texas School of Law, Austin, Tex., told
Bloomberg BNA March 13. Littwin studies bankruptcy, consumer and commercial law from
an empirical perspective. She was a principal investigator on the 2007 consumer bankruptcy
project but wasn’t involved in the current study.

The ABI’s commission will find the study useful and will take it “seriously” when
making their policy proposals, Littwin said.

Attorneys as Gatekeepers

Attorneys play an important role in bankruptcy as they are the “gatekeepers” to the
system, Lawless said.

Attorneys have a duty to advise clients which bankruptcy chapter to file under based
on the best interests of the client, Lawless said. The “no money down” Chapter 13
filing may be in the client’s best interests in that particular case, he said.

“No money down” Chapter 13s, however, create a “fundamental tension between attorneys’
and debtors’
interests, the report states. Attorneys may prefer that their clients file under Chapter
13 even if some debtors can pay attorneys’
fees up front. They spend more time on Chapter 13s than Chapter 7 cases, which allows
attorneys to charge their clients more money.

“‘No money down’ Chapter 13 simply is good business,” according to the report. Based
on the data, attorneys may be placing their business interests above their client’s
financial interests, the report states.

The report is important in “untangling race and Chapter 13s,” Littwin said. Based
on the report’s findings, attorney steering likely played a role in the large numbers
of African Americans filing Chapter 13 bankruptcy, she said.

In districts where there are higher rates of Chapter 13s filed, attorneys are expected
to put clients in Chapter 13, Littwin said. Filing Chapter 7 in those districts will
be challenged, she said.

Timing of Paying Fees

One solution to combat the effects of the “no money down” bankruptcy is to allow debtors
to pay bankruptcy attorneys’ fees in installments during their Chapter 7 cases, Foohey

Eliminating the different treatment of attorneys’
fees in Chapter 7 and Chapter 13 should allow debtors to make the chapter choice based
on their needs, the report states.

It would also “align Chapters 7 and 13 on how consumer attorneys collect fees from
clients,” Foohey said.

This change would involve amending the Bankruptcy Code and would be the “cleanest”
solution, Lawless said. It would require congressional action though, which Lawless
said is unlikely at the moment.

Littwin agrees with the report’s conclusion that reforming the timing of when debtors
pay attorneys’ fees in Chapter 7 is the “superior approach.”

Revise Judge’s Standing Orders

Another possible reform would be to change the standing orders in bankruptcy courts
that typically set a “no look” attorneys’ fee for Chapter 13 cases, the report states.
These “no look” fees are for routine Chapter 13s and give attorneys assurance that
if they charge their clients no more than that amount, the bankruptcy court will approve
their fees.

The standing orders could be changed to provide that the “no look” fee will apply
only if the debtor has paid 25 percent or more in attorneys’ fees prior to filing,
the report states.

The “no look” fee could only apply in cases where the Chapter 13 plan contemplates
substantial repayment to creditors.

Revisions to standing orders are much more likely to happen and would require only
changes to local practice and the local rules in a district, Lawless said.

Publicizing this report and encouraging bankruptcy attorneys, trustees and judges
to take a look at their data is one way to get changes made to those standing orders,
Foohey said. Judges write those standing orders and they are more likely to give the
data consideration and change those orders, she said.

New Requirements for Ch. 13 Plans

The requirements for confirmation of Chapter 13 plans could also be modified to include
a condition that the plan must make a substantial repayment to creditors, Foohey said.
This would be the least likely revision to happen because it involves a substantial
change to the Bankruptcy Code, she said.

Under this proposal, bankruptcy judges could set a standard for “substantial” that
takes into account the debtor’s circumstances. The “substantial” requirement might
eliminate “fee only” Chapter 13 plans.

This change isn’t meant to “rule out the ability to do ‘fee only’ plans, but attorneys
should be aware that they will be targeted for more judicial scrutiny,”
Foohey said.

To contact the reporter on this story: Diane Davis in Washington at

To contact the editor responsible for this story:
Jay Horowitz at

More millennials grappling with high debt loads, says bankruptcy trustee

Rob Kilner gets a lot of visits from cash-strapped millennials. The Barrie, Ont.-based licensed insolvency trustee says there’s been a decided uptick – 20 per cent over the past five years – in the number of twenty- and thirtysomethings who are seeking solutions to their debt woes.

Many are homeowners.

“I’m seeing more and more [millennials]. It’s a substantial increase. Every time you see a millennial walk into your office – it’s disturbing,” he says.

Part of the problem, Mr. Kilner says, is how easy it is to borrow money these days. Credit cards are all-too-easy to obtain, and payday loans are just a click away. Those issues, combined with a lack of financial education and soaring housing costs, are laying the groundwork for a troublesome financial future, he says.

Millennials with part-time or contract work: We want to hear from you

Our tool: Is your mortgage leaving you house poor?

Research highlights this trend. Thirty-one per cent of millennial respondents feel it’s not a “big deal” if they carry a balance on their credit cards, according to a November, 2016, survey by Manulife Financial. The survey also showed that millennial homeowners, those between ages 20 and 34, report the lowest median amount of emergency funds among those surveyed at just $3,500.

According to the Bank of Canada, the steady inc rease in the country’s household debt has been driven by highly indebted households under the age of 45, which doubled to 8 per cent of all indebted households in 2012-14 from 4 per cent in 2005-07.

Mr. Kilner says the bulk of his younger clients come in after they have defaulted on a high-interest loan on a vehicle or on a payday loan. “Millennials are very susceptible to that – because theyve grown up [with debt].”

Although the Office of the Superintendent of Bankruptcy Canada doesn’t track millennials specifically, there was a 4.4-per-cent jump in the number of consumer debt-settlement proposals to creditors. Such appeals are made as a last resort before being forced to file for personal bankruptcy. Across Canada, that number increased to 125,907 proposals in September, 2015, from 120,261 a year earlier.

Trevor Pringle, a licensed insolvency trustee with Hamilton-based Spergel, says his clients typically have high levels of credit-card debt and student loans.

“People more readily carry debt,” says Mr. Pringle.

“The credit card companies grant them the credit cards, and they use them and they don’t have the means to pay them back,” he says. “They also have student loans that are not dischargeable, which complicates their situation,” he says, in reference to debts that are not eliminated by declaring bankruptcy.

Home buying: a whole new layer of debt

Dave Bryant, a Toronto-based mortgage broker, spends a lot of his time talking millennials out of buying homes. “It has cost me business,” he admits.

He says most of his younger clients have between $20,000 and $30,000 in student debt, have low-paying jobs or work on commission – which means their earnings can vary wildly year to year.

But despite being laden down with debt, many still aspire to home ownership. “Most millennials are looking to buy the preconstruction condos,” says Mr. Bryant, following the advice of a realtor who tells them it’s a good investment plan. Armed with a down payment from their parents, they then apply for a letter of preapproval for a mortgage.

And that’s where they run into trouble, he says.

“You actually have to qualify for that letter of pre-approval,” says Mr. Bryant, something that can’t happen if a person has only worked for six months to a year – a category many millennials fall into.

Plus, “they need to create that credit file,” says Mr. Bryant, adding that millennials need to demonstrate they have a solid credit history with a card of their own – not a joint account with a parent. He suggests establishing good credit by putting small purchases consistently on a credit card – and paying them off entirely each month.

Mr. Bryant also counsels millennials to pay their debt off before taking on the financial burden of a condo or house. “You need to pay that down,” he says. “[Debt from student assistance programs] is not going to go away.”

For those millennials who have taken the plunge and bought a home recently, the debt can quickly become insurmountable. “If we see a millennial and home owner -and they’re bought recently – these loans are very high,” says Mr. Kilner. “To own a house right now, there’s a very high mortgage. And the income stream hasn’t kept pace.”

He says many millennials are spending over half their take-home income on mortgages. But they still have to cover utilities, living expenses and food. That’s where the Visas and MasterCards come in. “They end up living off credit,” says Mr. Kilner.

Click here to see if you can afford a mortgage, and the rest of your real life expenses.

Mr. Pringle says that although he does see clients who are house-poor, “one of the reasons people have been able to avoid insolvency is that they’ve been able to leverage their equity in their houses with rising house prices.”

That situation likely won’t last. “At some point down the road, they’re going to be in a situation where house prices aren’t rising and they won’t be able to leverage that equity and they’re going to have to deal with it,” says Mr. Pringle.

Mr. Kilner is bracing for more clients when interest rates rise. Right now, he sees six to seven millennials a month – up from one every six months just a few years ago – who come in to file a consumer proposal, an appeal to creditors, or file for bankruptcy.

“As interest rates start to increase, that’s when we will see a lot more losing their houses,” he says.

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