Insolvency
If you’re a Canadian farmer struggling with overwhelming debt, you’re not alone. In fact, according to Statistics Canada data released in June 2023, Canadians owe roughly $1.85 to consumer credit, mortgage, and non-mortgage loans for every dollar of disposable income.
The current economic environment, marked by high inflation, rising interest rates, and geo-political conflict has made it especially difficult for business owners to stay on track or grow at anticipated rates. Farm owners are feeling the pinch and uncertainty can exacerbate an already taxing situation.
Insolvency will look different for every farm. Whether it’s engaging in restructuring or filing for bankruptcy, there are various options available to farmers in need of a financial solution.
MNP’s insolvency team of Licensed Insolvency Trustees (LITs) and advisors can assist in determining your options, what approach is the best for you and your operation, and how to help you look towards financial freedom in the future.
What's your challenge?
Struggling to pay bills
If making ends meet has become impossible, it’s important to act sooner than later. It can be incredibly stressful trying to manage the day-to-day operations of your farm when fielding calls from creditors. MNP’s team can help you assess your financial situation and find a solution that will get you back on track.
Planning for Retirement
Financial worries can make it difficult to plan for the future of your farm or your retirement. If your retirement goals are seeming more unrealistic, knowing your options and the realistic timelines that you can achieve them will give you peace of mind.
How we can help
Exploring options for Bankruptcy or Restructuring
Even though it might not feel like it, there are ways to resolve your debt. Our experienced team of LITs will assess your farm’s finances, help you decide which option is the best for you, and will be there to support you throughout the process.
Comprehensive Transition planning and Insolvency Management Solutions
Setting goals for your retirement and determining the steps it will take to reach them doesn’t have to be scary. An MNP LIT will walk you through the process and show you what your future could look like. With the added help of MNP’s succession team, planning for your retirement after insolvency can be extremely rewarding.
Frequently asked questions
You may be insolvent if your farm’s liabilities exceed its assets, and you’re unable to meet your financial obligations when they come due. Meet with an LIT to determine what insolvency options are available for your farm.
Not necessarily. You will likely be able to retain your farm through repayment negotiations and other arrangements. The protection of your personal assets depends on several factors, including your farm’s legal structure. Meet with an LIT to determine what insolvency would options are available for your farm and to safeguard your assets as much as possible.
While this may be a solution, consult with an LIT before selling assets to ensure you’re following all relevant laws and guidelines.
A Division I Proposal is a formal agreement to pay your creditors over a certain period of time. It will allow you to continue operating your farm while providing relief from immediate financial pressure. An LIT is essential to this process and will present the proposal to your creditors.
Your employees may be eligible for unpaid wages, vacation pay, and severance through the Wage Earner Protection Program (WEPP). An LIT can help you understand your employees’ rights and decide the best way to proceed to protect them and yourself.
Yes. With proper planning, financial restructuring, and effective management, it’s possible. Working with an LIT will significantly improve your chances of a successful recovery and future financial stability for your farm.
Insights
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Progress
Your farm succession plan isn’t complete until it exists in writing
The average age of farmers in Canada is increasing. Having a written succession plan becomes more important as you age, to help secure your legacy, protect your farm operation, and reduce conflict.
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Performance
April 01, 2024
Cash vs. accrual: Pros and cons of each reference margin reporting option for AgriStability
When it comes to the kind of financial reporting you’re doing for your farm, there are significant differences between cash and accrual reporting, especially when it comes to AgriStability payments. To better understand what might be more beneficial for your farm, it’s key to assess your operation to determine how best to move forward.
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Confidence
March 28, 2024
Bare trusts: Many Ontario farmers expected to have new tax filing requirements
The end of 2023 brings a new tax filing burden for farmers with regards to bare trusts. Learn how this new legislation with have a significant impact.
