Here’s the beef, the full document with footnotes and cross references that I submitted to the BC Supreme Court before my appearance. Note that I’ve left the name of the Intention Wealth company out and the actual people involved. While I still curse them, I did learn a lot from them. And they have since changed the products they support. And if I want my past by-gones be by-gones, then doggone I’ve got to do the same thing. (If you want to know who they are, contact me. I’ll tell you in person. But I won’t randomly blow it out to the universe.)

Introduction

While I do accept responsibility for the events that led up to the bankruptcy, I wish to demonstrate

  1. that there was nothing rash or hazardous about my speculations,
  2. that there has been no unjustifiable extravagance in living, and
  3. that I have not I mismanaged my financial affairs.

Out of consideration of your time and the cost of the system, I wish to outline the complex details in this document, which I will submit both to the court and to Doug Lee, my trustee, directly.

1. First I’d like to address the charge of being Rash or Hazardous

a. The course that changed my life was not rash but based in a 9 year history

The pinnacle event that brought me to where I am today was a course that I took in 2007. Taking this course was carefully considered, and recommended by a highly regarded friend.

About the course:

  • Offered by an organization now called W——.
  • Promoted “wealth coaching that educates, empowers and provides unique opportunities to become financially free within ten years or less.”[1]
  • Taught their five pillars of investing, and W—— subsequently sold investment products that conveniently fit most if not all of the five pillars taught in the course.

About my friend (G, whom I had known for nine years prior):

  • He was my immediate training supervisor when I became a motorcycle safety instructor in 1998.
  • Integrity and honesty were core qualities that I attributed to G, and over the nine years that I worked with him and became a friend, I learned a lot from him.
  • I trusted him implicitly.
  • Through association, I transferred my trust to his wife, D and her business associate, S[2], the course instructors.

Both D—– and S—- claimed to be successful investors living solely from their investments. I had no reason to doubt them. I carefully considered this course, and deemed it to be a wise and safe venture.

a. Investing in The Hear Now (THN) was not a rash decision

The Hear Now was singularly my biggest investment made through W——, and it was the failure of this investment that led to my insolvency. It was pitched locally as “The best investment opportunity I’ve ever seen” by S. It was presented as solid. Besides trusting my mentors, I also attended and listened to presentations made by the executive team of the company.

By 2010, THN was found by the Alberta Securities Commission to have “acted contrary to the public interest” and that Michael Sirman, one of the directors, made “statements that he ought to have known were misleading or omitted information necessary to make them not misleading.”[3]

In total, THN cost Canadians over $7,000,000 in investment funds, acquired through stock distribution that was in contravention to Alberta Securities laws and contrary to public interest.

This was an investment that took the ASC until 2010 to define it as illegal and in contravention with public interest.  That I invested, having attended all of the presentations, was no more rash or hazardous than the hundreds of other Canadian who were duped.

2. Second, there was no unjustifiable extravagance in living

To better understand my lifestyle during this unfortunate period (2007 -2011), it helps to understand the framework in which I have always lived: buy second hand, avoid debt, and act with compliance.

Spending Habits

Differentiating between wants and needs, and focusing on reduce and re-use are core values

  • Household items:
    • Almost every piece of furniture in my house is second hand
    • All household appliances are second hand
    • Cable-free, PVR-free household
  • Personal effects:
    • All of my clothes and my daughter’s (except for the intimates) are second hand
    • All of my daughter’s books and toys are second hand
    • I’m not cosmetically inclined.
  • Vehicles:
    • I purchased my first motorcycle for $600 and rode it for about 15 years
    • I purchased my first car for $500 and sold it four years later for $350
  • Technology:
    • I’m not an early adopter when it comes to technology, but rather a laggard
    • My iPod is second hand
    • I don’t own a tablet or an e-reader
    • I’m still using an 8-year old printer

Debt/Savings

My past excellence with managing debt and savings is best reflected by my 2007 FICO score of 815[4].

  • Historical aversion to Debt
    • First loan (mid-80’s for a used Commodore 64 for $1000) taught me that “buy now and pay later” is a long costly process, and I’ve largely avoided debt prior to university.
    • I self-funded both of my degrees through co-operative education, full and part-time work both on- and off-campus, fellowships, internships, and lastly student loans.
    •  Three years after completing my Master’s degree, I had fully paid off my student loans.
    • Never carried a credit card debt
    • Never was in arrears with my income taxes
    • Never late on utility bills or mortgage payments (remains true to this day)
  • Diligent with Savings
    • Saved $25,000 down payment of my first condo to avoid paying CMHC[5] taxes
    • Saved $29,000 for RRSPs
    • Put $12,000 into RESPs

Compliance:

I have a healthy regard for the rules and regulations that we live by in our society.

  • All federal, provincial and municipal taxes have always been paid, in full and on time
  • Instead of defaulting on my consumer loans when I hit insolvency, I continued to pay on all of my loans, right up to the day I declared bankruptcy
  • Bankruptcy was not an “Exit strategy.” In fact, I did not even consider bankruptcy as an option until 2010, when the waves of debt and despair came crashing in around me.
  • As the 170 report shows, I complied with all rules and regulations of the bankruptcy, I’ve attended all meetings, and submitted all reports, complete and on time.

Except for the debt aversion, my purchasing and compliance behavior patterns did not change during this incredibly horrible “investment period” (2007 – 2011).

3. Contrary to the 170 Report, my finances were not mismanaged

Funding sources

Contrary to the opinion that I funded my investments with consumer credit, much of the money came from a Home Equity Line of Credit which amounted to $190,000. As a secured debt now blended with my mortgage, those debts are payments that will continue to travel with me through life.

To offset the initial anticipated monthly drain of about $1500 to $1700/month, I cashed in my RRSPs, which amounted to a $29,000. Those RRSPs would offset the negative cash flow for 16 months, three times longer than what was forecasted by THN. Eventually, one by one, my investments began to fail. My husband lost his job in Sidney in 2009 and was unemployed for about four months[6]. My self-employment efforts weren’t lucrative. Debts spiraled and expenses flared, in some months reaching as high as $10,000. I had to withdraw my daughter’s remaining RESPs to help cover immediate expenses. In 2010 when The Hear Now was definitively determined a disastrous failure by the Alberta Securities Commission, I accepted that I had become insolvent.

Additional family health issues

Our daughter, A—-, who is now 7, has had medical issues since birth. For seven years now, we’ve consulted a range of specialists including pediatricians and a child psychologist, and we’ve had numerous consultations, x-rays, and ongoing medical emergencies and concerns. She also has separation anxieties.  These medical issues influenced my decision to be self-employed.

Personal employment and self-employment history

Since 2005, I have been self employed with a good income, thereby allowing me to work, earn an income, and be there for my daughter and her ongoing medical issues.

Between 2005 and 2007, I had a good income as a contractor[7] so making this decision to have one parent work from home seemed wise and manageable. When the government centralized its internal IT services, the individual contracts that were ministry-specific dried up. The ministry with whom I had a working relationship was the Ministry of Health.

Since the contracts dried up, I’ve:

  • Produced, promoted and delivered workshops on Confidence 101 in 2007/8
  • Privately contracted as a coach (past skill set includes lay counseling)
  • Delivered a range of workshops to numerous organization in town, including
    • John Howard Society (job finding skills),
    • CASA in Sooke (on conflict resolution, communications, & marketing your business) and
    • the Reflexologist Association of BC (marketing your business)
  • Written a book called The Three Strategies of the Unstoppable Woman
    • produced and distributed by a no-cost print-on-demand publisher
    • slow sales but I believe it to be a good book so steady marketing efforts are required
    • marketing strategies include an e-launch that landed me on Amazon booklists in 2010
  • I’ve developed, designed and maintain a number of WordPress-powered blogs, including
    • theflawofattraction.com (debunking get-rich-quick scams),
    • broadrider.com (online motorcycle safety), and
    • chickrag.com(my collection of past and current editorial cartoons).
    • Written for the Times Colonist, a motorcycle safety column called Arrive Alive
    • Just started contracting as the Editorial Cartoonist, with Sooke News Mirror

I believe that slow-and-steady wins the race, and I’ve been pragmatically and diligently re-establishing myself as a writer/communications/web expert.

Rehabilitation

I believe that I am rehabilitated. I was an exemplary citizen prior my sorely misguided “financial education” in 2007. Between 2007 and 2010, I followed the advice and teachings of these so-called experts. Ultimately, I am the one who set aside my own aversions to debt, I am the one who signed on the dotted line, and I am the one responsible for where I stand today. I accept that. And I sorely and deeply regret that.

Defaulting on debt cuts me to the core as it is directly against one of my core values. I struggled under the burden of debt, feeling horribly helpless, forlorn and without recourse. Deciding to declare bankruptcy was not an easy decision. But it was the only way I could see that I could get a fresh start, the only way that I could return to my earlier values of excellent spending habits, avoiding debt, and compliance. I deeply regret that I’ve had to default on my debts and declare bankruptcy. There is no chance of this ever repeating in my life.

To conclude this argument in court, I hope to briefly present:

  • the benefits of a timely discharge,
  • my tremendous regrets and the price I have already paid, and
  • my plans to return to the productive lifestyle I once enjoyed.


[1] Extracted from the company’s website.

[2] Who is later (2009) presented as a bit of a snake-oil investment sales scammer.

[3] See Appendix 2 for the documentation from the Alberta Securities Commission regarding The Hear Now. (The documents included in Appendix 2 were the Notice of Hearing http://www.albertasecurities.com/Enforcement/Enforcement%20Orders/THE%20HEAR%20NOW%20INC%20NOH%202009%2010%2027%203336508%20v4.pdf and the Decision http://www.albertasecurities.com/Enforcement/Enforcement%20Orders/Wilby_Sirman_Hear_Now_Merits_Decision.pdf and )

[4] See Appendix 3 for my official FICO score. (For obvious reasons, not included here.)

[5] Canadian Mortgage and Housing Corporation

[6] In early 2010, my husband started working in Alberta. This allowed us to stem much of the financial bleeding but by then the damage had been done.

[7] See Appendix 4 for an overview of self-employment earnings 2005 -2007. (Again, not included here for obvious reasons.)


If you find yourself in a similar situation, there is help available, there are people who can help you navigate the system and explore your options. A Matter Of Life And Debt can help those located in Victoria, BC.

Tags: ,

This entry was posted on Friday, March 2nd, 2012 at 1:15 am and is filed under Bankruptcy, My Story. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Leave a reply

Name
Mail (will not be published)
URI
Comment