Keeping PLOC Open After Graduating

[boyo]

Has anyone managed to keep their PLOC open after graduating and not having it converted into a loan with regular payments? I have one with Scotia and the rep told me I could keep it as is if I "go into practice". I guess technically it would be converted into a business LOC.

The catch is that I would need to be incorporated. I know many partners at Bay Street firms incorporate for their partnership, but I can't imagine that young associates do this (or maybe not any associates at all).

Anyone have experience or thoughts on this?

[CleanHands]

Really depends on the terms of the specific PLOC. When I was shopping around, CIBC for example had terrible rates relative to others but it explicitly permitted graduates to keep it after graduating.

[boyo]

6 minutes ago, CleanHands said:

Really depends on the terms of the specific PLOC. When I was shopping around, CIBC for example had terrible rates relative to others but it explicitly permitted graduates to keep it after graduating.

Yea I remember how bad CIBC's terms were. But I am more wondering if associates ever incorporate at bigger firms.

[Apple]

I don't see why an associate would bother incorporating unless they had some legitimate interest to protect. The corporate vehicle for most incorporated lawyers is typically for tax planning purposes so unless an associate has a reason to do this I don't see why they would. 

As for LOC after graduation, RBC let me keep my exact plan including my prime rate. I've had a good relationship with them, unlike CIBC who had terrible rates and pretty much everything else about their offer was garbage. It's not something I spoke to them about when I entered law school but my advisor and the bank has been generous enough to get me this benefit. 

[boyo]

5 hours ago, Apple said:

I don't see why an associate would bother incorporating unless they had some legitimate interest to protect. The corporate vehicle for most incorporated lawyers is typically for tax planning purposes so unless an associate has a reason to do this I don't see why they would. 

As for LOC after graduation, RBC let me keep my exact plan including my prime rate. I've had a good relationship with them, unlike CIBC who had terrible rates and pretty much everything else about their offer was garbage. It's not something I spoke to them about when I entered law school but my advisor and the bank has been generous enough to get me this benefit. 

I guess in this case the reason to incorporate would be to satisfy Scotia and keep the LOC on the same terms. I asked the rep if they'd allow me to keep it without incorporating and she said no. Maybe she's incorrect about that so maybe I'll ask again or ask another rep.

[Apple]

28 minutes ago, boyo said:

I guess in this case the reason to incorporate would be to satisfy Scotia and keep the LOC on the same terms. I asked the rep if they'd allow me to keep it without incorporating and she said no. Maybe she's incorrect about that so maybe I'll ask again or ask another rep.

This does strike me as odd. Definitely clarify with Scotia! But if the cost of incorporating would be worthwhile and they’re willing to do that then it’s a no brainer to incorporate! 

[PzabbytheLawyer]

Mine is with Scotia and it is open until 2 years post articling. So I'm an associate but it's still open.

Depends on your terms though. Check with your rep and read your agreement carefully.

If they say no, mention you know this has been a policy for law PSLOCs that it stay open for two years post articling and you want the same treatment because x y z.

[boyo]

57 minutes ago, Apple said:

This does strike me as odd. Definitely clarify with Scotia! But if the cost of incorporating would be worthwhile and they’re willing to do that then it’s a no brainer to incorporate! 

 

53 minutes ago, PzabbytheLawyer said:

Mine is with Scotia and it is open until 2 years post articling. So I'm an associate but it's still open.

Depends on your terms though. Check with your rep and read your agreement carefully.

If they say no, mention you know this has been a policy for law PSLOCs that it stay open for two years post articling and you want the same treatment because x y z.

Thanks for the responses! I think most likely the rep is just not knowledgeable in the area. It's a rep from my hometown where I can't imagine they deal with very many law students and lawyers. I think I'll go back and have a discussion.

[PzabbytheLawyer]

1 hour ago, boyo said:

 

Thanks for the responses! I think most likely the rep is just not knowledgeable in the area. It's a rep from my hometown where I can't imagine they deal with very many law students and lawyers. I think I'll go back and have a discussion.

I would recommend speaking to a rep specifically designated for this. There's a list floating around the internet somewhere. There's a specific rep for each law faculty, though you don't have to only use your law faculty designate.

[Cool_name]

On 2/2/2022 at 3:18 PM, PzabbytheLawyer said:

Mine is with Scotia and it is open until 2 years post articling. So I'm an associate but it's still open.

Depends on your terms though. Check with your rep and read your agreement carefully.

If they say no, mention you know this has been a policy for law PSLOCs that it stay open for two years post articling and you want the same treatment because x y z.

I can confirm this policy. 
 

For repayment, they can also extend the term to 15 years (which is helpful for mortgage financing).

To add too, banks like lawyers and are happy to give them money. 
 

A new loc can always be obtained post articles if required. (Granted given your goal should be to get out of debt, this isn’t recommended)

[PzabbytheLawyer]

30 minutes ago, Cool_name said:

For repayment, they can also extend the term to 15 years (which is helpful for mortgage financing).

Thanks for this! I had no idea!