debtcare.ca

Author: mgoldenberg@debtcare.ca

  • Ontario Bankruptcy Trustees – What is Their Role in a Consumer Proposal?

    Ontario Bankruptcy TrusteeWhen you feel as though you are drowning in debt, with few options available for relief, you may be considering a consumer proposal as a way to get those collection agencies off your back and to obtain some semblance of financial stability. Knowing this, perhaps you are thinking about seeking the advice or assistance of an Ontario bankruptcy trustee.

    Wait – before you enlist the services of a bankruptcy trustee, you should first know what role they play in a consumer proposal and how this can impact you.

    A bankruptcy trustee in Ontario is an individual licensed by the Superintendent of Bankruptcy. Their job is to administer consumer proposals and bankruptcies and to manage assets held in trust. They will negotiate the settlement between you and your creditors. In a proposal, that trustee will assist you in developing a proposal to present to your creditors (usually a percentage of what you owe them), and once accepted, monthly payments are made through the trustee, and the trustee transfers that money to your creditors.

    Sure, this all sounds well and good – after all, you can’t make a consumer proposal without a trustee – it is a legal agreement under the Bankruptcy and Insolvency Act and must be administered following a formal and regulated process. That being said, there are a few important things to keep in mind before you make the call to a trustee.

    Firstly, a bankruptcy trustee does not simply act on your behalf. Even though you are the one to call, this individual represents both parties (you and your creditors), not just you. This means that they are obligated to seek the most money possible for your creditors to ensure that they get as much of what they are owed as possible, while still being fair to you. What this means is that you may not necessarily be getting the best deal.

    Secondly, most bankruptcy trustees never outline how they are paid – but this is important. Although their fees are regulated, they are paid according to how much you pay to your creditors, and thus it is in their best interest to get as much money for your creditors as possible.

    So, what then are your options? Accept this and go forward? Skip the proposal all together to avoid it? No, there are ways to protect yourself and secure a consumer proposal that meets your needs. The best way to do this is to work with a financial organization experienced with debt relief solutions, one that can offer you representation and protect you throughout the entire proposal process. These professionals can walk you through the process, ensuring that you are aware of and understand your choices, as well as administer your paperwork.

    Know before you go: before you call that trustee, think about getting personal representation – someone who will look out for your best interests rather than their own or that of your creditors. DebtCare Canada can help – call us today at 1-888-890-0888.

  • CBC News Report: Payday Loan Interest

    Payday LoanAs a debt solutions organization, we often have clients come in and talk about problematic payday loans and how they continue to struggle with meeting the repayment requirements. When it comes to payday loans, we always try and suggest other forms of financial relief – and a recent CBC News report demonstrates clearly why we might do so.

    The report, released earlier this year, examines the case of a B.C. payday lender who was ordered to repay over $1 million to customers after charging up to 35% interest.

    By law, payday loan lenders cannot charge more than 23% interest per month. And sure, this may seem like a fair deal, the existence of a cap on how much lenders can charge, but 23% is still a whopper when it comes to the end amount that you are paying to borrow a few hundred dollars!

    Check out the full article here: http://ca.finance.yahoo.com/news/cash-store-ordered-pay-1m-illegal-payday-loans-152335287.html

    Payday loans are never a good idea, and should be avoided at all costs – not only because of the exorbitant interest rates, but also because they become increasingly difficult to pay off.

    Don’t let a payday loan interest cap fool you – there are many other options as far as financial relief. Contact DebtCare Canada today for more information: 1-888-890-0888.

  • Tax Deadline – Have a Plan if You Cannot Pay Before the CRA Knows It

    Tax DeadlineThe tax deadline is fast approaching – the deadline to file your 2013 return, as always, is April 30th – are you ready? Getting your returns in order and filing on time can sometimes be an annual hassle, but it can’t be avoided. Filing online is growing in popularity, and can be done from the comfort of your own home. But what if you miss the deadline – what are the consequences of this?

    If filing taxes seems like a hassle, then dealing with the consequences of missing the tax deadline can seem like a nightmare, especially if you owe. Missing the deadline when you are owed money just means waiting longer to receive it (why would anyone want to do that?), but when you owe money, the Canada Revenue Agency (CRA) won’t wait – and that tax debt will just continue to grow the longer you wait to pay it.

    What are we talking about here? When you owe a tax debt, interest and penalties accumulate at an alarming rate, to the tune of 5% of the total tax debt plus 1% monthly for up to 12 months. Additionally, if you filed late in previous years, your penalty can increase to 10% of the total tax debt plus 2% monthly for up to 20 months. These additional charges are significant, and left unpaid can grow to become larger than the total debt you originally owed.

    Interest and penalties are not the only things that contribute to your tax debt becoming seriously problematic. Once the CRA knows that you owe, they can get pretty aggressive in their attempts to gather the money. Good cop, bad cop tactics to obtain your personal information, collection calls, and enforcement action (wage garnishments, frozen bank accounts) are all realistic and costly outcomes of a missed deadline and failure to pay.

    So, knowing all of this, how can you avoid the irksome effects? If you know that you are going to end up owing money to the CRA it is a smart idea to have a plan in place before they learn about it. Firstly, if you have the ability to pay the debt in full upon filing, great – do that. This will solve the problem before it starts and leave you in a fresh financial position tax-wise. However, if you don’t think you can pay the debt in full, getting a plan in place to do so is a very smart idea.

    For more information about avoiding the consequences of a missed tax deadline please contact DebtCare Canada by calling 1 (888) 890-0888 or visit us online at www.debtcare.ca

  • Realistic Debt Solutions – What Are Your Options?

    Being in debt can be a drag – but there are options available. However, before making any decisions about which route to take it is always a good idea to understand what each of the various debt solutions entails. Check out our chart to find out the main differences between the 4 most popular debt solutions out there.

    DebtCare Chart

    For more information about any of these debt solutions or to get a plan started please contact DebtCare Canada by calling 1 (888) 890-0888.

  • What to Do When CRA Collections Get Aggressive

    What to Do When CRA Collections Get Aggressive

    CRA CollectionsTax time is just around the corner, and for many Canadians this is just another item on the to-do list that takes a bit of time. For others however, tax time can be incredibly stressful, especially if you owe, or are going to owe, money. Once the Canada Revenue Agency (CRA) finds out about this debt, collection agents can get pretty aggressive – so how can you deal with this? Here are some tips on how to protect yourself when CRA collections come calling.

    Firstly, if a debt is owed to the CRA, and you have the ability to do so, pay it off completely. Once you are paid up, collection calls will cease and you will no longer have to worry about it.

    However, if you are not in a financial position to pay off the debt, other arrangements will be required. In this case, the CRA will often start out with a friendly call in an attempt to obtain your personal information and to create a monthly payment plan. At the beginning this may not seem too bad, but keep in mind this can end up hurting you in the end. As a result of your giving information freely, the CRA now has the ability to commence enforcement action (freeze your bank account, etc.) when you cannot meet their strict and unmanageable payment requirements (the CRA will not accept extended payment plans and interest continues to accumulate).

    If you refuse to give your personal information freely, this is when the situation can turn very ugly, very quickly. That ‘friendly’ CRA agent likely won’t seem so friendly anymore, and when collection calls begin it can be difficult to get them to stop. At this point, since a debt is owed, the CRA may initiate enforcement action, including garnishing your wages or placing a lien on your property.

    Negotiating directly with the CRA is not the best idea. However, paying the debt is – and therefore that should be your very first consideration. Certain avenues exist that may help you to rid yourself of those troublesome and concerning collection calls. Depending on the size of your tax debt, some of the options available may include a consumer proposal or debt consolidation.

    As mentioned, if you have the ability to pay a tax debt completely, do so. This will end up saving you not only interest, but the stress that accompanies this type of financial problem.

    For more information about how to deal with CRA collections, please contact DebtCare Canada by calling 1 (888) 890-0888 or visit us online at www.debtcare.ca

  • March Break Madness – Don’t Rack Up That Credit Card Debt

    Credit Card DebtHey parents: March Break is right around the corner, and for many Canadians with kids this can mean a week filled with activity and outings. And these outings can often become huge expenditures. When you are already in credit card debt up to your eyeballs, these costs are all that much more troublesome. This year, skip the costly jaunts and daytrips and opt for something a little less expensive.

    Simple Saving Tip #1: Get crafty at home. If you are creative, this can be a great way to not only save a buck but also to get in some much needed family time. Check out websites for crafty ideas to keep the kids occupied (ones that involve things around the house rather than things your need to go out and buy).

    Simple Saving Tip #2: Check out free community events. Many communities plan and organize events for school-aged kids over the March break, so why not take advantage of them. Better yet, get together with a few other parents and organize a pick up and drop off schedule so that one parent doesn’t have to do everything and the kids can participate in a group. Libraries and arenas are often a safe bet.

    Simple Saving Tip #3: Skip the trip down south and opt for a day at an indoor waterpark. Pack up the kids and their swimsuits and head to the ‘beach.’ Even more savings can be had if you bring a picnic lunch, rather than shelling out major dough on fast food. Sure, you’ll be basking in the glow of artificial sunlight, but your wallet and the credit cards inside will thank you!

    Simple Saving Tip #4: Plan a movie or game day. Sure, vegging out on the couch may not be something you want to drill into your children’s heads, but the odd movie date never really hurt anyone. Pop your own popcorn or bake some cookies together for snacks and sit down on the couch to enjoy a flick. Or grab those dusty board games from the top shelf and get a little healthy competition flowing.

    Simple Saving Tip #5: Get some fresh air. Check out local hills and grab a toboggan for some fun in the snow. Take the family dog for a long hike through the forest. Take out the skates and head to the local outdoor rink. Bonus: exercise will make you feel better too!

    Just because it is March Break doesn’t mean you need to rack up that credit card debt. Use these simple money saving methods to keep kids entertained without breaking the bank.

    For more information about credit card debt, how to stop it from accumulating or how to deal with it, please contact DebtCare Canada today by calling 1 (888) 890-0888.

  • Rebuilding Credit Doesn’t Have to be Like Climbing Mount Everest

    Rebuilding CreditDebt, for many Canadians, is an everyday issue. But it isn’t only debt that can be problematic – even when you get rid of your debt! If debt has caused your credit score to plummet it might be time to think about getting it back in shape. There are a number of ways that you can work on rebuilding credit, but we thought we’d provide you with some of the best ways to do so.

    Here are some good strategies for rebuilding credit:

    • Keep balances low on all credit products. When you pay off a credit card, or pay it down significantly, keep it that way. However, if you can’t pay off a big chunk at least try to keep the balance low. The typical rule of thumb is no more than 65% of your total available credit. This shows that, although you have access to the credit, you are not relying on it, demonstrating that you are not necessarily living outside of your means.
    • Avoid applying for too much credit. When you apply for any type of credit product, this gets reported to your credit report, and when you continually apply for credit this negatively impacts your overall credit. This is because it looks as though you are a credit seeker – someone who can’t afford to live without credit, but also has a hard time qualifying for it. Try to limit the number of applications you submit, including those done by current creditors (ie. credit limit increases).
    • More than minimum payments. Minimum payments are mostly interest, so in an attempt to rebuild credit try to make more than the minimums, even if it is only a little more than what is required. This has the added benefit of helping you pay off the total balance faster.
    • Keep an eye on your credit report – but don’t go overboard. It is always smart to know what is going on with your credit report, so checking it periodically is a good idea. With that said, checking it every other week is largely unnecessary, and even though your own inquiries are reported to your credit report as ‘soft’ inquiries, they are still reported, and any activity can have an impact on your score. Resist the temptation to check on too regular a basis – perhaps limit it to quarter-annually.
    • Get a secured credit card. With a secured card you, as the cardholder, make a deposit onto the card and this becomes your limit. At the same time, you are required to make regular payments to the card (to pay off your ‘balance’), but if you default the money comes from that initial deposit. Keeping up the regular payments helps to rebuild credit as it shows positive credit activity.

    Rebuilding credit can take time, but it doesn’t have to be difficult. Don’t just assume that because your debt load has decreased, your score has increased significantly. Use these strategies to bring that score back up.

    For more about methods for rebuilding credit please contact DebtCare Canada today at 1 (888) 890-0888 or visit us online at www.debtcare.ca

  • Debt Relief 101: Refinance Your Mortgage to Consolidate Debt

    Consolidate DebtWhen your debt begins to climb at a rate that seems to be spiraling out of control, or if you are just tired of shelling out money without seeing totals decrease, it might be time to consider a different approach. Making minimum monthly payments is not actually going to get you out of debt – and realizing this, many Canadians have chosen to refinance their mortgages as a way to consolidate debt – but is this the right option for you?

    There are several reasons why refinancing your mortgage to consolidate debt can be a smart option. Firstly, because you are consolidating you are getting rid of that laundry list of monthly payments and consolidating them into one, tidy payment. This can make keeping track of payments far easier – and less stressful. Secondly, you can save huge on interest. If you are carrying a number of different credit products, all with varying interest rates, all applied at different periods, you are paying out far more than if you have one larger total at a single interest rate.

    With these major positives, there have to be some negatives, right? Well, as appealing an option as mortgage refinancing may be, its benefits are only open to those who qualify. What do we mean? Well, since mortgage refinancing requires upping the lending limit on your current mortgage, you have to actually have a mortgage to qualify (so renters are out). You can’t get a mortgage to consolidate debt, so unless you own your home, this option is not available.

    Another issue that many have when attempting to refinance is the fact that your credit needs to be great – but if you are maxed out or have missed payments, the lending institution isn’t necessarily going to have much faith in your ability to repay your debt. Yet another deals with the fact that stricter CMHC lending guidelines have decreased the total refinancing limit to 80% of a home’s value, so if your debt will put you over this threshold, a total consolidation is not feasible.

    So, is mortgage refinancing to consolidate debt the best option for you? Despite the downsides associated with qualifying, if you can secure funding it may very well be the most intelligent option. It is also better for your overall credit versus a consumer proposal or bankruptcy – so that is also very attractive.

    When you are considering the various options available to get out of debt, mortgage refinancing is one that should be on your list – just be prepared if your credit isn’t stellar or if there is no equity in your home.

    For more about mortgage refinancing to consolidate debt please contact DebtCare by calling 1 (888) 890-0888.

  • Get Out of Debt: Five Easy Steps to Get You Started

    We’ve all heard that myth that dreaming about your teeth falling out means you’re worried about money – but what if Mr. Sandman leaves you checking your teeth every single morning? If money is all you can think about, it might be time to make some changes. Want to get out of debt but just not sure where to start? We can help. Here are 5 tips to help get you started!

    1.     Create a budget and track spending. If you don’t know what you owe, or where your money is going, you can’t realistically make a plan to get out of debt. Inventory your debt totals, create a realistic budget and track your monthly spending in order to motivate and eliminate.

                           blog

    2.  Pay more than the minimums. When your credit card bill comes and your minimum payment required is $50, that doesn’t mean that $50 will be taken from your total owing. The majority of this total goes right to interest, so stop paying only the minimum on your credit cards and pump up those payments as much as you can!

    3.     Stop spending. Sure, this may seem like common sense, but unless you actually do it you are not fixing anything. Look back at that tracker and identify areas that could benefit from a slash. Or, if you can’t seem to resist temptation, get rid of that credit card, take it out of your wallet, or find another effective way to stop using it!

    blog 1

    4.     Get debt help. Worried that you can’t tackle your debt on your own? You don’t have to. Dealing with debt can be tough, so why not research and get in touch with a reputable, professional debt management firm. There you can get advice on debt relief or find out more about solutions to actually get rid of the money owed.

    5.     Stay focused. Don’t just say you are going to get out of debt – do it. Stay focused on the end goal, not on how tough it is to get there –most good things don’t come easy! Use your monthly tracker (and those decreasing numbers) as motivation!

    blog 2

    Get your debt under control and eliminate your financial stress with these tips. Take it one step at a time and that mountain will soon become a molehill!

    For more debt reduction tips please contact DebtCare Canada by calling 1 (888) 890-0888 or visit us online at www.debtcare.ca

  • Helping Out – Finding the Right Debt Management Firm

    Debt ManagementNo matter how you look at it, debt is never something that anyone wants to deal with – both having it and getting rid of it – but it is a reality for the majority of the population. That being said, some individuals are able to conquer their debt problems on their own, eliminating the stress that comes with it. However, for others, when debt becomes insurmountable, turning to a debt management firm is the smartest solution. But how do you know which firm you can trust?

    We have all heard the ads on the radio and seen the commercials about companies offering various debt reduction or debt elimination strategies – but not all of these are of the same ilk. Here is a list of characteristics to look for when researching the right debt management firm.

    Experience – When it comes to your money, it is never a good idea to just go with the first company you find. Make sure that the firm you choose to work with has the experience and reputation to back you up. Is it a new business, one taking advantage of higher than average Canadian consumer debt levels, or is it one that has years of professional experience under their belt? The choice should be obvious here.

    Options – Make sure that the company you choose to go with can offer you a number of different options for debt relief. A company that deals solely in bankruptcy is never the right choice. Make sure that your options are explained to you in a way that you understand, and that in the end the choice is left up to you. Ask questions and get the pros and cons (there are always both).

    Consultation – The right company should offer some form of consultation, and the best companies will offer this for free. If you call a company and a solution is set up for you without any consultation at all, chances are that company does not have your best interests at heart. Thoroughly working through your unique situation is the only way to reach a realistic and achievable solution, so make sure that this is offered.

    Code of Ethics – If the company you choose doesn’t have a code of ethics, you may not be as protected as you should be. Having a set standard to follow means that your information is protected, that you are getting fair and unbiased treatment, and that you are being given the tools to create an enduring plan for financial stability no matter the route you choose to take.

    Stop stressing about your debt and solve the problem. The right debt management firm can help you – just make sure that it is a reputable one with the experience to get the job done right!

    To find out about the debt management solutions available to you, from a firm that you can trust, please contact DebtCare Canada today by calling 1 (888) 890-0888.