debtcare.ca

Category: Dealing With Debt

  • Ontario Bankruptcy Trustees – Who They Are and How They Advertise!

    debt careDebt consolidation, get out of debt, debt relief: it is hard to turn on the radio or television these days and not hear one or all of these phrases. Why? Because so many Canadians are facing financial challenges thanks to the ease with which credit is granted coupled with high (credit card) interest. The temptation to pay on credit can quickly lead to getting in over your head, and then struggling to find a solution.

    When it comes down to it, the question is, who advertises these solutions and what do they do?
    Ontario bankruptcy trustees, more aggressively now than ever before, are advertising to the public that they offer the best solution for people facing financial woes. We disagree with much of the advertising we hear from many Ontario Bankruptcy Trustees. Why? Because we exist because of them!

    Ontario bankruptcy trustees promote financial solutions. However, if you choose the solutions offered, the Ontario bankruptcy trustee does not represent you. A bankruptcy trustee in Canada is a court appointed officer who administers estates when a bankruptcy or consumer proposal is filed. They do not represent you, they do not represent your creditors. They apply rules set out in the Bankruptcy and Insolvency Act. The trustee is required to represent the best interests of all parties (and this includes their own financial interests).

    What does this mean? Well, trustees are paid a tariff out of the proceeds of your bankruptcy or consumer proposal. In the case of bankruptcy the fee is fixed, whereas with a consumer proposal the fee grows with the amount of the proposal.

    Some things to know:
    • Trustees advertise to you, despite the fact that they don’t represent you – this is because without you, they have no business.
    • In the case of bankruptcy, finding surplus income means that they can extend your bankruptcy and collect larger tariffs because the bankruptcy is being administered for a longer period of time.
    • In the case of consumer proposals, convincing you to propose a higher amount to your creditors will result in the collection of more fees – and thus is a major priority for them.

    Now, of course a few bad apples shouldn’t spoil the whole bunch, and we don’t mean to say that all trustees are shady. Many trustees in bankruptcy are reputable and do business above board – but the few that don’t can do a lot of damage. There are just too many conflicts of interest and the law needs to go further in terms of requiring trustees to state in their advertising that while they are promoting a service they don’t represent you.

    A consumer proposal or bankruptcy is often a really good financial solution for someone backed into a corner. These allow for one monthly payment, can reduce debt, stop interest, and stop collections. Just keep in mind, just as you wouldn’t go to a meeting at the CRA without your accountant, you shouldn’t go to a trustee without your own independent financial representation.

    Financial counsellors who specialize in bankruptcy and proposals can structure the numbers, review your information, make recommendations, and bring a proposal forward to a trustee on your behalf- protecting you throughout the entire process.

    DebtCare Canada represents your best interests – yours and yours alone. Call us today BEFORE contacting a trustee: 1-888-890-0888.

  • The Last Loan

    the last loanWe wanted to write this blog because we often see patterns regarding triggers for serious financial problems and clear points in time where different choices could have changed the course of the problem. Sure, there are instances where a sudden occurrence, such as a job loss or divorce, can cause abrupt and unexpected financial turmoil, but more often than not people build their financial problem over time.

    This is evidenced by just about every news publication reporting that Canadians are carrying a dangerously high level of personal debt. Over time debt accumulates like a snowball.

    Example scenario:

    • It only takes using those credit cards too much one month to push you into a situation where you can’t pay in full and so you make a smaller payment.
    • Eventually you have a few cards with small balances so you decide to get a line of credit to consolidate them – only you keep using the cards once you’ve paid them off.
    • Finally you decide that enough is enough – you get a consolidation loan at the bank to pay the line of credit and the credit cards.
    • You go a couple of months without using the cards but then your transmission goes. You think, well, you will only use the card once, but this means the cycle starts again…
    • A year later, you have the consolidation loan and a balance on the line of credit and a couple of credit cards.
    • You have accumulated some equity in your property, so you decide to get a second mortgage to pay off all the debt one final time. You are successful in doing so.
    • However, in the end, just like with the last consolidation loan, a few months later you begin using your cards again and a year later you find yourself making a slew of minimum payments on your credit cards.

    Now you reach a pivotal point – another loan? We say no! Let your last loan be the last loan.

    Just as Einstein said, the definition of insanity is doing the same thing over and over again and expecting different results. If you continue to refinance and restructure your debt year over year, each year owing more, you will be caught in a cycle that is not going to break unless you win the lottery or get a major raise at work (and how likely is either one of these?).

    There comes a time when one must say “self, I need to get some professional help”. Just like you may go to a therapist for a personal problem or a lawyer for a legal problem, one who continues to struggle with accumulated debt also benefits from professional guidance.

    Stop the insanity! Maybe there is a quick fix and some help with budgeting is the answer, or perhaps you have really dug yourself into a hole and need some major intervention. Either way, you are going to need to do something very different to break the financial cycle you are in.

    If you would like to make your last loan your last loan and need financial guidance DebtCare Canada can help. Call us today 1-888-890-0888.

  • Tips for Dealing with Debt Over the Holiday Season

    Dealing with DebtThe holidays should be time to relax, enjoy time with family and friends, and eat far too much delicious food – but for far too many of us, this time of year is also accompanied by a biting anxiety when you think about the amount of money being spent. For those individuals with debt, holiday spending can be a major stress inducer – so we’ve developed a list of easy to implement tips to help with dealing with debt over the holidays.

    Tips for dealing with debt over the holidays:

    First off, set a holiday budget and keep track of what you spend. Establishing a budget is the best way to ensure that you don’t overspend. Have several people to buy for? Divide that budget into envelopes and take those with you when you shop – once an envelope is empty you are finished with that person.

    Start a Secret Santa tradition. Instead of buying for all of the adults in your family, draw names and set a budget and each person buys only for one person – this can seriously cut costs.

    Shop with a list. This can help curb over-spending if you stick to the list rather than buying everything that you see and think others will love.

    Shop early. You still have a few weeks before you have to give those gifts, so get started right now. This also helps to give you time to price match, ensuring everything you want is in stock. And when shopping early, take the time to look for sales and discounts.

    Get creative. If you have the time and the imagination you can save a ton of money by making gifts rather than buying them. Take advantage of Pinterest for great gift ideas that you can make yourself – you might even find some great ideas and suggestions on saving money in other ways.

    Remember: many of us start out with good intentions –buying everything with credits cards with the intention of paying these cards off as soon as the holidays are over – but this isn’t usually what happens and many individuals find themselves paying for their holiday spending months into the New Year. Don’t let the holidays = huge credit card debt.

    Dealing with debt during the holidays can be a challenge, especially if you are already struggling financially, but these tips may just help you keep things in perspective and stop you from going overboard.

    For more about dealing with debt, whether during the holidays or at any time during the year, please contact DebtCare Canada for tips that you can use any time: 1-888-890-0888.

  • Spring Cleaning Should Include Cleaning Up Your Finances

    Cleaning you your FinancesThe sun is shining and spring is in the air. Cars are lined up at carwashes and the parks are filled with people taking advantage of the warm weather. And, with the advent of spring comes the inevitable ‘spring clean’. From a financial perspective, the spring clean also represents the perfect opportunity to get your finances cleaned up.

    Still feeling weighed down by a financial boulder? You are not alone. Canadians everywhere are dealing with rising debt loads and relying on credit to pay for everything. If you are struggling with debt, it is time to take control and clean up your finances. We’ve compiled a list of ways to help you manage this spring clean.

    Financial Spring Clean Tip #1: Make a list. Sure this list won’t include things like washing all of the windows or cleaning out the garage, but it should include those financial goals you want to achieve in the coming months. It is easier to stick to something if you can physically tick things off of that list.

    Financial Spring Clean Tip #2: Create a budget. Sure this seems like a band-aid solution that many individuals attempt – but if you are serious about taking out the ‘debt’ trash, creating a realistic budget and sticking to it is crucial. A budget, one that takes into account every aspect of your monthly finances, can show you exactly where you need to sweep away some of that extra spending and where you can save.

    Financial Spring Clean Tip #3: Organize. Just as you would organize those closets or bins collecting miscellaneous junk, organize your debt. A great way to do this is to consolidate. Instead of having several different credit cards, loans, and lines of credit, consolidating debt merges all of these into one, neat, tidy monthly payment. The added bonus here is that this also reduces the amount of your monthly interest. So, just like purging your closet gets rid of those items collecting dust, consolidation gets rid of that extra financial burden.

    Financial Spring Clean Tip #4: Call in the professionals. Rather than attempting to tackle that mountain on your own, seek the guidance of someone that knows exactly how to help you get out of debt. A professional financial consultant can give you the advice you need and present the options that will help you get rid of your debt. Whether it be budgeting tips, a consumer proposal, or bankruptcy, a seasoned financial consultant, one with your best interest in mind, will get you on the right track to financial spring cleaning.

    Don’t let another year of debt build up. See spring as the perfect opportunity to get your finances under control and regain your financial independence.

    To get started on your financial spring cleaning and get rid of your debt for good, please contact DebtCare Canada online or call 888-890-0888.

  • Is the Big Bad Wolf Calling?

  • Debt Relief in Canada Blog Series Part 1 – Is a Consumer Proposal the Answer?

    Debt relief in Canada is a subject that is constantly in the news for many reasons, whether it is the government reporting on the fact that Canadians are carrying historically high levels of debt, reporting on debt reduction companies and what to watch out for, reporting on changes to CMHC lending guidelines to stop those who are loaded with debt from buying homes that they really can’t afford, and more…

    Unfortunately, most people who have too much debt don’t realize that they have a problem until managing minimum payments starts to become challenging, resulting in a debt problem turning into a debt emergency. There are many options for debt relief in Canada, but each one is different, and the right one for you will really depend on your own personal circumstances.

    Making a consumer proposal is one option for debt relief in Canada, but the question is: is a consumer proposal the answer?

    A consumer proposal is a type of proposal that is made to your creditors and is administered by a bankruptcy trustee who represents both you and the creditors that are included in your consumer proposal. Consumer proposals are crafted based on your ability to repay your debt realistically. Consumer proposals are repaid monthly, usually over a period of 3-4 years. With that being said, a consumer proposal can be paid off sooner if your financial situation changes. Consumer proposals are removed from your Equifax credit report 3 years from the date that they are paid in full, which provides a further incentive for those who are in a consumer proposal to pay it off early. Because consumer proposals allow you to make a single monthly payment that fits within your budget and enables you to rebuild your credit faster, consumer proposals are a very popular option for debt relief in Canada.

    Since consumer proposals are based on your ability to make a monthly payment and not on your total debt load, oftentimes consumers can reduce their overall debt through a consumer proposal. In a simple, very general example, if your total unsecured debt is $20000 and you can afford to pay $200 per/month for 5 years based on your budget and the consumer proposal guidelines, the total value of the consumer proposal would be $12000, meaning you would reduce your debt by $8000. Each case is different, and your consumer proposal must be fair to your creditors as they have a say as to whether or not they will accept it.

    When you make a consumer proposal, your creditors will receive your consumer proposal by mail and have 45 days to respond and vote as to whether they accept or reject your proposal. If a creditor does not respond to the consumer proposal within 45 days, they lose the ability to vote and the proposal is considered accepted. In addition, if the majority of your creditors accept the consumer proposal, it will be approved.

    Consumer proposals are suited to individuals who have higher incomes, as they are subject to surplus income in bankruptcy.  When a consumer has surplus income his or her payment in bankruptcy will be much higher and this is what makes a consumer proposal a more attractive option for a higher income earner. Consumer proposals are also better suited to an individual who has some secured creditors and to someone who has the ability to repay a good portion of his or her debt but simply cannot manage the contractual payments that they currently have with creditors.

    For more information about options for debt relief in Canada or to see if you qualify for a consumer proposal please call DebtCare at 416-903-4000 or visit www.debtcare.ca.

  • How to Get Tax Relief from Back Taxes

    Back taxes can be a nightmare and if you have back taxes, there is no doubt that you could use tax relief. Trying to get tax relief from the CRA directly is very difficult. There are financial programs available through DebtCare Canada to achieve tax relief on your back taxes. In this short video, Michael Goldenberg, president of DebtCare Canada, discusses how you can get tax relief from your back taxes. This is a must see!

    If you would like more information about how to get tax relief from your back taxes contact DebtCare at 416-907-2582 or visit www.debtcare.ca.

     

  • Taxpayer Relief in Canada – Do I Qualify

    If you have a tax problem in Canada, repercussions with the Canada Revenue Agency can be severe. If you filed your income taxes late or committed an infraction under the Canadian Income Tax Act, like failing to disclose income or writing off expenses that you weren’t entitled to, the Canada Revenue Agency has incredible power to punish you. By far the most common weapon that they use to punish you is your pocket book.

    When an income tax return is filed late and the CRA assesses what you owe, or a previously filed return is re-assessed and new monies are owed, the CRA will add interest and penalties to the amount of the tax debt that you owe. Often times, when an individual has a tax debt, the amount that they owe will double in size once the interest and penalties are calculated.

    Sometimes individuals have personal circumstances that led to their tax problem which is why taxpayer relief in Canada exists. Taxpayer relief in Canada is a formal program offered by the Canada Revenue Agency where the CRA can agree to cancel all or part of the interest and penalties. You can qualify under the Taxpayer relief program in Canada for one of the following reasons:

    A natural disaster like a fire or flood. For example, you misstated expenses resulting in an inaccurate return filing because your basement flooded and all of your receipts were destroyed

    1. Extreme financial hardship
    2. A documented personal issue like a medical problem or death in the family
    3. An error on the part of the CRA

    The only challenge with the Taxpayer relief program in Canada is that it is a long and complicated process and very few applications under this program are granted. To hire a professional to make an application under this program could cost you thousands. In addition, the CRA will not reduce the principal tax debt owed. The CRA does not offer any program that will reduce the principal tax debt that is owed.

    Before considering making an application under the Taxpayer relief program in Canada you may want to first look at the principal amount of the tax debt you owe and whether you can afford to pay it off at all. Often people who owe a large tax debt are not even in a position to pay it, regardless of whether or not they receive interest and penalty relief under the Taxpayer relief program in Canada.

    The longer you stretch out the time that you have a tax problem, the worse the tax problem will become. If the application under the Taxpayer relief program in Canada is denied, you will owe further interest that will have accumulated through the application period. The CRA will also continue to try to collect on the principal tax debt owed.

    There are other financial programs available that will freeze the interest on the tax debt that you owe and can even eliminate or reduce interest, penalties and the principal tax debt that you owe. These programs can also stop CRA collection action and provide you with immediate relief. These programs are not available through the Canada Revenue Agency, however you may access them through a financial consultant who works with people who have debt problems.

    For more information about the Taxpayer relief program in Canada or if you have a tax problem and need financial guidance or debt relief please visit www.debtcare.ca or call 416-907-2582.

  • What Does A Trustee Do?

    If you have financial problems and have thought about consulting a trustee in bankruptcy, you may be curious about the role that they play in helping you deal with your financial problems, and may be asking yourself “what does a trustee do anyway?”

    The first thing to know is that a trustee in bankruptcy does not represent you. You may have seen advertisements by trustees that make it seem as though they want to help you. What does a trustee do? Well, they are a court appointed officer that administers bankruptcies and consumer proposals. They have an obligation to act in the best interest of both you and your creditors.

    Let’s look at a bankruptcy as an example. When you visit a trustee to file for bankruptcy they review all of your household income, debt and other financial details and then advise you on what your monthly payment in bankruptcy will be. You make your monthly payment to the trustee in bankruptcy each month. If you have assets or surplus income for example, what does the trustee do? They will ensure that they collect equity in those assets or surplus income for the benefit of your creditors. They are not there to protect your income and assets, they are simply administrators of the bankruptcy process. If they can collect more money through your estate for your creditors, they will.

    Consumer proposals are also administered by trustees in bankruptcy. When you visit a bankruptcy trustee directly to discuss a consumer proposal, they will assess your income, debt, assets and other personal household and financial information. What does a trustee do next? They will suggest an amount of a consumer proposal that they believe will be accepted by your creditors. This does not always result in the best deal for you, and if you visit a trustee directly you will have little to no negotiating power because they are simply administering your consumer proposal, so what they present to you is what they will be prepared to go forward with. They are not there to get you the best deal.

    Do you do your taxes without the help of an accountant? Not likely. If you were charged with a crime would you defend yourself without a lawyer? Probably not. Dealing with a trustee in bankruptcy is no different; you should not do so unrepresented.

    Having independent financial representation when considering a consumer proposal or bankruptcy is crucial because it enables you to have your personal and financial information reviewed by a professional who represents and is hired by you and who understands bankruptcies and consumer proposals. They can vet your personal and financial information, identify any issues before a trustee is made aware of them, and help you come up with a proposal to present to the trustee that you can live with.

    Do not answer the question “what does a trustee do” the hard way. Filing a bankruptcy or consumer proposal is an official process. Once you have committed to either one of these processes there is no turning back, so it is important to do everything in your power to ensure that you enter into the process with all of the necessary information. The more informed you are, the better financial arrangements you will be able to make, which will save you thousands.

    If you have more questions about this article “What does a trustee do?” or if you need representation in a consumer proposal or a bankruptcy please visit www.debtcare.ca or call 416-907-2582.

  • Why You Should 100% Be Represented in a Consumer Proposal Canada!

    If there is one way to get out of debt it is through a Consumer Proposal Canada. Listen up! This is not a process you should go into unrepresented. Watch this short video by Michael Goldenberg, President of DebtCare Canada, where he discusses why going to a trustee directly for a consumer proposal can have big financial consequences. A Consumer Proposal (Canada) is a great idea if you have a financial problem, but there is a lot of information you need to know before doing so, and DebtCare Canada can help to educate and represent you through the process.

    If you would like more information about making a consumer proposal (Canada) contact DebtCare at 416-907-2582 or visit www.debtcare.ca.