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  • It’s a Matter of Life and Debt: Understanding Debt for Young Adults

    Though nobody should aim to be in excessive debt, managing marginal debts helps people to establish credit. Another word for credit in this context is trust. You build trust with creditors by managing any outstanding debts you owe. By building this trust with creditors, you gain access to larger lines of credit. This is how credit is supposed to function in a perfect world.

     

    However, circumstances arise that quickly dispel the myth of a perfect financial world. Maybe you get rear-ended and need to shell out $1,000 for repairs. Or, perhaps, you fall and break your wrist. There will always be emergencies and hidden expenses. Sometimes these hidden expenses compound. You can use credit cards to cover these expenses, but it soon becomes a slippery slope of ever-mounting debt that becomes harder and harder to navigate.

    You Need A Separate Emergency Fund

    Just like a savings account for retirement or vacation, you need an emergency savings fund. Don’t rely on credit cards to bail you out of a medical expense or an emergency home repair. Or, at least, mitigate the costs partially by using an emergency fund to help cover the costs. Like any savings account, make contributions every paycheck or monthly. It’s essential to have some extra funds to fall back on. Credit cards are like the witch’s apple of solutions to an emergency. They might cover the initial expense, but now you are on the hook for interest, which can severely increase the total amount owed depending upon the interest rate.

    APR Madness

    For example, let’s say you need to make emergency home repairs, and the bill is $3,500. You have a credit card that you keep for small items like groceries that you pay off monthly to build credit. It has a max credit line of $5,000 with an interest rate of 16.8% APR (which was the average in 2020).

     

    That increases your total amount owed to $4,095 on a bill that could have been $3,500 if you had an emergency savings fund. Unfavourable interest rates are what make credit cards pernicious. That’s why if you find yourself in debt, you need to —

    Prioritize Credit Card Debts First, Other Debts Second

    Or rather, prioritize the debt that has the highest interest rates, which — let’s face it — are often credit cards. Then move on to other debts that may not have such high-interest rates. Tax debts or different types of loans fall into this category.

     

    Eliminating credit card debt is not easy at first, but there is light at the end of the tunnel with the proper guidance. There are companies out there that can help you to restructure or consolidate your debts without having to hire a bankruptcy attorney, or declare bankruptcy.

     

    It can seem overwhelming, but —

    There Is a Way Out of Debt

    Unfortunately, on average, most Canadians carry higher debt loads than even our neighbours down south in the USA. If you are feeling overwhelmed by ever-mounting debt, contact DebtCare Canada. Consultations are free, and there are no harm is learning your options.

     

    Take the next step toward debt relief.

    About the Author

    Veronica Baxter is a writer at Assignyourwriter, blogger, and legal assistant operating out of the greater Philadelphia area.

  • Descubra cuál es el mejor método de consolidación de deuda para usted[Calculadora de deuda]

    Descubra cuál es el mejor método de consolidación de deuda para usted[Calculadora de deuda]

    Descubra cuál es el mejor método de consolidación de deuda para usted[Calculadora de deuda]

    ¿Cuál es el mejor método de consolidación de deuda para usted?

    Puede pensar que sabe la respuesta o no tener idea. ¡Cualquiera esta bien!

    Pero si quiere salir de sus deudas para siempre, es hora de poner la pregunta a prueba.

    Ingrese a nuestra nueva herramienta, la calculadora de pago de deudas online.

    ¡Con esta herramienta, puede calcular rápida y fácilmente cómo puede salir de la deuda en cinco años o menos!

    Todo lo que tiene que hacer es ingresar su deuda total (excluidas las hipotecas), luego la calculadora hará su trabajo.

    Le mostrará cuánto le costará pagar su deuda durante cinco años, en comparación con el método de consolidación de deuda, y cuánto sería el pago mensual de la deuda.

    Por ejemplo, si tiene una deuda de $ 100,000, sus opciones podrían ser:

    • No haga nada: esto le costaría $ 158,963.30 durante cinco años con un pago mensual de $ 2,649.39 por mes.
    • Consolidación de deuda: esto le costaría $ 133,466.69 durante cinco años con un pago mensual de $ 2,224.44 por mes.
    • Asesoramiento crediticio: esto le costaría $ 110,000 durante cinco años con un pago mensual de $ 1,833.33 por mes.
    • Una solución DebtCare: esto le costaría $ 30,000 durante cinco años con un pago mensual de $ 500 por mes.

    ¡Pruébelo usted mismo! Accede a la calculadora de deuda aquí.

    * Esta calculadora es solo para fines de demostración. Los resultados variarán según sus circunstancias específicas, que incluyen sus ingresos y cualquier activo. Se requiere un mínimo de $ 6,000 de deuda no garantizada.

    Si tiene alguna pregunta o desea tomar medidas para liberarse definitivamente de sus deudas, comuníquese con DebtCare Canada hoy mismo por teléfono al 1-877-296-0871 o pruebe nuestra evaluación online en https://debtcare.ca/form. html. Podemos ayudarlo a pagar su deuda y comenzar de nuevo.

     

  • CRA Se Vuelven Más Agresivos En Su Manera de Cobrar.

    La Agencia de Ingresos de Canadá (CRA) siempre ha tenido una reputación de comportamiento de cobranza estricto y agresivo. Cuando se debe dinero, los agentes harán todo lo posible por recuperarlo. Esto generalmente resulta en un estrés extremo sobre el contribuyente y la acción de cumplimiento que puede causar estragos en su estabilidad financiera. Lo que es peor, esas tácticas parecen ser cada vez más agresivas. Si tienes duedas de impuestos  de la CRA, sigue leyendo.

     

    Cuando recibe una evaluación, quizás su pensamiento inicial es llamar y hablar directamente con la CRA. Cuando intente negociar con la CRA directamente, incluso antes de que hablen con usted, le pedirán que complete un formulario de divulgación financiera; este es un formulario muy peligroso. Querrán revelar todo, desde su cuenta bancaria a su empleador, a activos e ingresos y gastos. Es posible que ya tengan parte de esta información o que tengan los recursos para obtenerla, pero siempre es más fácil preguntarle.

     

    Recuerde, el objetivo de todos y cada uno de los agentes es obtener lo que se debe, lo antes posible. No están interesados ​​en negociar un acuerdo de pago largo y prolongado. Quizás asuma que permitirán un cronograma realista basado en sus ingresos. Ah, lo harán, pero se basará únicamente en sus ingresos: no se considerarán los requisitos para otros acreedores y su deuda con la CRA se convertirá en la máxima prioridad. Una vez que esto haya sucedido, tendrá pocos recursos. Dado que ha divulgado toda su información, donde realiza operaciones bancarias, trabaja, vive, etc., pueden iniciar acciones de ejecución contra usted. Esto puede incluir una cuenta bancaria congelada, embargo de salario, incluso un gravamen en su hogar. A diferencia de otros acreedores, no se necesita una orden judicial para la acción de cumplimiento de la CRA, y una vez impuesta puede ser muy difícil de eliminar.  Nuestro mejor consejo es este: si ha recibido un aviso de evaluación / reevaluación informándole de una deuda tributaria, no vaya directamente a la CRA. Debe considerar hablar con un especialista financiero para conocer todas las opciones disponibles para deshacerse de la deuda antes de que la CRA llame.

     

    Si la CRA ya ha tomado medidas de cumplimiento, existen programas del gobierno federal que pueden proteger su cuenta bancaria e ingresos. Hablar con un especialista financiero, nuevamente, es el mejor enfoque aquí. Podemos ayudarlo a aprovechar esos programas y deshacerse de la deuda tributaria de una vez por todas.

     

    Protégete a ti mismo y a tus bienes. En DebtCare, podemos ayudarlo a deshacerse de una deuda tributaria CRA y ayudarlo a mantener su equilibrio financiero. Llama a Zula al 1-877-296-0871.

     

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  • April Showers Bring May CRA Tax Debt… April 30 is the Income Tax Deadline

    The 2018 Canadian income tax deadline is almost here. On April 30, 2019, all personal taxes must be filed for the 2018 tax year. If you miss this deadline, you will officially be a late filer in the eyes of the Canada Revenue Agency (CRA).

    When you file taxes late, and you owe a balance, not only will you still have to pay the principal tax debt, but you’ll also have to cover interest and penalties. These additional costs can add up quickly.

    In 2019, here’s what you could end up owing:

    Interest

    • The CRA charges compound daily interest starting May 1, 2019, on any unpaid amounts owing for 2018. This includes any balance owing if the CRA reassesses your return. In addition, the CRA will charge you interest on the penalties starting the day after your filing due date. The rate of interest the CRA charges can change every three months.
    • If you have amounts owing from previous years, the CRA will continue to charge compound daily interest on those amounts. Payments you make are first applied to amounts owing from previous years.

    Late-Filing Penalty

    • If you owe tax for 2018 and you file your return for 2018 after the due date of April 30, 2019, the CRA will charge you a late-filing penalty of 5% of your 2018 balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months.
    • If the CRA charged a late-filing penalty on your return for 2015, 2016, or 2017, your late-filing penalty for 2018 may be 10% of your 2018 balance owing, plus 2% of your 2018 balance owing for each full month your return is late, to a maximum of 20 months.

    Repeated Failure to Report Income Penalty

    • If you failed to report an amount on your return for 2018 and you also failed to report an amount on your return for 2015, 2016, or 2017, you may have to pay a federal and provincial or territorial repeated failure to report income penalty.
    • If you did not report an amount of income of $500 or more for a tax year, it will be considered a failure to report income.
    • The federal and provincial or territorial penalties are each equal to the lesser of:

                 – 10% of the amount you failed to report on your return for 2018;  

                 – 50% of the difference between the understated tax (and/or  overstated credits) related to the amount you failed to report and the amount of tax withheld related to the amount you failed to report.

    If you owe a tax debt that you won’t be able to pay, the right answer is to file anyway.

    Once you are filed and have your assessment, you’ll need to deal with the tax debt. This is also best to do before the April 30, 2019 deadline.

    If you can’t pay, get in contact with a debt consultant that has a CRA-specific program. For example, at DebtCare Canada, we have access to one of the only programs in Canada that can resolve a CRA back tax problem. We also have other financial solutions, like debt consolidation, home equity financing, and insolvency filing options.

    It can’t be reiterated enough — do not miss the Canadian tax deadline.

    For a refresher, here are the 2019 filing dates:

    • April 30, 2019: filing deadline for personal income tax.
    • June 17, 2019: self-employed or sole proprietor tax filing deadline.*

    *A note for those who are self-employed: while technically the filing due date for sole proprietors isn’t until June 17, the CRA will begin charging interest on any amounts owing on May 1, 2019. Therefore, it is also in your best interest to file before April 30, 2019.

    Have questions about filing or dealing with a tax debt? DebtCare Canada is here to help.

    Contact us today for a free consultation. Call 1-888-890-0888 or visit www.debtcare.ca.

  • The Challenges of Dealing with Debt Through a Divorce

    In Canada, divorce is one of the biggest causes of debt, and debt is one of the biggest causes of divorce. No matter how you look at it, financial strain wreaks havoc on your life in a number of different ways. When you separate, and go from a 2 income household to a 1 income household, it can become incredibly difficult to navigate this change in your financial situation. Maintaining a hold on your current debtload, meeting minimum payments, even establishing and sticking to a realistic budget can be really tough. Check out this video of DebtCare’s own Pam Shimmerman, our financial restructuring specialist. With a legal background, Pam has helped countless individuals deal with the debt that comes from divorce.

    One of the best things that you can do once a divorce is initiated is to take a detailed look at your household income and expenses, as well as your current debt load and future financial goals. Working through these items with a financial specialist can help ensure stability and can help you to achieve your financial goals. If you are in the midst of a divorce and would like some help dealing with the financial repercussions, please contact Pam for a free consultation. You don’t have to do it alone. Please call 1-888-890-0888 or email Pam directly at pshimmerman@debtcare.ca.

  • Canada Revenue Agency Collections Authority and How to Stop Them

    Thousands of Canadians owe money to the Canada Revenue Agency. Thousands more will fall behind filing their tax returns, hoping that by not filing their returns they can buy time to come up with a way to pay the tax that they know they will owe.

    What many people don’t realize is that whether you file or not, the Canada Revenue Agency can still take collection action against you if they believe you owe them money. Whether you file or not, the CRA could have tax slips on file, filed by others who have paid you and based on that can notionally assess you, make their own determination as far as how much income they believe that you earned and then take enforcement action accordingly. In fact, the Canada Revenue Agency can even proceed with enforcement action against you without notionally assessing you. The Canada Revenue Agency collections agents will often leverage enforcement actions to force you to file or comply with whatever information they are requesting from you.

    The size of an individual’s tax debt will in many cases be the result of his or her conduct. An individual who files his or her returns late, fails to declare income and has his or her returns re-assessed or audited will be subject to Canada Revenue Agency interest and penalties. This can, in many cases, double and even triple the size of the tax debt depending on the individual’s record with the Canada Revenue Agency. Each time a taxpayer is not compliant the Canada Revenue Agency records the non-compliance and the next time there is an infraction, the penalties are increased. Interest charged on Canada Revenue Agency debt is high and compounds daily.

    Once the Canada Revenue Agency collections department has decided to target you, they are able to deploy enforcement measures that can cause personal embarrassment and financial hardship. The most common enforcement measures deployed against individuals by Canada Revenue Agency collections agents are wage garnishments (50% of gross employment income and up to 100% of secondary income), property liens and using a document called a “Requirement to Pay” to freeze bank and investment accounts. Where businesses are concerned, the Canada Revenue Agency collections agents will commonly freeze bank accounts but also send notices to the businesses’ clients directing them to forward payment of all invoices to the Canada Revenue Agency. This is very similar to a wage garnishment, only instead of the Canada Revenue Agency collecting 50% of your income in this case, they can collect 100%. This measure forces many businesses out of business.

    If you owe money to the Canada Revenue Agency and can pay, great! But, what happens if you owe money to the Canada Revenue Agency and can’t pay?

    Consumers and businesses also have avenues that they can take to potentially reduce the amount of money that they owe to the Canada Revenue Agency. Programs like the Voluntary Disclosure Program enable Canadians to voluntarily declare income with the potential to avoid interest and penalties. Relief provisions enable clients who have a medical problem, financial hardship or have faced some other extraordinary circumstances to file an application to have some or all of the interest and penalties associated with a tax debt cancelled.

    The Canada Revenue Agency will not allow a consumer to directly propose a settlement on a tax debt. With that said, a consumer or business can stop Canada Revenue Agency collections action through Federal Government programs. When a consumer participates in a Federal Government program, the CRA in most cases will immediately cease collection action. Federal Government programs under the BIA are the only way that a consumer can reduce a principal tax debt and get a fresh start.

    Whether you owe a tax debt, think you will in the future or if you think that you cannot pay, you are best advised to seek professional help before the Canada Revenue Agency collections department begins to take action on your file.

    For more information about Canada Revenue Agency collections and how you can stop them please call DebtCare at 416-907-2582 or visit www.debtcare.ca.

  • Dealing with Debt Part 3 – Divorce Debt in Canada

    Canada has the 8th highest divorce rate in the world. Human Resources Development Canada has reported that the proportion of marriages expected to end in divorce has fluctuated between 35% and 42% in recent years. In 2008, 40.7% of marriages were expected to end in divorce before the 30th wedding anniversary. In 2008, there were 70,226 divorces in Canada or 2.11 divorces per 1,000 people.

    Divorce debt in Canada is also very common. Human Resources Development Canada also reported that in 2008, 115,789 Canadians were unable to repay their debts. Serious financial difficulties brought them to file either a consumer proposal or a bankruptcy. Individuals who were divorced or separated were more likely to file a proposal or bankruptcy.

    Why is divorce debt one of the leading causes on bankruptcy in Canada? The answer is fairly simple. First, two income households will often accumulate debt based on their “household ability to pay the debt”. The challenge with this is that debt is accumulated based on two people sharing living expenses and when people separate, living expenses will double because now each party has to pay for rent or a mortgage, and living expenses separately. When household debt is present this can make it challenging to pay it.

    Second, some marriages will involve one person working and one person raising the family. When divorce occurs, the party who hasn’t worked will likely have little to no income but be faced with the immediate expense of having to hire a lawyer and also live. In many cases this forces the party who has been home raising the family back into the workforce. Individuals who have been out of the workforce for a long time often have to re-enter the workforce in junior or entry level positions.

    Third, sometimes one party in a marriage may carry all of the debt in his or her name. Much of the debt may have been used by the other spouse. There is nothing worse than getting a divorce and then finding yourself having to pay your spouse’s debt.

    Legal protections may result in the party who has the weaker financial positioning receiving support payments, being awarded the house, having the other party take responsibility for the debt, but this can take years. Also, the legal fees that compound over the course of a divorce may end up being more than the debt you owed to begin with.

    So how can someone in Canada who has divorce debt keep his or her head above water without filing for bankruptcy? Fortunately, if you are in this situation there is a solution and believe me you are not alone. There are financial programs for people dealing with debt and specifically dealing with divorce debt in Canada. These programs will often enable you to make a satisfactory arrangement with your creditors and will enable you to consolidate your debt payments into a single reduced monthly payment. These programs can be found through debt consultants who specialize in divorce debt in Canada.

    It is important if you are dealing with divorce debt to make responsible decisions that protect yourself and your family and also consider both your short term circumstances and long term goals.

    For more information about dealing with debt or to get help with divorce debt in Canada please visit www.debtcare.ca or call 416-907-2582.

  • Dealing with Debt Part 2 – Gambling Debt in Canada

    Gambling debt in Canada is an epidemic not unlike the Flu. If you have a gambling debt in Canada, don’t get down on yourself. Addiction is an illness and gambling is something that is highly addictive. Casinos are more accessible than ever in Canada and the euphoria that is felt when you win can cause what would seem like harmless entertainment to turn into a serious life altering addiction.

    Many people realize that they have a problem when gambling habits lead to disruption in major parts of their lives. Financially, problem gambling can lead to a loss of income, potential loss of assets, lowered standard of living, or even a loss of employment. Personally, problem gambling can cause conflict with loved ones, and can lead to alienation from family and friends.

    Problem gambling can also impact your health. You can experience a number of health effects, including high blood pressure, digestive problems, stress and anxiety, depression and suicidal thoughts.

    CTV News recently reported on a study from Statistics Canada that showed that wealthier people, on average, spend more money on wagering, but gamblers who have less money spend a larger percentage of their income on gaming activities.

    According to the CTV report, Statistics Canada says that 6.3 percent of people are thought to be “at risk gamblers and problem gamblers.” Problem gamblers make up 0.6 percent of the Canadian population which is roughly 180,000 people. The Statistics Canada definition of a problem gambler is someone who has experienced negative consequences of gaming and who gambles more than five times a year.

    People who gamble responsibly:

    ·         Do so for entertainment rather than income.

    ·         Balance their participation with other activities.

    ·         Do not gamble alone.

    ·         Accept losses as the cost of the entertainment.

    ·         Set a realistic budget and stick to it.

    ·         Don’t borrow money to gamble.

    ·         Set a time limit for gambling.

    ·         Take breaks from gambling.

    If you have gone into debt in order to gamble you have a problem and you have to stand up against it. You are truly putting yourself in a position where you could lose everything, if it hasn’t happened already. There is a lot of support for people who have gambling debt in Canada. This support assists gamblers to deal with their addictions and the debt that they have accumulated as a result of the addiction.

    Some steps that you can take are to join a support group like Gamblers Anonymous, consider excluding yourself from gambling using the Responsible Gaming Commissions self-exclusion tool and seek professional financial guidance immediately. Do not transfer assets in the names of loved ones or borrow more money on top of the money you may already owe. There are many financial programs available that help gamblers who are dealing with a gambling debt in Canada and you can access these programs though debt consultants who are skilled at dealing with situations like the one you may be in now.

    If you are dealing with debt because of gambling you are not alone! Tens of thousands of Canadians are in your shoes and there is hope.

  • Dealing with Debt Part 1 – Collections Debt in Canada

    Many people have collections debt in Canada. Collection agencies are routinely hired by private businesses to collect money from individuals who have defaulted. When a company assigns an account to a collection agency, the collection agency will add their fees and additional interest to the debt which will cause the debt to grow at a rapid pace.

    Some collection agencies will use tactics, like calling you several times daily at home and work to collect money from you, while others may have been authorized by your creditor to take Small Claims Court action against you. Collection agencies can also file a “collection item” on your credit report which will do considerable harm to your credit; however if you have defaulted on a loan or credit card, the damage to your credit may have already been done. Any way you look at it, dealing with collections debt in Canada is no fun.

    Conventional debts like loans and credit card balances are not the only types of debt that get assigned to collection agencies. If you default on a debt to a utility provider, default on a phone bill, gym membership, toll bill, traffic fines all of these are examples of debt that may be assigned to collection agencies to be collected.

    The good news is collection agencies in Canada are regulated in most Provinces. This means you have rights! In Ontario for example, the Ministry of Consumer Services regulates collection agencies through the administration of the “Collection Agencies Act”. You can view the Ontario Collection Agencies Act on the E-Laws website. If a collections debt in Canada has occurred and a collection agency is getting out of hand, you can complain to the Provincial Ministry that regulates it. Some Provinces will receive online complaints (as is the case in Ontario) while others will require that you mail them a letter and include evidence to support your complaint.

    If you have a collections debt in Canada it is likely because you are dealing poorly with debt. Rather than facing collection action, it is better to come up with a solution to deal with your debt and there are solutions available. There are a number of programs available that help people to deal with their debt and stop collection action. Dealing with debt can cause stress and strain to relationships and many people think that the only way to get out of debt is through personal bankruptcy. This is not the case. There are other solutions to dealing with debt that involve freezing the interest accumulating on your debt and also reducing the principal amount of debt that you owe.

    When you are dealing with debt the worst thing to do is ignore it. This will only prolong the length of time that your credit is damaged and the debt will not go away but will only continue to grow over time. The faster you deal with your debt, the faster you can work towards rebuilding your credit and finances and put the period in your life where your debt got out of control behind you.

    For more information about dealing with debt and collections debt in Canada please visit www.debtcare.ca or call 416-907-2582.