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Tag: consumer proposals

  • Things You Need to Know About Licensed Insolvency Trustees

    Fact: Consumer proposals and bankruptcies are two legal debt settlement options available through the Bankruptcy and Insolvency Act. Both processes can only be administered by a Licensed Insolvency Trustee (LIT). That being said, you do not have to go directly to a Licensed Insolvency Trustee for a consumer proposal or bankruptcy. In fact, you are better served with your own representation.

    This week, our aim is to clear up some of the confusion regarding Licensed Insolvency Trustees and how they work.

    When you’re struggling financially, are finding it difficult to make your monthly payments, or have missed several payments, there are numerous options that exist to help you regain control. Two of those options are a consumer proposal and bankruptcy.

    As mentioned, both must be administered by a Licensed Insolvency Trustee. However, the problem here is that, while LITs claim neutrality – they say they represent both parties (you and the creditor) – they have an obligation to maximize the return for the creditor.

    Does this make sense? Compare it to real estate. If you were buying a new home, would you want the same real estate agent representing you and the person selling their home to you? Since that agent is paid on commission, their goal would be to get as much money from you, the buyer, as possible. How can this result in a fair settlement?

    It is much the same with a consumer proposal, as the amount a Licensed Insolvency Trustee is paid depends on the amount of the proposal agreed upon. So, in a nutshell, the higher the proposal, and thus the more you have to pay, the more the LIT earns. So, if the LIT is getting paid according to the amount of the proposal, what is there to motivate them to get as small a proposal as possible.

    If you’re financially strapped, every cent counts. If you go directly to a Licensed Insolvency Trustee, you can’t be guaranteed the best deal. That can only be obtained through your own representation, someone who is hired by you to protect your money.

    Furthermore, if you go directly to a Licensed Insolvency Trustee you may only be given the option of a consumer proposal or bankruptcy, even if there are more valuable solutions out there, such as mortgage refinancing or even just a strict budgeting plan.

    At DebtCare, our goal is to get the best deal for you. We are here to protect you and only you. Want valuable advice and real protection?

    Call us today at 1 (888) 890-0888.

     

  • Paying Off OSAP: Student Loans, Consumer Proposals and You

    When you’ve studied tirelessly and spent years working towards that well-earned degree or diploma, the last thing you want to think about once you graduate is the debt that accumulated in your quest to obtain it. Unfortunately, student loans are unique in their formation, particularly OSAP loans, and so today we attempt to clear the waters. Today we’re talking student loans, consumer proposals, and how you can finally get yourself back on stable financial ground.

    As you’re no doubt aware, depending on the years spent in post-secondary academia and the amount of funding you borrowed in order to get that coveted piece of paper, student loan debts can become quite large. Typically, when you’re studying, and thus paying interest only, or, in the case of an OSAP loan, nothing at all, the debt may not seem like a big deal. However, once you graduate and are required to start paying it back, with interest, things can become very challenging, very quickly.

    A consumer proposal has become a very valuable resource for those looking for relief from debt that has grown to overwhelming proportions. Consumer proposals are great because, in addition to stopping interest and combining the various payments into one manageable monthly payment, a proposal typically results in an overall reduction of your total debt. However, there are certain things you need to know with regard to OSAP loans and consumer proposals.

    First things first: the only way to clear an OSAP loan if you have not been out of school for 7 years is to pay it in full. If that 7 year period has not passed yet, a consumer proposal (CP) won’t result in a reduction of that debt, and once the CP is over you’ll still be required to pay it. That being said, even if it isn’t reduced, a portion of your proposal payment will go to the OSAP loan in addition to your other creditors.

    On that note, if you are facing enforcement action as a result of the OSAP loan, a consumer proposal will stop it, even if you have not been out of school for 7 years. This is an important consideration if your wages are being garnished or your bank account has been frozen.

    On the other hand, if an OSAP loan is over 7 years old – meaning you’ve been out of school for 7+ years – you can include it in a consumer proposal. This means, in addition to the other debts you’ve accumulated, the overall OSAP loan will likely be reduced.

    So, to summarize, if collection action has commenced prior to the 7 year date, a consumer proposal will stop all enforcement action. You will be required to pay the loan in full, but you will have some relief, especially when your other creditors are included in the proposal. If you’ve been out of school for more than 7 years, you can include it as you would any other debt.

    At DebtCare, we know how difficult it can be to deal with student loans. Often a consumer proposal represents your greatest opportunity for relief. Want to discuss your options?

    Please get in touch with us today by calling 1 (888) 890-0888.

     

  • Going Debt Free: Consumer Proposals in 1-2-3

    A consumer proposal is a legal avenue for dealing with debt. Over the last few years, this has become a very popular option for Canadians looking to deal with financial challenges. Today, in an effort to help you better understand this option, we get back to the basics with consumer proposals. Read on to learn more.

    Firstly, what exactly is a consumer proposal? It starts with a proposal to your creditors based on an amount that you can reasonably pay back. This amount is based on a trustee’s assessment of your financial information.

    The majority of your creditors must accept the proposal, and proposals have a very high success rate if structured properly. If accepted, you then begin to make single, monthly payments to a trustee for a term of 4-5 years. As soon as the proposal is filed, any enforcement action against you will be stopped, interest stops and often the proposal will involve you repaying less money to your creditors than the total debt initially owed.

    While the term of the proposal may be 4-5 years, the consumer proposal can actually be paid in full at any time. This is a great benefit. Over time, many individuals experience financial positioning changes and once paid in full the consumer proposal will be removed from your credit in 3 years which means that you can rebuild quickly. This is important, as a consumer proposal will negatively impact your credit. However, if you’ve decided that a proposal is the best course of action to deal with your debts, your credit has likely already taken a hit.

    Who can administer a consumer proposal? Only a trustee in bankruptcy has the ability to file a consumer proposal. That being said, while it must be administered by a trustee, most people negotiate their consumer proposals through an independent financial consultant. Why? Because in a proposal the trustee represents both you and your creditors – so their role is to get your creditors as much money as possible in the proposal. Seems like a bit of a conflict of interest, no? We agree, especially because the trustee makes a percentage of whatever the settlement is – the more you pay, the more the trustee gets paid. That’s why we suggest seeking out your own independent advice before speaking with a trustee.

    At DebtCare, we can offer the advice you need to best protect yourself in a consumer proposal. Have questions or want to find out more about the benefits or get started?

    Call us today at 1-888-890-0888.

     

  • Making a Proposal, and We Don’t Mean for Marriage: Consumer Proposals

    Consumer ProposalsWhen debt becomes unmanageable, knowing where to turn can be tough. Knowing the options available to deal with that debt can be difficult – and that is why getting outside advice is often a great idea. One of the most popular options right now, one that requires additional assistance, is a consumer proposal.

    New to this concept but wondering what a consumer proposal is all about? A consumer proposal is a legally binding agreement between you and your creditors.

    Consumer proposals have grown in popularity over the last few years, and for good reason. There are a number of significant benefits to filing a consumer proposal:

    • Provides immediate relief from collectors – stops the calls and the letters.
    • Will stop interest accumulating from the date that you file.
    • Will stop most wage garnishments or frozen bank accounts.
    • May decrease the total amount of your debts.

    Process:

    1. Assessment and Qualification – a meeting with a debt consultant will assess your current financial situation and determine the best route to take. If you qualify, the paperwork can be started.
    2. Repayment Terms – based on your monthly income and current debts, a repayment plan will be established that you can afford and that will please your creditors.
    3. Filing the Documents – your licensed proposal administrator will file all of the required documents. This includes submitting the consumer proposal to your creditors.
    4. Creditors Vote – once the documents are received by your creditors, they have 45 days to vote to accept or reject the proposal. If the vote is 25% or more to reject, a meeting will be held to try and negotiate. Once accepted, you will be required to make the monthly payments to your administrator to be distributed to your creditors.
    5. Completed Proposal – once you’ve completed the consumer proposal you will receive a Certificate of Full Completion as proof of the completed proposal. Typically, after three years following completion, the consumer proposal will be removed from your credit report.

    What if you can’t keep up with the payments?

    If an unforeseen circumstance makes fulfilling payment arrangements impossible (job loss for example), the first thing to do is call your administrator. By law you can miss or defer two payments without consequence, but after that the proposal will be cancelled. At the first sign of trouble, speak with your administrator to find out your options.

    Consumer proposals can offer individuals the chance to start fresh and eliminate financial stress in a major way. If you believe that a consumer proposal might be an answer to your debt problems, don’t wait. The process can take time, so it is best to get it started right away.

    For more information about consumer proposals and the many benefits of filing one please call DebtCare Canada today at 1-888-890-0888.

  • Personal Financial Improvement: How to Rebuild Credit in 3 Simple Steps

    How To Rebuild CreditGetting into debt is often very easy, and when that debt gets out of control it can be much harder to get out. The consequences of debt, especially when those debt responsibilities are not being met, can be devastating. Getting financing for a car, obtaining mortgage financing, or even being approved for a small loan for incidentals can be extremely difficult, and so getting out of debt is critical if you want to have a secure financial future. And, not only do you need to know how to get out of debt, you will then need to know how to rebuild credit.

    How can debt impact your credit? Missed or late payments, too much credit, too many credit checks and credit going to collections all work towards bringing your credit score down. Your credit report also reflects any credit activity and so any lending institutions can easily gauge credit behaviour based on this reporting. Many debt solutions, such as consumer proposals or bankruptcies can also harm your credit, but if it has gotten to the point that these debt solutions are where you turn for help, they can actually be the first step in how to rebuild credit.

    How to rebuild credit: Step 1. Recognize that you may have a financial problem. If you are at the point where you are living paycheque to paycheque and have accumulated so much debt that you are only making minimum monthly payments – even if you make those payments on time – you have a financial problem. Making minimum payments on credit cards barely covers interest and so the debt will never be paid off. If you can’t manage minimum monthly payments, you have a financial problem. If you rely on your credit or payday loans to make ends meet – even if you are honouring your repayment terms – you have a financial problem.

    How to rebuild credit: Step 2. As noted, the best way to start rebuilding your credit is to get rid of your debt. A professional debt management company is the smartest way to do this as they will be able to offer you the guidance and help that you need to get those debts paid off. Debt consolidation, a consumer proposal, bankruptcy or a debt settlement might be the answer – it all depends on your current financial situation.

    How to rebuild credit: Step 3. Once you have paid off/settled all of your debts, you need to attempt to establish your credit once more in order to repair it. A great way to do this is with a secured credit card. With a secured credit card, you offer a cash collateral and the lending institution will take that money and it becomes your credit limit. You then use the credit card as you would any other – and make sure to make regular payments, never just the minimum. Also, stay away from payday/cash advance loans. These do not report to your credit report and can start a vicious borrowing cycle that can be hard to get out of.

    Rome wasn’t built in a day, and rebuilding your credit won’t be either. It takes time, but knowing where to start is the first step.

    For more information about how to rebuild credit, or to find out about possible debt solutions, please contact DebtCare Canada today by calling 1-800-890-0888.

  • Getting Out of Debt Blog Series #4: Debt Settlement

    Getting Out of Debt

    With the average consumer debt load in Canada at an all-time high, it is unfortunately not surprising to see companies popping up everywhere offering solutions to your debt problems through a debt settlement. But be wary; unlike consumer proposals, bankruptcies and debt consolidations, debt settlements, depending on the company, can sometimes come with more negatives than positives. This 4th blog in our ‘getting out of debt blog series’ looks at the debt settlement, giving you the information you need to help you make the right decision about solutions to your debt problems.

    What is a debt settlement? A debt settlement is just that – the settlement of your debts. This settlement involves a negotiation with your creditors to reduce the amount of the debt you are required to pay off.

    A debt settlement will in almost all cases involve paying the settlement amount in a single instance. In most cases the collection agency representing your creditor can accept less money from you than you owe to settle your debt. We have seen collection agencies settle debt for as little as 50% of the amount that was owed. That being said, regardless of whether it is the collection agency or a creditor that is willing to consider a debt settlement, they will want to receive the settlement money in full.

    Often consumers won’t have the money to pay the settlement in full. This has spawned an entire industry of debt reduction companies. These companies will accept monthly installments from you over time with the promise that once you have remitted enough money they will settle your debts. This is a risky proposition. Instead, do your due diligence because if you are remitting to a debt reduction company and they go out of business in the future your money may not be secured.

    There are several reputable companies out there that offer financial consulting and can help you to settle debt with your creditors without risk to you. These companies, experienced with consumer debt solutions, will represent you fairly and help you establish a plan to settle your debts without you giving money to them on a monthly basis.

    Avoid being taken advantage of by doing research and avoiding companies who bill themselves as debt reduction specialists or companies. Look for positive reviews from consumers and see how much of an online image they have established to ensure that you are working with a professional organization that has staying power.

    How will a debt settlement affect your credit? As with any debt solution, a debt settlement is recorded on your credit report and may bring down your score. That being said, if you are considering debt settlement the impact on your credit rating is likely no worse than the damage already done. Once you have settled your past bad debt you can begin the process of rebuilding.

    If you are considering a debt settlement as a way of getting rid of your debt, there are a number of things to consider, but the most important is the company itself. Just because a company promises to settle your debts it doesn’t mean that they will do so the right way. Make sure that you do your research and make inquiries. Working with a trustworthy debt settlement company will make all the difference, keeping you protected throughout the process.

    If you need help getting out of debt or would like to find out more about your debt settlement options, please contact DebtCare Canada today by calling 1-800-890-0888.

  • Summer Debt Relief: Tips to Reduce Your Debt

    Debt ReliefOver the summer many families find that debt rises with the temperatures; vacations, weekends away, daily outings, etc. can all leave the wallet feeling very light. If you entered the summer drowning in debt, the worst thing that you can do over the summer is add to that. Instead, use this time to make some financial changes and reduce you debt rather than continuing to build it up. Here are our summer debt relief tips to help you regain control of your finances.

    Debt relief tip #1: Go over your finances and set a budget. Look at how much you spend every month on bills and see where you can save. And be realistic. Don’t deny yourself every luxury – you won’t be able to stick to it. For example, if you eat out 5 nights a week, don’t cut this out altogether, you are bound to cave in at some point. Instead try and limit these treats to once a week, or even once every 2 weeks.

    Debt relief tip #2: Avoid making only minimum monthly payments. Most of your monthly payment is just interest, very little of the principle balance being paid off as a result. Check out your monthly statement – most will give you a timeline showing when your balance will be paid off if only monthly payments are made – this might shock you – and hopefully motivate you to reduce your debt!

    Debt relief tip #3: Contact your creditors and see if they can offer a lower interest rate, especially if you have received offers from other companies offering an interest free period and free transfer (just be sure that you can pay off the balance before the interest free period is up). This option though is often only good for those with good credit – if your credit is less than stellar or if you routinely miss payments, there isn’t much motivation for your creditors to reward you with a lower interest rate.

    Debt relief tip #4: Seek the help of a professional. Once you get deep into debt, it can seem impossible to climb back out. But it is possible. If you have tried to reduce your debt but just can’t seem to make any progress, it might be time to call in the professionals, ones with experience helping Canadians get debt relief. Debt consolidation, consumer proposals or bankruptcy are all viable options to reduce your debt, and can all end up significantly reducing the amount of debt you currently carry.

    Don’t let summer spending get away from you. Instead, try to reduce your debt instead of increasing it with these tips and others. For more tips about debt relief and how to reduce your debt over the summer, please contact DebtCare by calling 1-800-890-0888 or visiting www.debtcare.ca.

  • Collection Agency Harassment: How to Stop the Calls

    collection agency harassmentCanadians have become so accustomed to carrying debt, and for some being in debt has become the norm. It is true that the vast majority of Canadians do have debt and when debt accumulates to the point where you are defaulting on monthly payments, the debt you have can be the source of considerable stress. This is especially true if your creditor has sent your debt to a collection company resulting in collection agency harassment!

    Collection agency harassment comes in many forms, but the most common is phone calls demanding payment for uncollected funds. These calls can come during the day, in the evening, on the weekends – when you are at home and at work. If you have been receiving these calls, or are nervous that they may begin in the very near future, it is best not to avoid the issue. The calls are not going to stop just because you don’t answer the phone – if anything they will increase in frequency. The collection agency may also pursue other methods to make contact with you that can be the source of embarrassment.

    In provinces like Ontario collection agencies are regulated by the appropriate ministry. In Ontario that ministry is the Ministry of Consumer Services (MCS). Reading your province’s legislation that deals with the regulation of collection agencies is your first step towards stopping collection agency harassment. If an agent called you at a time he or she wasn’t supposed to or disclosed information about you or your debt to a third party such as a family member or co-worker, you may file a complaint with the government to stop the collection agency harassment.

    Formulate a plan to deal with the debt. It won’t go away by itself and as long as it sits in collections it will accumulate very high interest, can be damaging to your credit and the collection agency will continue to pursue you. Speak with a financial consultant who has experience stopping collection agency harassment for help and also to learn about programs that can help you deal with the root problem – the debt itself.

    There are several very effective forms of debt relief in Canada, most common among them are debt settlements, consumer proposals, debt consolidation, mortgage refinancing and bankruptcy. All of these approaches have different benefits. While a consumer proposal can reduce your debt and freeze interest, it can also impact your credit in the short-run. While mortgage refinancing will enable you to rebuild credit faster, you will have to pay closing costs and interest to use your home equity to consolidate your debt. Only a skilled financial consultant can help you to review your options and help you choose the one that will best help you achieve your personal financial goals.

    If you are facing collection agency harassment it might be time to get the ball rolling and seek out debt relief from a professional organization experienced in dealing with collection agencies and helping individuals get rid of their debt. Get control of your debt – don’t let your debt control you!

    For more information about debt relief to stop collection agency harassment please contact DebtCare Canada today by calling 1-800-890-0888.

  • Can You Really Trust An Ontario Bankruptcy Trustee

    Ontario Bankruptcy TrusteeBefore you can determine if you can trust an Ontario bankruptcy trustee, you first have to understand what an Ontario bankruptcy trustee is and what his or her role in a bankruptcy or consumer proposal is.

    An Ontario bankruptcy trustee is an individual or a corporation that is licensed by the Superintendent of Bankruptcy. Bankruptcy trustees are regulated federally. The role of an Ontario bankruptcy trustee is to administer bankruptcies and proposals, administer the estates of the bankrupts, hold in trust and subsequently distribute the assets of the bankrupt. The bankruptcy trustee must follow the Bankruptcy and Insolvency Act (BIA).

    The bankruptcy trustee is to be impartial and act in the best interests of both the bankrupt and the creditors. The same is true whether you are filing a consumer proposal or a bankruptcy. In the case of a bankruptcy, the bankruptcy trustee can oppose your discharge if you have not fulfilled your obligations under the bankruptcy. These obligations can change over the course of your bankruptcy and/or as a result of undisclosed information at the time you filed for bankruptcy. In layman’s terms, if you incorrectly estimate the value of an asset, forget to tell the trustee that you have a particular asset or in the middle of your bankruptcy you get a better job, this may change your monthly payment in bankruptcy and the length of time you are bankrupt – the bankruptcy trustee will make this determination.

    In the case of a consumer proposal you don’t have an ongoing obligation to the bankruptcy trustee like you do in a bankruptcy. With that said, the bankruptcy trustee assesses the proposal they will offer your creditors based on extracting maximum value for your creditors.

    So the answer to the question “can you trust an Ontario bankruptcy trustee” is yes. They are a licensed, regulated officer of the court. However, now that you know the role a trustee plays in a bankruptcy or consumer proposal, it may not be wise to approach him or her directly, no matter how warm and fuzzy the advertising is.

    Consumer proposals and bankruptcies are good options for getting out of debt and starting off on a fresh footing, but before jumping to this conclusion it is important to consider all of your financial options. Working with a qualified financial consultant that is experienced working with debt consolidation, mortgages, debt settlements, consumer proposals and bankruptcies will make you aware of these options. A financial consultant who is hired by you to represent your financial interests will ensure that you can be open and honest about all of your finances, ask questions that won’t impact you and assess a host of different financial choices. He or she can also line you up with the appropriate professionals (this includes bankruptcy trustees if necessary) and represent you through the process. This takes the burden off of you and ensures that you walk away with the best possible deal. In the case of a consumer proposal you could save thousands of dollars.

    If you are struggling with a financial problem and would like to review your financial options contact DebtCare Canada at 888-890-0888 or visit www.debtcare.ca.

  • How to Check Your Credit Score?

    In Canada, a credit Check Your Credit Scorereport and credit score is used by many different institutions, including banks, credit agencies, and even employers. These documents contain important information about your borrowing and repayment habits, and provide a detailed account of your past financial history. Even though these reports are so important, many Canadians are not familiar with the process of requesting and understanding the credit score.

    Understanding your credit score is important for a number of reasons. One of the most important is because, whenever you apply for credit, be it a mortgage, automotive financing, or a credit card, your credit report is pulled by the lending institution and assessed. In order to qualify, you must meet certain qualifications with regard to the report, and so knowing where you stand is crucial.

    What if your credit score is less than stellar? Too much credit, being too close to your limits or too many late or missed payments can severely reduce your credit score.

    In order to bring the score up, it might be prudent to speak with a financial debt consultant to discuss some options to reduce your debt and regain those lost credit points. Debt consolidation or consumer proposals are great options to help you get rid of your debt.

    So, do you know how to check your credit score and credit report? Here is some important information that will help.

    Requesting your credit score is actually quite simple. There are a few different credit reporting agencies in Canada, but the most popular are TransUnion and Equifax. Both of these agencies provide online copies of your credit report and credit score for a fee – simply visit the website, enter in some identity confirming information, and you will be able to print your credit report and credit score.

    Another reason that it is important to understand how to check your credit score and credit report is to make sure that everything it contains is accurate. Credit reporting agencies can make mistakes when compiling the information, and if something is reported incorrectly this can harm your overall credit. It is important to check your report regularly in order to find any mistakes and remedy them. That being said, when a mistake is brought to the attention of a credit reporting agency you may find yourself frustrated by the amount of back and forth that takes place. If you find yourself having a hard time dealing with those credit reporting agencies and their unwillingness to accept responsibility or fix the incorrect data, contact a financial consultant who can help get the issue resolved.

    If you want more information about how to check your credit score and how to understand your credit report, please contact DebtCare Canada by calling 888-890-0888 or visit www.debtcare.ca.