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Tag: debt solutions

  • Holiday Spending Got You in a Crunch? Check Out These Credit Card Debt Solutions

    Credit Card Debt SolutionsHappy 2015 everyone! The holidays are wrapping up and that means that it is time to get back to reality, which, for most of us, means looking over those holiday bills that we’ve been attempting to avoid for the past month.  If holiday spending has you in a crunch, check out these credit card debt solutions to help get those finances back on track.

    • Stop using those cards! Right now. Take them out of your wallet, lock them away, and forget that you even have them. If most of your holiday spending was done on a credit card – whether as a way to gather points or just because it was more convenient than using your debit card – it is time to stop that trend.
    • If you can, pay off the balances in their entirety as soon as possible. If you are able to do so, avoid snowballing interest charges by paying off the totals at the bottom of that bill.
    • If you can’t pay off the balance in full, pay off as much as possible – try not to pay just the minimum payment required. This is mostly interest and won’t do anything as far as bringing that debt down.
    • More than one credit card? Try starting with the one with the highest interest rate and paying as much as possible each month. Then move on to the next one. Make sure that you continue to pay at least the minimum payment for every other card though – there is no point in paying off the one with the highest interest but letting the others go to collections!

    Finally ready to admit that the debt that has accumulated is not just a result of holiday spending, and thus may be a bit larger than you can comfortably or realistically get rid of with these tips? It might mean taking a different route to get to financial freedom. Debt consolidation, a consumer proposal or even bankruptcy may be the right option to help you get rid of that mountain of debt that has not only become stressful but has also begun to impact your personal or work relationships.

    DebtCare Canada has the experience and knowledge with debt solutions to help you get out of debt – whether it is holiday debt or all-year round debt. For more about the various options available to you please call us today for a free assessment at 1-888-890-0888.

  • Getting Back in The Black: Credit Card Debt

    Credit Card DebtCredit card debt – the giant elephant in the room that sometimes you don’t even want to acknowledge, let alone discuss with anyone else. We all know that sometimes it gets to the point that ignoring this monetary mountain seems like the only way to preserve your sanity – but if you’ve reached this point we urge you to reconsider! In this case, the phrase ignorance is bliss could never be more incorrect!!

    Here are some realistic credit card debt solutions that can help you get a handle on these financial obligations:

    • Pay the minimum monthly payment at the very least. Never ignore a credit card statement – this will quickly destroy your credit. If you can, pay a bit more than your minimum payment on each card. Since monthly minimum payments are mostly interest, paying just a bit more each month means you are actually paying off the balance.
    • Pay the card with the highest interest first. With interest rates as high as 29%, your monthly payments on credit cards are going to be almost all interest – meaning very little is actually being achieved as far as paying these cards off. A popular method for getting rid of credit card debt is to start with the card with the highest interest rate and pay as much as your budget will allow on top of the minimum payment, while still maintaining the minimum payments on your other cards. Once that card if paid off, start on the card with the next highest interest rate.

    Sure, these two suggestions are both great if possible – but if you can’t pay even the minimum, it might be time to think about some other options.

    • Apply for a debt consolidation loan. One of the reasons that credit card debt is so problematic is because of its high interest. If you have more than one credit card company hounding you for payments on a regular basis, why not consolidate all of those debts into one with a consolidation loan with a lower interest rate. Not only does this option reduce the amount that you are required to pay (meaning more is applied to the amount owing rather than just empty interest payments), it also keeps it contained with one convenient monthly payment.

    Can’t get a handle on your credit card debt and feel as though you are suffocating? Don’t let it become insurmountable. Get in touch with a debt solutions organization with the knowledge and expertise that can help you get a grip on this all too common financial problem.

    For more about strategies for dealing with credit card debt please call DebtCare Canada 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.

  • 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.

  • 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.

  • Why an Ontario Trustee in Bankruptcy May Not be the Best Choice

    Traditionally when people think of an Ontario trustee in bankruptcy they think of bankruptcy. The fact is that the Ontario trustee in bankruptcy has changed in recent years. In the past, if you had severe financial problems, you may have thought that bankruptcy was the only way out and so you would seek out an Ontario trustee in bankruptcy.

    So what has changed? In recent years, the bankruptcy laws have changed making it more difficult to file for bankruptcy and making consumer proposals a much more attractive option for people who struggle with debt. Also, Ontario trustees in bankruptcy have begun advertising much more aggressively. If you don’t know what an Ontario trustee in bankruptcy is then you may misunderstand this advertising and think that when you are calling you are going to have some other financial options. However, generally speaking, the only two programs that bankruptcy trustees offer are bankruptcies and consumer proposals.

    So what’s the big deal if you end up at an Ontario bankruptcy trustee’s office? Maybe a consumer proposal or bankruptcy was what you had in mind anyway. Going to an Ontario bankruptcy trustee may in fact be a big deal because if you buy into the debt solutions offered, a trustee does not in fact represent you and you alone through the process.

    An Ontario bankruptcy trustee has a responsibility to represent both you and your creditors. This means that if you want to file a bankruptcy or consumer proposal it is the trustee’s job to ensure that your creditors get a fair deal and that they are able to get as much money out of you as possible. Here is a really great example:

    1. Suzy goes to an Ontario trustee in bankruptcy and decides that bankruptcy is the only option for her. The Ontario trustee in bankruptcy asks Suzy to complete a long document where she has to provide detailed financial information.
    2. Suzy owns a home that she bought 5 years ago for $300,000 and assumes that it is worth about the same amount of money, so she indicates on the form that the home’s value is $300,000.
    3. The Ontario bankruptcy trustee allows her to file for bankruptcy based on the financial disclosure that Suzy has made.
    4. Based on this approval, Suzy is told what her monthly payment will be over a prescribed time period.
    5. The Ontario trustee in bankruptcy has a team inside his or her firm which reviews the bankrupt’s assets, and without provocation from creditors, the Ontario trustee in bankruptcy later deems that Suzy’s house is worth $400,000, not $300,000.
    6. The Ontario trustee in bankruptcy writes to Suzy and advises her that she owes thousands of dollars in surplus income that will have to be paid to her creditors or else the Ontario trustee in bankruptcy will oppose her discharge.

    Can you imagine how you would feel if this happened to you? Filing for bankruptcy or filing a consumer proposal unrepresented is much like being accused of a crime and defending yourself without representation. If you were being charged with a crime it would not be wise to go to court without a lawyer. Where an Ontario trustee in bankruptcy is concerned, it may not be a good choice to go to them directly without seeking independent financial advice. Instead, visit a financial consultant 1) to ensure that you have explored all of your financial options; 2) to ensure that you make complete disclosure and to determine your personal exposure so that nothing comes up later; and 3) to ensure that the best possible deal is negotiated with the Ontario trustee in bankruptcy.

    If you have a financial problem and need help, please contact DebtCare Canada at 888-890-0888 or visit www.debtcare.ca.

  • Credit Card Debt Relief Scams – Buyer Beware

    If you are drowning in credit card debt then there is no doubt you have been thinking about how you can get credit card debt relief. Fortunately for you there are more companies than ever before advertising credit card debt relief services, but it is very important to do your due diligence when choosing one if you want to avoid credit card debt relief scams.

    Here are some things that you should ask yourself in order to find a legitimate company:

    1.       Does the company have a website?

    2.       Is the company listed with Industry Canada?

    3.       Does the company have a bricks and mortar retail location?

    4.       Have past clients of the company made positive reviews about them?

    5.       Do the company and its employees have a presence online on sites like LinkedIn?

    If you want to avoid credit card debt relief scams, ask a lot of questions:

    1.       Does the company charge an upfront fee? If they do, this is a not a good sign. The company should be able to present you with financial options and advise you of the cost to participate in them. Only upon selecting a program should you pay any fee to the company.

    2.       Is the company going to hold the money you pay to them monthly and then disperse the money at a later date? Beware of credit card debt relief companies that collect money from you monthly on the premise that once it has accumulated, they will use it to settle your debt. You don’t know what could happen with the company in the future and this is risky business.

    3.       What will the impact be to your credit? Let’s be realistic – if you are behind making payments or know you will be soon, your credit has likely already taken a hit – or you should expect it to. Any debt solution that involves reducing your debt or freezing the interest will have a negative impact to your credit. A financial program that involves reducing your debt will cause you to pay off your debt much sooner so it really is short term gain for long term pain. Our point here is that the company that offers you debt relief should be open about the implications that different programs will have on your credit and have the ability to guide you through the process of rebuilding your credit.

    4.       Ask the company to be clear about their solution. Many companies will promote debt consolidation but there are different types of debt consolidation. Debt consolidation involves consolidating debts into a single monthly payment. Many credit card debt relief options achieve this but each is different. For example:

    a.       If a bank gives you a debt consolidation loan your creditors will be paid off in full. Pros: You can preserve your credit and your relationships with your creditors. Cons: You will pay interest on the debt and it will take a long time to pay off. Also, you must have good credit for this option.

    b.      You could refinance your mortgage to consolidate your debt. Pros: You can preserve your credit and your relationships with your creditors. Cons: You will pay interest on the debt and you will be stretching the debt out over your mortgage amortization.

    c.       If you go to credit counselling they will allow you to make a single monthly payment to them. Pros: Monthly payments are low. Cons: Damages credit, damages relationships with creditors, takes a really long time to pay off.

    d.      A consumer proposal also involves making a single monthly payment. Pros: Debt can be reduced, single monthly payment, stops collection action, interest is frozen. Cons: Damage to credit.

    e.      A bankruptcy will also result in a consolidated single monthly payment. Pros: Debt can be reduced, single monthly payment, stops collection action, interest is frozen. Cons: Damage to credit, ongoing reporting obligation to trustee, if financial situation improves payments could be increased.

    When looking for a company that offers debt solutions remember that if you do your research and ask a lot of questions you should be able to find a debt solution while avoiding credit card debt relief scams.

    For more information about credit card debt relief or if you need help with a financial problem please call DebtCare at 1-888-890-0888 or visit www.debtcare.ca.

  • What is a Trustee?

    What is a trustee? A trustee is a person who holds property, authority, or a position of trust or responsibility for the benefit of another. In the case of an “estate trustee” the trustee could be a company or an individual. An estate trustee in the case of an individual who dies or is incapacitated,  represents the deceased or the incapacitated individual.

    There are other types of trustees though in specific matters that have different responsibilities and are appointed by the government to administer an estate according to legislation.

    What is a trustee in bankruptcy? In Canada, a trustee in bankruptcy is an individual or a corporation licensed by the Superintendent of Bankruptcy to hold in trust and, subsequently, to distribute bankrupt’s property among the creditors in accordance with the Bankruptcy and Insolvency Act (BIA). The bankrupt and all other persons holding the bankrupt’s property must transfer the property to trustee until he or she can determined how the estate shall be administered. “Property” includes income and assets. The trustee may also assist individual in preparing and submitting a consumer proposal to creditors.

    Where an “estate” trustee would act to carry out the intent of the deceased or in the best interest of the incapacitated individual, a “bankruptcy” trustee acts in the best interest of the bankrupts creditors and it is his or her obligation to recover as much money from the estate as possible for the benefit of the creditors.

    In Canada, consumers and businesses often find themselves confused, pondering the question “what is a trustee?” and many get the impression that the trustee in bankruptcy represents their best interests. This is because so many trustees aggressively advertise to people who have financial problems. They do this because they aren’t profitable unless they have individuals and businesses approaching them to file for bankruptcy or to file consumer proposals. These advertisements often promote debt solutions, debt settlements and debt help. When you visit the trustee he or she will often only offer one of two choices: a bankruptcy or a consumer proposal. Inevitably the question is who does the “debt solution” benefit in the end?

    In the case of a bankruptcy the trustee is paid a “tariff” a “fee” from the proceeds of the bankrupt estate. In the case of a consumer proposal the trustee receives remuneration based on a percentage of the amount of the consumer proposal that he or she negotiates.

    When you visit the trustee he or she will require that you provide complete disclosure of your income and assets. If the trustee determines that a consumer proposal is the only legal remedy to your debt, he or she will then determine the amount of the consumer proposal based on your ability to make monthly payments over 4-5 years. For example, if you owe $20,000 and the trustee determines that you can afford to repay your creditors at 100 cents on the dollar, on a monthly basis over 5 years then the amount of the consumer proposal will be $20,000, 100% of the debt owed. If the bankruptcy trustee determined that you can only afford to repay $13,000 over 5 years then your consumer proposal would be 65% of the debt owed. The challenge is that the smaller the consumer proposal, the less remuneration to the trustee, which provides an incentive to the trustee to arrange larger proposals. In addition and as we mentioned earlier the trustee is required by law to secure the greatest amount of repayment possible for the benefit of your creditors.

    It is for this reason that approaching a trustee directly to discuss your debt can be a risky proposition. In the past 5 years, this has spawned new industry: debt consulting. Debt consultants are familiar with the BIA and are able to evaluate your estate to help you determine which option is right for you and they can even negotiate on your behalf with bankruptcy trustees.

    This provides the insolvent person or debtor with a number of benefits.

    1.      Because the debt consultant is hired by the debtor, he or she represents the debtor`s best interests, not the creditors.

    2.      The debt consultant can interpret financial information and often negotiate a better deal than the consumer or business would have achieved had they visited the trustee directly.

    3.      The debt consultant can request evaluations of assets like homes and vehicles to ensure that the trustee does not over-estimate an asset resulting in you paying more in a consumer proposal or bankruptcy.

    4.      The debt consultant can work with you to come up with a financial plan to rebuild your credit and finances after a bankruptcy or a proposal.

    A bankruptcy or proposal offers many benefits and can provide a person who has a financial problem with immediate debt relief, including stopping collection action like a wage garnishment. Like anything else, researching a solution to a financial problem is truly “buyer beware” and if you are considering an avenue for debt relief like a bankruptcy or consumer proposal, we do not recommend that you do so unrepresented.

    For more information about a trustee in bankruptcy or if you are struggling with a financial problem please visit www.debtcare.ca or contact Michael Goldenberg at DebtCare Canada by calling 416 907-2582 for more information.