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  • Debt Relief: Creating a Weekly Financial Checklist

    Debt ReliefWe can all use a little help sometimes, and when it comes to financial planning, some of us are more likely than others to need that helping hand. If you are struggling with debt and need some debt relief, there are countless ways that this can be done – but sometimes it starts with a little push at home. Thinking about debt relief and actually finding it are often two different things, and so it is helpful just to have a starting point.

    Here is that starting point. Use this debt relief weekly financial checklist for September and see just how much you can accomplish on your own! Take some time at the beginning of each week and work through these points.

    First week of September: Sit down and create a budget. Include all of your monthly expenses (and we mean all) and all of your monthly income. Make a chart that will help you better determine where your extra cash is going, and think about the best ways to bring that expense number down. Set out jars with cash for each category of expense and live strictly on cash for the month, setting aside the amount that meets your expenses, but on a budget.

    Second week of September: Check your credit report. When you start to pay off debt and subsequently rebuild your credit, one of the most important things that you can do is check your current credit status. This is actually something that you should do a few times a year, not only to see where you stand credit-wise, but also to ensure that all information contained within your credit report is accurate. If it is not, you need to deal with discrepancies immediately.

    Third week of September: Devise a long-term plan to pay off your debt. If most of your debt is in the form of credit cards, think about paying off the one with the highest interest rate first – after all, it is the one that is actually costing you the most money.

    Fourth week of September: Go back to that chart created at the beginning of the month and see how well you were able to stick to it. Take any money accumulated from leftovers in the jars and put it right onto your debt. Give yourself a pat on the back, and get ready for next month!

    If your leftover cash wasn’t what you had hoped, or following the budget was just a bit too difficult, it might be time to head to a professional for some help. DebtCare has you covered. Call us today at 1-888-890-0888.

  • Fast Cash = Big Problems: The Notorious Payday Loan

    Payday LoanIt seems as though payday loans are becoming alarmingly more prevalent for many individuals looking for a quick financial fix. But borrower beware: if you are considering a payday loan to help with some upcoming bills, or to make a big-budget purchase, you might want to think again.

    There has been a great deal in the news lately, and for good reason, regarding the actual borrowing consequences for payday loans. Sure, $100 for $20, as their advertisements typically claim, may sound like an okay deal, but in the long term, these loans are far too often much more costly than they initially appear to be. Payday lenders are actually quite infamous for their sky-high interest rates, thus their propensity for sending borrowers into a self-destructive cycle of debt that can be incredibly hard to get out of.

    Here is an example of why: It is the end of the month, and payday is not for another week, but you find yourself strapped for cash with a few bills still outstanding and no way to cover them. Looking for some fast cash, you head to a payday loan centre and leave with $1000 in about 15 minutes, after agreeing to terms of $20/$100 (so about $200 to cover the entire loan). Time goes by, and everything seems good at the end of the month, but then you realize you are on the hook for that cash. If you were strapped last month, the chances are quite high that things will be the same again this month. That means re-borrowing the money, and again paying that $200, and again being on the hook at the end of the month.

    See the problem? The cycle is one that far too many people find themselves stuck in repeatedly, and without additional funds, can’t get out of. If you have been considering just how attractive these easy-to-get loans seem to be, you might also want to seriously consider, firstly, why they are so easy to get, and secondly, what the long term impacts are if you are not 100% certain you’ll be able to pay them back in a short period of time.

    So what are your options if you are already stuck in the revolving payday loan of your nightmares? Well, you have a few options. If a payday loan is just one of your financial worries, and is more like the proverbial cherry on top of your rotten debt sundae, you might think about the benefits of a consumer proposal or bankruptcy. And, since a payday loan is a form of unsecured debt, it is often included in a bankruptcy or consumer proposal.

    For more about how bad payday loans actually are, or for other debt help, DebtCare Canada is here to help you. Contact us today by calling 1-888-890-0888.

  • Say Goodbye to Credit Card Debt

    Credit Card DebtWith Canada’s consumer debt continuing to rise, although at a slower rate, it is no surprise when individuals come to us looking for credit card debt relief. The ease with which credit card companies extend credit, even to those with less than stellar credit, and with credit limits far exceeding what is necessary, it can be really easy to get in over your head relatively quickly. And with all of that spending, at month’s end, or a few months down the road, you might find yourself in the common position of wondering how you are ever going to pay down those debts!

    Because they carry such high interest rates, and because the balance is revolving (meaning once you have paid off a portion, that credit becomes available again), credit cards are often the most difficult types of debt to pay off. But there is always hope. Start by paying more than the minimum payment each month, as much as you can. The minimum payment is typically little more than interest, and therefore not much is actually going onto the principal.

    Don’t have enough extra each month to pay that much more than the minimum on more than one card? One of the best ways to deal with this situation is to start with the card with the highest interest rate and pay as much as possible. Since this card is costing you the most, work harder at paying it off. Once it is paid off, move to the one with the next highest rate.

    So how can you cut down that monthly spending in order to find the cash to add to each month’s payment and cut down your credit card debt? What about taking advantage of these useful, but all too often ignored, money saving strategies:

    –        Have a yard sale – you have all of that stuff lying around anyways – why not get rid of it and make some money in the process.

    –        Save your change – when you empty your pockets, instead of using that money tomorrow, put it in a jar and save it up – you might be surprised how fast it actually grows.

    –        Make your own lunch and brew your own coffee – sure, this might mean a bit of extra time and effort, but just think about the fact that that $2 a day coffee habit is actually costing you $40 a month!

    –        Coupon clip – check the flyers, look online, and search for deals in store. Again, this might take a bit of extra time but the savings in your pocket can actually be well worth it!

    –        Visit the library – don’t think that the theatre or overpriced bookstore are your only options for entertainment. Your local library probably has a great selection that is largely underused – and free!!

    –        Plan your meals and groceries in advance – buying everything at once lets you take advantage of bulk buys, and can mean useful ways to stretch the budget and the food.

    Credit card debt can be a nightmare to deal with, but with the right support and guidance it is possible to pay it off. DebtCare can help. Call us today at 1-888-890-0888.

  • Know the Difference: Secured Versus Unsecured Debt

    IUnsecured Debtn the world of finance, there are so many different types of debt that it can be really tough to wrap your head around those differences. Furthermore, when you find yourself struggling to make the minimum payments or trying diligently to get out of debt those subtle differences can be easy to ignore. In an effort to help you make some sense of those differences, we thought we’d take the time to explain two of the most common types, secured and unsecured debt, and what those differences mean to you.

    Secured Debt: When a debt is secured, this means that an asset has been used as collateral when borrowing the money. This gives the lender more security and reduces his/her risk against default. When you take out a secured debt, but fail to make payments on it, the lender then has a recourse to secure the money owed (usually that means selling that asset to recover the losses).

    For most people, the largest secured loan is a mortgage. When you take out a mortgage, this loan is secured by the house itself. However, there are several other types of common secured debts, including car loans or loans secured by investments (i.e. property).

    In bankruptcy, most secured loans are not released, meaning they are not covered by the bankruptcy contract, and thus if you claim bankruptcy these are not included in the term or payments.

    Unsecured Debt: When a debt is unsecured, this typically means that there is no security behind a loan, and thus the lender runs a higher risk of not recovering their money if you default on a loan. Since there is more risk, this usually means that the interest rate on unsecured debt is significantly higher than secured debt.

    There are several types of unsecured debt, but the most common is credit card debt. Other types include student loans, payday loans, or other bills (i.e. utilities).

    Unlike a secured debt where your creditor can just use the collateral to recoup their losses, with unsecured debt this is not an option. However, they may use other avenues, such as a collection agency, garnishing your wages, or placing a lien on your assets until you have paid off the debt.

    In bankruptcy, these are the types of debts that are included, and thus wiped out in exchange for a monthly payment in bankruptcy.

    When you are in debt, it usually makes sense to pay off more of those secured debts first because there is often more to lose if you default on these. However, when looking to make larger than minimum payments, start with the unsecured debts because they often carry much higher interest rates.

    For more about secured vs. unsecured debt, and how to prioritize when trying to get out of debt, please contact DebtCare Canada today by calling 1-888-890-0888.

  • Globe and Mail: Why Teaching Your Teens to Stay Debt Free Matters

    Stay Debt FreeWith an often unstable job market, and huge tuition rates, it has become a trend over the last few decades for kids to rely more on their parents financially than ever before. Gone are the days of kids turning 18 and leaving the house (and your wallet debt free) for good. Longer stays at home after high school or returning to the nest after post-secondary has become more common these days, and parents are really starting to feel the financial pressure.

    According to a recent Globe and Mail article, “Plan to Retire? You May Need to Pay Your Gen Y Kids’ Debts First,” the trends with regard to financial dependence are quite startling, and parents are finding themselves dealing with not only their own debt, but that of their adult children as well. And those children are admitting to having come to expect it.

    How parents are helping:

    • Pay off their student loans: 37 per cent of poll participants said their parents had done this, or that they expected this.
    • Pay their bills: This is happening with 42 per cent of 20- to 24-year-olds, 28 per cent of 25- to 29-year-olds and 17 per cent of 30- to 33-year-olds.
    • Buy a home: One in four said parents have helped with a down payment, or will.

    Savings, in the past, that were accumulated after the kids had flown the coop, usually from the mid-50s to retirement, used to sustain parents through the retirement years. Now however, in an effort to assist their children, those saving years (and the savings themselves) are dwindling, leaving very little amassed at the end.

    Living debt free has become a far less common way of life, especially for the younger generations, and parents finding themselves saddled with bills that are not their own can become disheartened very quickly.

    For more about debt free solutions, either for yourself or your children, as well as saving and spending tips that won’t leave you calculating desperately in the end, please contact DebtCare Canada today by calling 1-888-890-0888.

  • Take Action to Get Out of Debt: Tips and Tricks

    Get Out of DebtDebt free: a highly attractive yet increasingly unattainable lifestyle for the average Canadian. No matter how you slice it, consumer debt has become a major problem for many individuals, and whether as a result of job loss, divorce, student debt, or just overzealous spending, many now find themselves trying to dig themselves out of a fair-sized financial hole that often seems more like a bottomless pit.

    Ok, wait. We are not just going to saddle you with negatives and not offer some useful advice. We are, after all, here to help. So, with that in mind, here is a realistic list of tips to help you get back on the road to financial freedom.

    1. Make a monthly budget. We absolutely cannot stress this enough. It is the best, really the only, place to start when it comes to ways to get out of debt. Once you realize how much you take in each month, and compare it to how much you spend, you will actually have a better idea where your money is going, and how you can decrease certain amounts. And be realistic – don’t attempt to cut out all spending – no one can do that.
    2. Stick to that budget. Become a savvy shopper and curb needless spending whenever and wherever possible. Look for sales whenever possible and take advantage of money saving incentives.
    3. Stop paying just the minimum payments. Take any money saved thanks to your new budget and put it all on those debts. Since most minimum payments on credit cards are interest, making the minimum payment really is making the minimum payment. Give as much as you can to those creditors.
    4. Work on those high interest credit cards. When you are overwhelmed with credit card debt and trying to decide which debts to eliminate first, always take a look at interest. If one card is 15% interest and another is 25%, think about how much money you are contributing to the principal and how much is just empty interest.
    5. Seek out some debt help. Once you have tried to implement the above changes, but feel as though you are still left in a precarious financial position, it might be time to seek some professional assistance. An organization that can offer you various options to get out of debt might be your best solution.

    Stop struggling and start swimming above water. It can often seem impossible to get out of debt if you are drowning, so start with these 5 tips and see just how far diligence can take you.

    For more tips or for help getting out of debt please contact DebtCare today by calling 1-888-890-0888.

  • Wallet-Friendly Summer Fun Ideas – Don’t Get Caught Drowning in Debt

    drowning in debtAny parent knows that once school is out, the kids are itching for some fun outside of the classroom. For many, this means summer camps or family vacations, but if you are drowning in debt, the thought of shelling out all that extra dough just to keep the kids entertained may be a bit more daunting than you’d like. With that in mind, check out this list of wallet-friendly summer fun ideas to keep your little ones out of your hair and out of your wallet.

    1. Go to the beach – pack a picnic lunch, grab some towels and some water toys and head out for a day in the sun. Just don’t forget the sunscreen.
    2. Spend a day at the library – just because the kids are out of the classroom doesn’t mean they can’t read for pleasure. Head to the local library and get the kids signed up for a library card. Let them pick out their own book or spend some time on the computer.
    3. Craft day – tie-dyed t-shirts, homemade play-dough, a kite they can fly in the backyard. Check out Pinterest for some great ideas that don’t require a lot of payout.
    4. Berry picking and jam making – not only can you get them out of the house and out of doors, this can be a great way to get some preserving done for the coming months.
    5. Gardening – head to the garden centre and let the kids pick out a plant or two, then head back home and set out a separate space in the garden that they can design all on their own.
    6. Drive-in movies – check out the local drive-in theatre and get great bang for your buck. Take advantage of the outing and bring dinner and snacks with you to save on treats. Go for a walk around or spend some time at the park. And once they are tired out, take advantage of the peace and quiet and sit back and relax and enjoy the movie.
    7. Camp out – set up a tent in the backyard, light a bonfire, and get the ghost stories ready. The close proximity to a private bathroom is just an added bonus!
    8. Take a hike – fill your backpack with bug spray, a few bottles of water and some trail-mix and head to the local nature area. Keep kids’ minds going by creating a scavenger hunt so they can play along the way.
    9. Set up a lemonade stand – not only will this motivate the kids to get out there, letting them make some money, but it teaches them about working and can help you teach them about finances.
    10. Help out – contact local charities in your area and find out if you can help out. Spending the day at an animal shelter or at the community garden is a great way to teach kids about giving back and it doesn’t cost you anything more than your time.

    Summer spending doesn’t have to cost an arm and a leg. Get creative, and keep that money in your wallet!

    If you feel like you are already drowning in debt, use these tips to keep the spending to a minimum. And if you feel like you need some help getting those debts under control, contact DebtCare today by calling 1-888-890-0888.

  • DebtCare’s Financial and Debt Expert Sara Mitchell Interviewed on CFRB 1010 by Tim Hudak

    Sara Mitchell, financial and debt expert at DebtCare Canada, was interviewed on CFRB 1010 by Ontario’s PC leader Tim Hudak about the implication of debt on Canadian families and solutions for overcoming it. If you are in a financial crisis, feel free to reach out to Sara or the DebtCare team at www.debtcare.ca or by calling 888-868-1400.

  • Not So Happy Canada Day When it Comes to Canadian Consumer Debt According to Yahoo Finance

    Canadian Consumer DebtLast week we celebrated Canada Day and that means that half of 2014 is officially over. Just like New Year’s Day, this holiday often leads people to think back on the past 6 months – have you evaluated your current debt load? Well, if you haven’t, Yahoo Finance has, and has discovered just how much Canadian consumer debt is impacting the nation’s economy.

    Check out this recent release from Yahoo Finance, “Household Debt Overhang Holding Back Canada’s Economy”: https://ca.finance.yahoo.com/news/household-debt-overhang-holding-back-124451782.html. According to the article, Canada was able to overcome the recent financial crisis thanks in part to consumer spending. A hot housing market and consumer spending meant that our economy was able to rebound far quicker than the U.S., but at a substantial cost. Now, thanks to high Canadian consumer debt, individuals are spending less and paying off more, meaning that economic growth won’t reach the levels initially anticipated.

    Furthermore, “Canada’s disposable household debt-to-income ratio is at a near-record high of 164.0 percent. By contrast, U.S. households reduced their indebtedness in the wake of the crash.” Clearly there are drawbacks to having dealt with the crash in a way that meant less economic meltdown for the average Canadian.

    If you are one of the many Canadians whose spending has led to a mountain of debt that now seems unmanageable, it might be time to start thinking about some viable solutions. Don’t get stuck barely able to make ends meet because of the interest on credit cards and the looming collection action being threatened by your creditors. Get in touch with a company today to find out what options exist to help you regain control of your finances.

    For more about Canadian consumer debt and taking back control of your money please contact DebtCare Canada today by calling 1-888-890-0888.

  • Why You should Never Go to a Bankruptcy Trustee in Ontario Without Representation

    Bankruptcy TrusteeA bankruptcy trustee is a court appointed officer. Their job is to administer bankruptcies and consumer proposals in Canada – and they do this by representing both you and your creditors. This means that they are expected to get as much as possible from you for your creditors.

    Take a look at the typical process and you will see how people get themselves in trouble:

    A trustee advertises a financial solution, and you contact them for help (thinking that because you have contacted them that they represent you). However, even though you are the one looking for assistance, they in fact represent both you and your creditors.

    Next, the trustee will pitch you on the financial solutions they can provide, which are usually bankruptcy or a consumer proposal. Since a trustee doesn’t make any money if you don’t sign up, things are often very pleasant at the beginning.

    At no point during this meeting will they tell you how they get paid, but it is important information. A trustee gets paid based on a tariff (a fee set by the government in the case of bankruptcy, a percentage in the case of a consumer proposal, a percentage of surplus income in the case of a bankruptcy) – this comes out of your monthly payment.

    How much you have to pay and the amount of your monthly payments in a proposal and bankruptcy depend on your income and assets – the more income and assets you have, the more you end up paying. In the case of a consumer proposal the amount of proposal you negotiate will be locked in once the proposal is accepted.

    In the case of bankruptcy you have to report your income to the trustee each month and they do a calculation called surplus income. If you have income above a certain threshold you will have to pay your trustee 50% of the amount that has exceeded the threshold. In bankruptcy, when there is surplus income (income over the amount defined by the Bankruptcy and Insolvency Act) your bankruptcy will go from being 9 months to 20 months which can make a huge difference.

    So, why is being represented when going to a trustee a much smarter idea? Because it gives you the chance to, firstly, openly discuss your information without reprisal or pressure to sign. This representation can mean negotiating a much lower proposal, or a much stronger financial picture with contingencies in place to help you bounce back quickly. Finally, when you have your own representation, you won’t have to deal directly with the bankruptcy trustee – that individual will handle most negotiations and correspondence for you!

    Before you call a bankruptcy trustee directly, call DebtCare Canada – we can help keep you protected. Contact us today by calling 1-888-890-0888.