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  • On the Cheap: Free or Cheap GTA Family Activities

    Summer is fast approaching and that means it is time to start planning those family activities and adventures. Yes, we know the summer can become really expensive, really quickly, when you add up all the things you want to do. If you’re looking for something to do that won’t cost an arm and a leg, we’ve compiled a list of fun and free or cheap GTA family activities you can do.

    Free or Cheap GTA Family Activities

    • Become one with nature. Head to the Allan Gardens and take your time winding through the flowers and plants. Admission and limited parking are free.
    • Head to the market. Check out the bustling St. Lawrence Market, the city’s largest market, fill your picnic basket with great local fare and enjoy the entertainment as you stroll through the stalls.
    • Get active. Head out to one of the many public parks in the city. Bring a ball and glove for some catch, a Frisbee or a good book.
    • Get your hands dirty. Head to Riverdale Farm in Cabbagetown. This 7.5-acre facility is a working farm, complete with cows, horses, sheep, pigs and chickens, vegetable gardens and a farmer you can chat with as he does his chores.
    • Head to the beach and cool down. Don’t want to rely on the A/C to keep cool? Head to one of the many beaches the city has to offer. Head to Cherry Beach or Bluffers Beach Park, lay down your towel or spark up a game of volleyball. If it gets too hot, just take a dip!
    • Channel your inner artist. Visit the Art Gallery of Ontario and peruse the permanent collection. Admission is free on Wednesday nights from 6 to 9 PM.
    • Get historical. There are a ton of great museums located throughout the GTA. Every Thursday between 5:00 and 8:00 PM, admission is pay-what-you-can at the Bata Shoe Museum. Shoes not your thing? Drop by the Toronto Police Museum and Discovery Centre and check out stuff like old weapons, uniforms, fingerprinting equipment, and a paddy wagon from 1914. Admission is free seven days a week, even on holidays.
    • Catch a free concert. Several different locations throughout the city offer free concerts and performances all summer long. The Canadian Opera Company, Yonge and Dundas Square, Harbourfront, and Mel Lastman Square are all great places for free entertainment.
    • Get your brew on. If you’re a fan of craft beer, take a free tour of the Amsterdam BrewHouse. Tours take place Monday to Thursday at 5:00 PM and on Fridays at 11:00 AM.

    Summer doesn’t have to break the bank. These free or cheap GTA family activities make it easy.

    If you’re looking for some help getting your finances in order to make summer more stress-free, DebtCare can help.

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

     

  • Will a Creditor Actually Sue You When You Default on a Debt?

    We often have clients call us, when debt becomes unmanageable, asking if a creditor will actually sue if you default on a debt. While it may seem unlikely, it is, unfortunately, very common.

    A creditor may sue you themselves, hire a paralegal to cover it, or assign your account to collections, whereby the collection agency may sue you. If a judgement is secured against you, they can then take enforcement action to obtain the funds owed.

    Enforcement action may include a wage garnishment, a property lien or a frozen bank account.

    All of these are embarrassing and could have other consequences.

    A wage garnishment not only reduces your income (as the money is taken from the source to pay the debt), it also lets your employer know that you have a financial problem. This is particularly problematic for those in jobs where you have to be financially responsible. If you’re self-employed, the notice of garnishment is sent to your clients and intercepts their payments to you, letting them know that you’re financially in trouble. This can damage your reputation.

    A lien on property will effectively mean that you can’t refinance the asset and could mean additional fees and financial consequences to get the lien discharged when it is paid. It will also make the creditor a secured creditor, thus reducing financial options should you decide to file a consumer proposal or a bankruptcy.

    Not only will a frozen bank account result in an inability to access funds, it can damage your relationship with your bank. This may result in them choosing to suspend other credit products, make changes to your account (i.e. removing an overdraft), or deciding not to extend credit to you in the future.

    If a creditor is threatening to sue you, you need to take action now. Waiting will often just result in one of the above.

    If you find yourself worrying about such things, the first question to ask is why you are in this situation to begin with. Do you have financial challenges making it hard to pay your debt? Perhaps you just need a fresh start.

    A consumer proposal is a great way to consolidate debt and:

    • Stop collection action – even a lawsuit or enforcement action from a judgement (as long as it’s not a lien)
    • Stop interest
    • Reduce debt in most cases
    • Consolidate everything into a single monthly payment

    If you owe and your creditor is threatening to take you to court, don’t assume that this is an empty threat. Once legal action is initiated, you may find yourself in much deeper financial waters.

    At DebtCare, we can help you deal with your debt before it gets to this point, or, if it has already reached this point, help you stop that enforcement action.

    Call us today 1 (888) 890-0888.

     

  • What is a Licensed Insolvency Trustee (LIT)?

    When you’re researching your options for getting control of your debt, you may find yourself confused by the vast array of terms out there – both for the options and the people who provide and manage them. This week, in an effort to clear some of the confusion, we are covering one crucial term – Licensed Insolvency Trustee.

    A Licensed Insolvency Trustee (LIT) is a federally regulated professional who provides advice and services to those with debt problems. They are authorized to administer government-regulated proceedings, such as consumer proposals and bankruptcies.

    Often, when individuals start thinking about their options for dealing with problem debt, a bankruptcy trustee or Licensed Insolvency Trustee is the first person who comes to mind. However, there is the misconception that a trustee represents you. While a trustee does represent your interests, they are also representing your creditors’ interests. Their role is to negotiate a satisfactory arrangement for all involved.

    Therein lies the problem. Once you provide information to your trustee, under the assumption that it is private, the trustee will then structure your bankruptcy accordingly (this is what they are required to do). Any information you provide is fair game and will be used to get the largest payout for your creditors. Furthermore, in the case of a consumer proposal, your Licensed Insolvency Trustee is paid based on the size of the proposal. This means that a larger proposal amount equals more revenue for them – there is no incentive to get you the best deal.

    If you are struggling financially and are considering a consumer proposal or bankruptcy to help you regain control, the best thing you can do is speak with a financial consultant with experience helping people deal with problem debt.

    Such a person, hired by you to represent you and only you, will review and structure your financial information based on that review and a realistic plan that you can afford. They will then present a solution to a trustee they know and trust, one they’ve had past dealings with, and co-ordinate the process and help you throughout.

    When you’re drowning in debt, there are many benefits to bankruptcy or a consumer proposal. Both represent an important resource, you just need to be sure that the person standing beside you is actually concerned about your financial welfare.

    At DebtCare, we know how best to protect you. Instead of heading straight to a Licensed Insolvency Trustee.

    Call us first. We represent you. 1 (888) 890-0888.

     

  • Dealing with Income Tax Debt – What Happens if You Owe?

    The income tax filing deadline is April 30th, and that means, if you owe a tax debt to the Canada Revenue Agency (CRA), you may be wondering what happens when you owe and how long you’ve got before the CRA will start asking for their money.

    Firstly, failing to file is never a good idea, even if you know you will owe. Failing to file will result in penalties and interest, as well as possible enforcement action. These add up quickly. If you haven’t filed yet, try to do so soon.

    Furthermore, not filing may be considered tax evasion. At the very least, you may be notionally assessed, meaning the government will estimate your income and then assess penalties and interest. The worst-case scenario, if you choose not to file, is that you could be prosecuted.

    If you file and owe a tax debt, you’re in a better position because you won’t have those added penalties and you won’t face prosecution. However, the CRA won’t wait for years to pass before attempting to collect. We have seen taxpayers’ accounts frozen within the current tax year. For example, one taxpayer filed on time, owed $3000, and had their account frozen the following January.

    A tax debt is a financial problem that should be addressed quickly – you can’t wait around hoping for the best. There really is no ‘best’ here.

    The CRA will want to be paid in full. Agents are not interested in making negotiated settlements or agreeing to long-term payment plans. That just isn’t how they operate, no matter how dire your situation is. If you don’t have the money on hand to pay in full, here are some of your financial options:

    • If you have good credit, you may want to consider obtaining a line of credit or loan from the bank. This option will rely on your ability to repay that debt, but on more reasonable terms. However, if you are already loaded with debt, it may not be the best solution because the interest is higher on unsecured credit.
    • Use home equity to finance the tax debt. This is typically the lowest interest option but you will need a home and some equity to take this route.
    • A consumer proposal. This is a no-interest option that will offer a low monthly payment and will sometimes even reduce your amount of total debt. There are some implications to credit to be considered, but if you’re already drowning in debt it could represent the best financial option overall.

    The best way to deal with a tax debt you can’t pay in full is to speak with a financial consultant who understands all of your available options. Don’t go directly to the CRA as this will result in far fewer possible choices and things could become even more problematic as far as repayment.

    At DebtCare, we can walk you through all of your options and get that tax debt off the table.

    Call us today for a free consultation: 1 (888) 890-0888.

     

  • By the Numbers: What is a Bad Credit Score?

    Your credit score is very important. It represents how lenders perceive you as far as risk and impacts how likely you are to obtain various credit products. If you’re concerned about your credit, you may be wondering what a bad credit score is – and so today’s blog should help you better evaluate your own situation.

    A consumer credit score, also known as a FICO score or Beacon score, ranges from 300 to 900. According to TransUnion, a score above 650 will likely qualify you for a standard loan while a score under 650 will typically make receiving new credit difficult. These are the typical ranges:

    • 750+ Excellent
    • 680+ Good
    • 600-680 Fair
    • Below 600 is not good

    One of the quickest ways to get a bad credit score is to default on your current debts. Missing even one payment can be detrimental. Also, if you have defaulted on numerous accounts, you may not actually remember everything you’ve missed (phone bills, utilities, and other products that are not loans and credit cards), meaning they often get lost in the shuffle, further impacting your credit score.

    Building great credit takes work, but breaking down that great credit can be swift and long-lasting. Once credit has been destroyed, you may want to throw your hands up in the air in defeat, but don’t give up –recovering from bad credit is not as painful as you might think.

    If you’re ready to rebuild, there are certain steps that you can take to get the process started. Begin by getting your credit report to better understand what’s listed there and what you owe. Get it from both credit reporting agencies – Equifax and TransUnion.

    The next step, and arguably the most important step, is to deal with past debt. Obviously, if you had the money to pay these past due balances, you would have done so, but ignoring them further just exacerbates the issue. Speak to a financial consultant who specializes in this area to get support concerning options to clear bad debts.

    While dealing with a bad credit score and rebuilding credit, a secured credit card is a great way to build things up.

    Also, remember not to repeat past bad habits. As you rebuild credit, don’t max out new credit, make late payments or go crazy applying for credit everywhere. These are all red flags for lenders and work towards bringing that credit score back down. Try to keep your limits at 50% of your available credit (or less) and make more than the minimum monthly payments.

    At DebtCare, we understand how difficult it can be when you’re sitting with a bad credit score. If you’re struggling to deal with your debt, we can help.

    Call us today for a free consultation: 1 (888) 890-0888.

     

  • Trying to Negotiate with the CRA is a Dangerous Game

    We are officially reaching the end of the 2017 tax season, and that means that most Canadians have completed filing and many are patiently waiting for their refund cheque in the mail. If, however, you’ve yet to file because you know a tax debt is headed your way, or have filed and have your assessment in hand, you’re probably at the other end of the spectrum. Your first thought may be to call the Canada Revenue Agency directly and attempt to negotiate a payment plan, but we urge you to read on and reconsider that approach. Trying to negotiate with the CRA is a dangerous game – one that can land you in a heap of financial trouble.

    The CRA is well-known for their oft-nefarious tactics for collecting what they believe is owed. When you have a tax debt, the CRA is not interested in a long term payment plan with low monthly payments, and this is primarily why it is so dangerous to call.

    When you initially call the CRA to negotiate a payment plan, things may not seem so bad. Agents are encouraged to cultivate a ‘friendship’ with you in the hopes that you will willingly share as much financial information as possible. This is usually accomplished with a financial disclosure form. In this form you’ll be asked questions about your income, where you work, where you bank, where you live and your current financial obligations. Don’t be fooled – the CRA is not asking for this information to help create a payment plan that suits your current financial situation.

    Once you’ve provided this information, the CRA may agree to accept a temporary payment plan, but once this payment plan expires, that ‘friendship’ will also expire. Now that the CRA has all of your financial information, the new payment plan will take into account none but the most basic living necessities (all other creditors will be subtracted from the equation) and you’ll be facing a monthly payment far and above what you can reasonably afford to pay.

    What if you don’t pay? Thanks to that financial disclosure form, not paying isn’t really an option. Not only does the CRA now know all about your finances they also know where you work, bank and live, making wage garnishments, frozen bank accounts and property liens that much easier to obtain.

    So, if you shouldn’t be calling to negotiate directly with the CRA, what options are available? Unless you can pay the debt in full, speak with a financial consultant to discuss the various options available to clear the debt before enforcement action is levied against you. Once this happens, things are going to become much harder to navigate.

    At DebtCare, we know how difficult the CRA can be to deal with. We also know how to protect you when it comes to dealing with a tax debt.

    Get in touch today by calling 1-888-890-0888.

     

  • Breaking Down Second Mortgage Options and Costs

    A second mortgage is an excellent tool for dealing with debt. In recent years, many Canadians have come to recognize the value of using their home to consolidate debt. Today we discuss second mortgage options and costs and the benefits of using your home to deal with debt.

    Firstly, a second mortgage is great because it has nothing to do with your first mortgage, so you can structure it like a traditional debt consolidation while taking advantage of lower interest rates.

    For example, you don’t HAVE to amortize a second mortgage over 25 years as you would with a first mortgage. You can choose to amortize it over 5 or 10 years to see the debt paid off faster.

    Secondly, using a second mortgage to consolidate debt will often result in a much lower interest rate compared to the credit products you are currently concerned about.

    There are lots of different second mortgage options depending on your equity positioning and credit standing.

    If you have good credit, a line of credit or conventional second mortgage through a bank at a great low rate are two attractive options. With a line of credit, amortization is not required and your monthly payment will be based on the balance. That being said, selecting a line of credit will mean you need to be more disciplined because minimum payments are often 1-2% of the balance and thus very little will get paid to principal if you only make minimum payments. When choosing between a conventional second mortgage and line of credit, be sure to look at how long you want to be paying the debt and reverse calculate what your payments will look like – a good mortgage broker can help you do this.

    If you have bad credit, this will likely reduce your options and can mean higher rates, albeit usually still far less than a high interest loan from a finance company. If your credit is only slightly bruised, a finance company or trust company may extend second mortgage financing to you. However, if it is really bad you will need lots of equity and your broker will likely get your mortgage financed through a private lender. Most private lenders charge on an interest- only basis, however some may allow you, as with a line of credit, to pay more than the interest if your budget will permit. In this case, you’ll also want to check if the lender offering the mortgage will allow you to make extra payments without penalty.

    Keep in mind that second mortgage financing is a mortgage so you will have some fees. Potential fees could include (and this largely depends on how good or bad your credit is – good credit means fewer fees) a broker fee (lender may pay all or part if credit is good), legal fees (often less with lines of credit), application or administration fees from lender, and an appraisal (if your mortgage is not CMHC insured).

    Going directly to a lender is never a good idea. It is better to deal with a broker because they work with ALL lenders and can explore all options to get you the best deal. This is also important if your credit is bad as only brokers can obtain private mortgage financing.

    If you’re interested in finding out more about using second mortgage financing to consolidate debt, DebtCare can help.

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

     

  • Protecting Your House When You Have a Tax Problem

    Tax season is officially upon us, and many Canadians have already filed or have at least started the process. While a bit of a hassle, it is usually not accompanied by a great deal of stress. However, if you are like one of the countless individuals sitting with the knowledge that a tax debt is looming once you file, or if you’re still dealing with a tax problem from previous years, stress is likely something you are dealing with on a daily basis. Today we talk about how to protect your home when a tax problem is hanging over your head.

    If you own your home and have a tax problem, you really do have to act fast. You need to have a plan to deal with the debt before it becomes a major issue.

    Why? The Canada Revenue Agency is very strict when it comes to obtaining money owed. Enforcement action is very common, and when you own your own home a property lien is an effective method to achieve this. Once a property lien is in place, it becomes very difficult to access any equity to secure a loan, the CRA becomes a secured creditor, meaning a proposal or bankruptcy becomes more difficult, and if you choose to sell, they get your equity to cover the tax debt.

    When there is no lien you have options:

    Refinancing your home to pay the tax debt is an important option to consider. Accessing the equity you currently have may give you the ability to cover a significant debt, thereby avoiding enforcement action.

    If you don’t have enough equity, or your credit will not support a refinancing of your home, a consumer proposal or bankruptcy may be good to consider. Both can help you deal with a tax problem before it balloons.

    What about transferring the home into someone else’s name – won’t that solve the problem? No! Doing so will only transfer the tax debt to that person. The CRA uses Section 160 of the Income Tax Act on a regular basis against those who attempt to avoid a tax problem in this way.

    Protecting your house means acting fast and looking at what you can leverage now to deal with the tax problem is crucial. As mentioned, the moment the CRA places a lien on your home, your options decrease exponentially.

    When a tax problem has you losing sleep, get in touch with DebtCare. We can help you get the debt sorted and help you protect your home in the process.

    Call 1-888-890-0888 today.

     

  • CRA Tax Consequences: Late Filing Penalties

    The Canada Revenue Agency timeline requirements which all taxpayers must abide by are well known. As a Canadian, you are required to file your income taxes by a certain date each year, and failing to file on time can result in penalties and interest assessed, often inflating a tax balance owing by an overwhelming amount.

    For income tax returns, possible CRA late filing penalties and interest include:

    Late-filing penalty: If you owe a tax debt and don’t file your return on time, you will be charged a late-filing penalty. Currently, the penalty is 5% of the balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months. If you have repeatedly filed late, the late-filing penalty may increase to 10% of your balance owing, plus 2% of your balance owing for each full month your return is late, to a maximum of 20 months.

    Interest: If you have an unpaid balance, you will be charged compound daily interest on that amount. You will also be charged interest on any penalties charged. The rate of interest charged by the CRA can change every three months.  Interest rates are published on the CRA’s website.

    In addition, if you continually fail to file on time, or have failed to report income in previous years, you may be subject to additional penalties.

    Repeated failure to report income penalty: If you fail to report an amount on your return (whether intentionally or in error), and you also failed to report an amount in any of the previous three years’ returns, you may have to pay a federal and provincial/territorial repeated failure to report income penalty. The federal and provincial/territorial penalties are each 10% of the amount that you failed to report on your current return.

    It is easy to see how that tax debt can quickly grow after adding in penalties and interest, isn’t it?

    Just wait – these penalties, while significant, may not be the only ones you face due to late filing. While owing a tax debt is not illegal, failing to file is considered tax evasion and you can be prosecuted. Don’t think that can happen to you? Just check out the countless average Canadians prosecuted every day: http://www.cra-arc.gc.ca/nwsrm/cnvctns/menu-eng.html.

    Wait, there’s even more! If the CRA thinks that you have been negligent, gross negligence penalties equal to up to 50% of the tax debt may also be added.

    Knowing that a large tax debt will be on file once you’ve filed can be stressful, but if you’re considering not filing to avoid it this is the worst thing you can do.

    A tax debt is not a legal problem – it is a financial one. This means that you will need a financial plan to resolve it. There are financial solutions for dealing with a tax debt – even if it appears that you have no way to pay the debt. Get serious about your tax debt and seek help. Even with a large tax debt, the best course of action is to speak with a professional who understands the problem and can offer real solutions.

    At DebtCare, we have years of experience dealing with tax debts. We can help you find a way to pay it off, as soon as possible.

    Get in touch today: 1-888-890-0888.

     

     

  • Who Represents You in a Consumer Proposal?

    For many Canadians drowning in debt, a consumer proposal is a very valuable resource. The ability to reduce the amount of debt you owe, reduce interest and combine all payments into a single monthly payment you can afford, are all really significant benefits. That being said, a consumer proposal is a complex legal process, one that must be administered by a trustee in bankruptcy, so the question remains, who represents you in a consumer proposal?

    Often people are confused when it comes to this question. After all, trustees often market their services as a solution to your debt problems, and since you’ve enlisted their services, it would seem a safe assumption that they represent you. And that isn’t necessarily an incorrect assumption. A trustee does in fact represent you in a consumer proposal. The problem is, they also represent your creditors.

    When administering a consumer proposal, a trustee is required to be an impartial party, presenting the best solution for you and a fair option for your creditors. The issue with this is that trustees are paid based on a percentage of your proposal, so the bigger the proposal, the more they earn. This creates a major conflict of interest when it comes to protecting you!

    When you first meet with a trustee, they will ask you to provide information about yourself and your finances. Entering this meeting assuming the trustee is representing you and you alone can result in you providing information not necessary for the administration of the consumer proposal. This information may then be used to obtain a larger amount for your creditors, and thus a larger paycheque for your trustee.

    Going to a trustee without representation is like going to court without a lawyer. Most, we would argue, would see this as a rather dangerous idea, and thus is one we would advise against. It is the same with a consumer proposal. You want your own representation when considering a consumer proposal – representation to provide protection for you and your financial assets without having to also worry about your creditors.

    The point of this blog is not to argue that trustees cannot be trusted. Most can, but government regulation requires them to be fair to all parties, which naturally results in issues. The point is to inform you of the dangers of calling a trustee before securing your own representation.

    Our advice is to speak with a financial consultant who can protect you, one hired by you to represent you so there are no repercussions in telling them everything. They can negotiate your consumer proposal with a trustee so that the deal proposed is likely to be successful.

    At DebtCare, we have longstanding relationships with several trustees and can protect you throughout the process.

    Contact us today before contacting a trustee directly. 1-888-890-0888.