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  • The Low Interest Credit Hunt– Your House is Likely the Fastest Way There

    debt22015 was not the year for many big businesses. Sinking prices for oil and other commodities took a big bite out of national income, business investment and domestic demand – and gross domestic product rose just 1.2 % in the year. Last year’s economic growth was pretty dismal – some even suggesting 2015 experienced a slight recession – and that usually doesn’t mean anything good. However, when it comes to your own hunt for low interest credit rates, it actually works in your favour.

    According to the Globe and Mail, Canada’s growth was the lowest since 2009: “Canada’s oil-battered economy in 2015 grew at less than half the pace of 2014, Statistics Canada reported, as a return to sluggish growth in the fourth quarter punctuated a disappointing year.”

    You can read more about how we entered 2016 here: http://www.theglobeandmail.com/report-on-business/economy/growth/canadian-economy-grows-at-better-than-expected-pace-in-fourth-quarter/article28962744/.

    So, we mentioned favourable results for you, but what does this have to do with your low interest credit hunt? These events triggered another: the Bank of Canada dropped interest rates to historic lows, and Canadians began using record low interest rates to finance.

    Right now, Canada’s lending rate is sitting at .5% – but this is an historic low that won’t last forever. If you are looking for low interest credit, these rates present the best opportunity to deal with things you want to finance.

    The lowest interest credit you will likely encounter will be through a mortgage. If you own your home, it makes sense to use equity to finance things like debt while rates are so low. These low interest rates can save a ton in the long run.

    In an effort to temper hot markets which some claim are inflated, this low interest rate was also accompanied by new CMHC mortgage rules, such as reducing the amounts of mortgages you can insure, reducing allowable repayment amortizations and most recently requiring larger down payments on purchases of more than $500,000. See here for more on these rules: http://www.cbc.ca/news/business/new-mortgage-rules-down-payment-1.3440797.

    If you are looking to finance, whether as a means of debt consolidation or to take on some much needed/wanted projects, now is the time to take advantage of great low rates before they go up or the government institutes more rules that make it harder to borrow.

    DebtCare has the financial options that let you take advantage and clear up your finances.

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

     

  • Missing the CRA Tax Deadline Will Cost You…

    debt2The 2015 CRA tax deadline is fast approaching – April 30th is less than 2 weeks away! That means that your income taxes need to be filed before this date or you’ll be facing penalties and interest if you owe a tax debt.

    If you have a balance owing for 2015, the CRA will charge compound daily interest starting May 1, 2016, on any unpaid amounts owing for 2015.If you have amounts owing from previous years, compound daily interest will continue to be charged on those amounts. Payments you make are first applied to amounts owing from previous years.

    The CRA late filing penalty is as follows:

    If you owe tax for 2015 and don’t file your return for 2015 on time, you will be charged a late-filing penalty of 5% of your 2015 balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months.

    If you were charged a late-filing penalty on your return for 2012, 2013, or 2014, your late-filing penalty for 2015 may be 10% of your 2015 balance owing, plus 2% of your 2015 balance owing for each full month your return is late, to a maximum of 20 months.

    Yes, those penalties will really add up quickly – and can easily become larger than the initial tax debt if left long enough.

    If you are thinking about missing the deadline because you know that you will owe but can’t pay right now – this is not the way to go. Owing money to the CRA is not a criminaloffense, but not filing your returns is a criminal offense (this is considered tax evasion) and can land you in more than financial trouble – average Canadians are prosecuted every day as a result.

    If you don’t file, how does the CRA know if a debt is owed. Even if you don’t file, the CRA does perform “arbitrary” assessments where estimates of your income are used to determine what should have been paid. Remember, your employer will file and thus the CRA will be aware that you earned income for the year.

    If you can’t pay and don’t know what to do, file and then get some financial help. Your first step is to consult a financial professional who can review your income and finances and leverage that to help you achieve a payment arrangement with the CRA that you can live with. This could mean financing or it could mean leveraging other means to stop the CRA from coming after you.

    Assuming the CRA will not come after you is never a smart approach – it will.

    Stop penalties and interest from accruing today by calling DebtCare. We will help you sort things out: 1 (888) 890-0888.

     

     

  • CRA Collections Calling You at Work? How to Stop it Now!

    debt1Spring is fast approaching, and that means the snow may still be holding on but it is getting weaker and weaker. With winter on the way out, that means the tax season is just around the corner. However, if you are currently sitting on a tax debt, you may be months into your tax season, dealing with CRA collections on a regular basis.

    If you owe the Canada Revenue Agency, be it from the 2014 tax year or earlier, you are likely well aware of the fact that these agents do not give up. CRA collection agents are relentless, and will try at every turn to obtain any money they believe is owed to them. This may involve calling you at home, bombarding you with official letters, or even calling you at work, which is never good for business!

    Can’t these phone calls be stopped? There is a Taxpayer Bill of Rights that addresses harassment, but as long as agents are following it they can still use tactics that are embarrassing and may feel harassing (even if they are not actually considered harassment). The only real way to stop the phone calls is to deal with the debt.

    So, what are your options?

    1. Pay your debt in full. We hope that if this were an option you would have already taken it, since interest accrues at an alarming rate on a CRA debt. If you’ve been holding out in the hopes that the debt will just disappear rather than dipping into the savings account, we strongly urge you to reconsider.
    2. Get a loan to pay the debt. If you only owe a small amount, this can work, but often tax debts are massive, in which case an affordable monthly payment may be impossible.
    3. Refinance your house to pay the debt. Many people do this, as it is a viable option, usually with lower interest, but you need to do it before a lien is placed on the home (a very common enforcement action taken by the CRA).
    4. Consumer proposal. If refinancing is not an option, and a loan doesn’t make sense, you may want to consider a consumer proposal to get rid of the debt. This will mean one payment, a stop to interest, a stop to collections and sometimes an overall reduction of the debt.

    So what is the best option for you? If you want to stop CRA collections, the best option depends on your unique circumstances, and this is best determined after a consultation with a financial specialist. Someone with the expertise and experience working with CRA collections and tax debts can help you determine the best route for success.

    At DebtCare, we can help you find that route. Call us today at 1-888-890-0888.

     

     

  • A No or Low Interest Consolidation is the Only Type of Viable Debt Consolidation

    debt2People call us all the time and tell us that they would love to pay down their debt or get rid of it altogether, but they are not quite sure of the best way to do it or even where to start. There really isn’t any one ‘best way’ that works perfectly for everyone – the best way for you depends on your situation and goals. That being said, a no or low interest consolidation is often the only viable type of consolidation.

    When you are thinking about debt consolidation to get rid of debt, here are a few of the types you may be considering:

    • Regular credit cards. This works…almost never. Why? Because credit cards are high interest – usually the highest interest of any type of consolidation product – and since debt consolidations often deal specifically with credit card debt, this option kind of defeats the purpose, no? 12% to 30% monthly compound interest makes them the most difficult to pay down, and even though using a credit card to consolidate can mean just one monthly payment, if the payment is all interest, you really are not making any inroads as far as paying off the debt.
    • Lines of credit. Although lines of credit are a popular debt consolidation option, unsecured lines of credit will often run at 8%+ interest. While this makes them less difficult to pay down, they are still not the cheapest option.
    • Home equity loans. If you have equity, these can represent a viable option, as long as the interest is low. They are easier to pay off as well. That being said, they will often run at 2% above prime or upwards, depending on credit.
    • Consumer proposals. If you don’t have equity, or have a poor credit report that makes getting any real credit an issue, these can be a great way to consolidate debt. There is no interest, often a lower balance to be repaid, and one affordable monthly payment. The trade-off is that there are implications to credit, but this option will probably result in the lowest payment and is often the best answer for people who can’t reasonably pay off their debt.

    The only way to explore all of your options for debt consolidation is to work with a company that can address any and all that are open to you.

    At DebtCare, we deal with debt. A debt consolidation may just be the answer you’re looking for when it comes to getting rid of debt. Call us today at 1-888-890-0888.

     

     

  • When Your Trustee in Bankruptcy is Pushing a Consumer Proposal…

    debt2So you’ve finally decided to get a handle on your debt. You’ve done some research, spoken to friends and family, and have decided to get in touch with a trustee. On the first consultation, that trustee in bankruptcy suggests a consumer proposal. Then continues to suggest it, making it seem as though it is your only option.

    If your trustee in bankruptcy is pushing a consumer proposal, beware!

    Don’t get us wrong. A consumer proposal is a great way to get out of debt, and thousands of

    When Your Trustee in Bankruptcy is Pushing a Consumer Proposal…

    Canadians are taking this appealing option for the number of benefits it presents. However, it is not the only way to get out of debt – and if your trustee is presenting it as such, they might have ulterior motives.

    Why should you proceed with caution? It is simple: a trustee administers proposals and bankruptcies – that being said, these individuals are not there to represent and act for you alone. Their role is to administer your estate for the benefit of you AND your creditors. Ok, that seems fair…

    The problem here is that in consumer proposals the trustee is compensated based on the amount of the proposal. That alone presents a conflict. Add to this the fact that they don’t represent you, and it, essentially, is the same as going to court with a lawyer who says that they also act for the prosecutor – not sounding like such a smart idea anymore, is it?

    If you are in debt and looking for a way out, the first thing you need to do is get an impartial opinion on the state of your credit and finances. This includes looking at ALL the ways that the debt could be addressed, including exploring consolidation options, not just a consumer proposal.

    If a proposal is the best answer, that is great – it could save you money on interest, bring down your total debt balance, and consolidate all of those debts into one tidy monthly payment. Just be sure to have your representative negotiate the proposal with the trustee – don’t go to the trustee on your own – then you get the best deal and the representation of a professional who is representing only your interests and goals!

    At DebtCare, we deal with debt every day, and we represent you and only you. If you are considering a consumer proposal or any other debt relief option, call us first. We will make sure that you are protected! 1-888-890-0888.

     

  • Credit Reports 101 – The Credit Score Range and You!

    debt1Your credit score is important. We all know this. Most of us also know why – it indicates the level of risk you present to lenders when applying for various credit products, including mortgages, car loans, personal lines of credit, credit cards, even insurance. What many people are not as sure about when it comes to credit reports is the credit score range and what the items on your report mean.

    Simply speaking, a credit score range is the range of numbers that makes up credit. The credit score range is from 300-900 – 300 representing the worst credit and 900 the best.

    Lenders say Beacon score, Equifax tells consumers FICO score – both of these mean credit score. Within your credit report there are ratings that make up your credit score.

    Here are some of the basics:

    • Each credit product will have a letter:
      • I = Installment credit like a loan
      • R = Revolving credit like a credit card
      • O = credit like cell phones
    • When you have a 1 rating, e.g. R1, this means that your account is up to date and paid as agreed
    • If your rating is 2-5 you are 30-150 days in arrears
    • If your rating is 7 you are in credit counselling
    • If your rating is 8 you have had a vehicle repossession
    • If your rating is a 9 you have gone 6 months in arrears and are considered a bad debt write-off

    These ratings will contribute, along with other things such as credit amounts and balances, to your credit score. They help lenders determine your credit behaviours and what your behaviour will likely look like if they extend credit to you.

    Now where does your credit score fall in the credit score range:

    • Under 500 – really bad credit
    • Under 550 – bad credit
    • Under 600 – not good credit
    • 620 and up – you may be approved for a CMHC insured mortgage
    • 680+ the bank will likely give you unsecured credit

    680 is what you should set as an initial goal. Anything above this usually indicates that you have positive credit history and good credit behaviour, and thus present less risk. Lower risk usually means a higher chance of obtaining credit and often a lower rate of interest.

    Ok, so you’ve determined that your number is in the 500 – lower 600 range. How can you get that score up? Rebuilding credit takes time, but it is possible.
    Here are some tips.

    • Get rid of some of your debt. Credit balances at or just below maximum are going to bring that score down, so work on paying off those debts.
    • Make sure that you are making at least the minimum payment, on time, every month, for every product. Keep in mind that just paying the minimum balance, while it will help rebuild credit history, will not really help you pay off debt as these minimums are usually little more than monthly interest.
    • Stop applying for new credit. Any time a lender pulls your credit report, a request for a new credit card will show on your report. Too many and you look like a credit seeker, someone who is living beyond their financial means.

    Credit reports and the credit score range can be confusing, but once you’ve figured out where you sit on the scale, you can work on rebuilding credit if it isn’t up to par.

    DebtCare can help. Call us today at 1-888-890-0888.

     

     

  • Stopping a Wage Garnishment is Easier Than You Think – Even a CRA One

    deb2Situation: You wake up Friday morning, it is payday, and it is going to be a good day. You check your bank account, realize there is money missing (your paycheque was only a portion of what it should have been), so you do some research and find out your wages have been garnished. So long good day…

    If a creditor or the Canada Revenue Agency is trying to garnish your wages (or has already leveraged a garnishment) you can stop it. Here are some things you need to know.

    Whether you owe a creditor or the CRA, your wages can be garnished. The only major difference between creditor garnishments and CRA garnishments is that a creditor needs to get a court order to garnish your wages and the CRA does not. (The creditor will have to sue you and win his case to get that order.) At that point, the process is fairly simple; once a court order is obtained, a letter is sent to your employer (or your clients if you are self-employed), and they are required by law to take a portion, sometimes up to 50%, and send it to the court.

    When a creditor garnishes you, your options are to pay your debt, make a motion to the court asking to set aside the garnishment and make monthly payments, get your creditor to agree to a voluntary monthly arrangement or deploy a federal government program to stop your creditor.

    When the CRA garnishes you, your options are to pay your debt, get the CRA to agree to a monthly payment arrangement or deploy a federal government program to stop your creditor.

    What is a federal government program?

    • There is a law called the Bankruptcy and Insolvency Act which offers various protections to people with serious financial problems.
    • Not all protections in the Act involve bankruptcy – there is also a consumer proposal option which is similar to a debt consolidation.

    Protection under this Act may mean that:

    • Your creditor or the CRA has to remove the garnishment
    • Interest will stop
    • The debt may be reduced
    • You will have a single monthly payment

    How do you begin the process of applying for protection under this Act? These are formal processes that need to be carried out correctly the very first time. Your best approach is to speak with a financial consultant to discuss the various options available to you, one with the knowledge and experience leveraging these programs to help individuals deal with wage garnishments.

    Stopping a wage garnishment once it has been put in place may seem impossible – but trust us, it is not. Call DebtCare today at 1-888-890-0888.

     

     

  • Credit Repair Companies and How to Choose One

    deb2Your credit controls a lot in your life. It can impact your ability to get a car, a home, insurance, and some employers will even pull a credit score as part of their reference check. When your credit is not up to snuff, you may find it difficult to obtain even the most minimal credit, and when you do find it you’ll likely be paying sky-high interest.

    This is where credit repair companies enter the scene. Often we try on our own at first to fix problem credit, trying hard to make more than minimum payments in an attempt to pay off debt and work on bringing a credit score back up. However, if you’ve decided that this route just isn’t working, and you need a little extra help and guidance, you may be considering a credit repair company’s services.

    Great. These companies exist for a reason, and that reason is to help average Canadians deal with problem credit. That being said, all credit repair companies are not created equal. While some are fantastic and honestly aim to help you repair your credit as quickly as possible, others are really little more than smash and grab schemers with no intention of actually helping you reach your goal.

    So, how do you choose the one that will truly help? There are certain things to look for, and certain things that should be considered red flags.

    Start online. Check reviews and social media to see what others are saying. Is the company on Facebook or Twitter? Are they active? This is usually a sign that they are genuine since others can post about the company. Activity which includes content that is valuable to you is also a good thing – it shows the company is taking the time to address your needs, whether you are a client or not.

    Does the company have a physical address? Are you able to find them on Google Maps and drive to an office and speak with someone? Can you find the contact information of owners and employees on the company’s website? Those smash and grab companies we spoke of earlier – they are taking money with the promise of assistance and behind the scenes the only thing they are doing is pocketing it. If there is no office, there is no real way to find a person if things go south.

    When you call for a consultation, how many solutions are offered? If there is only one solution suggested, and the underlying factors which led to the problem credit in the first place are not addressed, you may want to go with a different company on the list. The one you choose should be able to provide a plan following a review of your credit and financial profile and a process to follow-up your success.

    Credit repair is about more than just credit. Credit repair may involve changing habits and addressing debts, and these two things require a strategy.

    At DebtCare, we’ll sit down and work with you on a strategy that fits your unique situation, fixing your credit effectively, as quickly as possible. Call us today at 1-888-890-0888.

     

  • Dangerous Canada Revenue Agency Requests and What to Do if You Get One

    debt1Tax, tax, tax. There is nothing fun about tax – especially when you owe. If you owe the Canada Revenue Agency money, you are sitting on a ticking time bomb. They want that money and they will get it.

    The Canada Revenue Agency is not your friend. Agents can be sneaky when it comes to finding and collecting tax dollars. Just remember: the more they are willing to negotiate with you, the less information they have – hence the willingness to ‘cooperate’. They will only negotiate to get information from you. And once they retrieve that information, that ‘cooperation’ can turn ugly, really quickly, leading to a payment plan that you can’t conceivably manage.

    Here are some of the Canada Revenue Agency requests that may seem harmless at first:

    • Asking where you work
    • Asking where you bank
    • Sending you a financial disclosure statement
    • Asking you to submit info on your income and expenses in exchange for a payment plan

    Sure, these may seem like basic requests, but this is how the information is used:

    • Knowing where you live = search to see if you own your home, can be used to leverage a lien
    • Knowing where you work = can be used to leverage a wage garnishment
    • Knowing where you bank = can be used to leverage a frozen bank account
    • Knowing who your clients are = can be used to set-off your receivables

    If you have received any Canada Revenue Agency requests for information, you could be in serious trouble and should not try to deal with them directly, on your own. Any questions you answer, no matter how harmless they may seem, can be used against you. So, what can you do?

    If you have a tax debt that you can pay, stop ignoring it and pay it. Once you’ve paid the balance on the debt, the Canada Revenue Agency will stop collection action because you no longer owe them money. This is the best solution to the problem.

    However, if you have a tax debt you can’t pay, you have a financial problem, so get counsel before taking any action. Speaking to a financial specialist, one with the knowledge and experience helping individuals deal with Canada Revenue Agency requests and collection action, will help you determine the best course of action to deal with debt.

    In the end, our best advice is to refrain from offering the CRA any recourse for action using information willingly handed over by you, the taxpayer.

    Have a tax debt and receiving CRA requests for info and don’t know what to do? Call DebtCare. We can help you deal with the CRA and get rid of that tax debt. 1-888-890-0888.