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Tag: get out of debt

  • 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.

  • Spring Cleaning Should Include Cleaning Up Your Finances

    Cleaning you your FinancesThe sun is shining and spring is in the air. Cars are lined up at carwashes and the parks are filled with people taking advantage of the warm weather. And, with the advent of spring comes the inevitable ‘spring clean’. From a financial perspective, the spring clean also represents the perfect opportunity to get your finances cleaned up.

    Still feeling weighed down by a financial boulder? You are not alone. Canadians everywhere are dealing with rising debt loads and relying on credit to pay for everything. If you are struggling with debt, it is time to take control and clean up your finances. We’ve compiled a list of ways to help you manage this spring clean.

    Financial Spring Clean Tip #1: Make a list. Sure this list won’t include things like washing all of the windows or cleaning out the garage, but it should include those financial goals you want to achieve in the coming months. It is easier to stick to something if you can physically tick things off of that list.

    Financial Spring Clean Tip #2: Create a budget. Sure this seems like a band-aid solution that many individuals attempt – but if you are serious about taking out the ‘debt’ trash, creating a realistic budget and sticking to it is crucial. A budget, one that takes into account every aspect of your monthly finances, can show you exactly where you need to sweep away some of that extra spending and where you can save.

    Financial Spring Clean Tip #3: Organize. Just as you would organize those closets or bins collecting miscellaneous junk, organize your debt. A great way to do this is to consolidate. Instead of having several different credit cards, loans, and lines of credit, consolidating debt merges all of these into one, neat, tidy monthly payment. The added bonus here is that this also reduces the amount of your monthly interest. So, just like purging your closet gets rid of those items collecting dust, consolidation gets rid of that extra financial burden.

    Financial Spring Clean Tip #4: Call in the professionals. Rather than attempting to tackle that mountain on your own, seek the guidance of someone that knows exactly how to help you get out of debt. A professional financial consultant can give you the advice you need and present the options that will help you get rid of your debt. Whether it be budgeting tips, a consumer proposal, or bankruptcy, a seasoned financial consultant, one with your best interest in mind, will get you on the right track to financial spring cleaning.

    Don’t let another year of debt build up. See spring as the perfect opportunity to get your finances under control and regain your financial independence.

    To get started on your financial spring cleaning and get rid of your debt for good, please contact DebtCare Canada online or call 888-890-0888.

  • Get Out of Debt Canada

    Even though the economy seems to be rebounding, the average Canadian household debt load continues to grow. People across the country are still relying heavily on credit for a great number of their normal purchases, and many are finding it harder and harder to pull themselves out of this dangerous cycle.

    The stats on Canadian debt are unprecedented. A recent report from the CBC stated that the average unsecured consumer debt load jumped 4.6 percent in the third quarter of 2012 – the average amount being $26,768. The debt to income ratio has jumped from 140 to 165 percent. For Canadians, the trend seems to be one of continued reliance on credit to the extent that many are opting to up limits and increase borrowing.

    This trend is becoming more and more problematic for those Canadians unable to meet minimum monthly payments. If monthly financial responsibilities exceed income, the results can be disastrous. This is why it has become increasingly important to get out of debt and take back control of your finances.

    An important thing to remember when you are thinking about how to get out of debt is that you don’t have to do it by yourself. The influx of companies offering debt reduction services is evidence of this. Many Canadians are turning to these companies to get out of debt. It is important though, even with new regulations being put in place, to make sure that the company you choose is one that has your best interests in mind.

    A good financial consultant is a great option for a number of reasons. An experienced, well-reputed financial consulting company can offer you solutions to get out of debt the right way. By offering you budgeting advice alongside various methods to get out of debt, a debt reduction company can give you the help that you need to get rid of your debt.

    Many Canadians worry that bankruptcy is the only option when drowning in debt – it isn’t. Instead, debt consolidation is a great solution for many Canadians, as is entering into a consumer proposal. Consolidating your various monthly payments into one, easily managed payment not only makes it easier to pay, but this can also reduce the interest. A consumer proposal, if accepted, can reduce your debt substantially, making it far easier to get out of debt much more quickly.

    Don’t keep ignoring your financial problems to the point that they take over your life. Instead, talk to a good financial consultant who can present the options available to help you get out of debt – before it is too late.

    It is time to get out of debt Canada. For more information about how to deal with your debt, please contact DebtCare Canada today by calling 888-890-0888 or visit www.debtcare.ca.

  • Getting Out of Debt in the New Year

    So the holidays are over and no doubt the holiday bills have started rolling in. It is easy to do serious financial damage during the holidays. Debt can take a mere couple of weeks to rack up, but can take months and even years to pay off. Getting out of debt in the New Year is on many families’ ‘to-do’ lists, but getting out of debt is easier said than done.

    Your ability to get out of debt in the New Year will greatly depend on your own personal circumstances. Let’s review some of your options.

    Getting out of debt the good old fashioned way. Getting out of debt the good old fashioned way will take resources because it will involve using your existing assets and cash flow to get out of debt. If you don’t have savings or investments that you can liquidate to pay down debt you will have to take a good hard look at your budget. Think of the time frame in which you would like to be debt free. If it is 24 months for example, then take your total debt, divide it by 24 months and then increase the monthly amount by 30% (to account for interest).  Do you have enough room in your budget to pay off the debt on a monthly basis?

    Getting out of debt through a debt consolidation. Getting out of debt through a debt consolidation is an option for homeowners who have home equity or for those with very good credit. Though traditional debt consolidation can be a good choice for getting out of debt – the debt consolidation interest rate, fees and terms will determine whether it is the best choice for getting out of debt.

    Getting out of debt through a financial program. If you don’t have assets or savings to pay off your debt and you don’t have room in your budget to get out of debt in a reasonable period of time, then an alternate financial program may be the best solution for you. Some financial programs involve freezing the interest on your debt and even reducing your debt. This can result in greatly reduced monthly payments, making the prospect of getting out of debt a reality for an individual who doesn’t have much to put towards getting out of debt.

    It’s a jungle out there and with so many companies promoting different things it can be hard to know what the best financial choice is. Making the wrong financial choices can cause you to pay more in the long run and can even harm your credit. So how do you know a financial friend from a financial foe? By trusting your instincts and doing lots of research. Do they have a website? Do they have a bricks and mortar location? Do they have people following them on social media? Have you heard of them before? If you are dealing with a debt company or mortgage brokerage, is the company’s management accessible to you?

    Doing your due diligence and then partnering with a financial service provider who can help you come up with a meaningful solution to deal with your debt will be your first step towards getting out of debt and enjoying financial freedom in 2013.

    For more information about getting out of debt in 2013 or if you need help with your 2013 financial planning please contact DebtCare at 416-907-2582 or visit www.debtcare.ca.

  • Debt Relief in Canada Blog Series Part 3 – Are There Consequences to Filing for Bankruptcy?

    There are many options for debt relief in Canada, and one of the most common is bankruptcy. If you have financial problems, bankruptcy may seem like a scary option because of the consequences that many people associate with filing for bankruptcy. Hopefully this article will help you to understand bankruptcy better and determine if in fact it could be an option for debt relief that you should consider.

    Bankruptcy is generally filed by people who have limited income or significant debt in relation to their income. Most first-time bankruptcies last either 9 or 21 months. When an individual files for bankruptcy, a trustee in bankruptcy will assess the bankrupt’s household income, assets, liabilities and personal circumstances. Personal circumstances include the number of people in the household and the number of dependents that the bankrupt has. Based on bankruptcy guidelines, if your income, once all factors are considered, is below a specified threshold, then the monthly payments in bankruptcy will last for 9 months. If the income is above a specified threshold, then it will be determined that the bankrupt has surplus income. This will result in higher payments in bankruptcy over a specified period of time, in most cases 21 months.

    Some of the pros of filing for bankruptcy are:

    • Immediate relief from collection action from unsecured creditors (such as wage garnishments).
    • A monthly payment that is less than what you are likely contractually obliged to pay to your creditors now.
    • The opportunity for a fresh start to get out of debt in a short period of time, enabling you to rebuild your credit and finances.

    Many people don’t know that, in many cases, when you file for bankruptcy you are able to keep your home and vehicle.

    Some of the cons of filing for bankruptcy include:

    • If your financial situation improves during your bankruptcy you could be subject to additional surplus income. If there was no surplus income when you filed for bankruptcy and your bankruptcy repayment is over 9 months, surplus income during bankruptcy could result in your monthly payment in bankruptcy being extended to 21 months.
    • The bankruptcy will remain on your credit report for 6 years from the date it is discharged. With that said, most financial institutions will do business with a bankrupt individual who has 2 years of re-established credit after bankruptcy.
    • Having a number of assets with equity in them will complicate things. In this case, a consumer proposal may be a better option than bankruptcy.

    Bankruptcy is a very viable debt relief option in Canada, and while there are some consequences of filing for bankruptcy, in many cases there are many more benefits. Bankruptcy is an option for debt relief in Canada that can provide you with immediate relief, not only from collection action, but also the stress that accompanies a financial problem. If you have creditors that are currently after you, perhaps even suing you, this is relief that can provide you with a breath of fresh air, enabling you to think clearly again and get your personal and financial situation back on track.

    For more information about options for debt relief in Canada or to see if you are a candidate for bankruptcy please call DebtCare at 416-903-4000 or visit www.debtcare.ca.

  • Why You Should 100% Be Represented in a Consumer Proposal Canada!

    If there is one way to get out of debt it is through a Consumer Proposal Canada. Listen up! This is not a process you should go into unrepresented. Watch this short video by Michael Goldenberg, President of DebtCare Canada, where he discusses why going to a trustee directly for a consumer proposal can have big financial consequences. A Consumer Proposal (Canada) is a great idea if you have a financial problem, but there is a lot of information you need to know before doing so, and DebtCare Canada can help to educate and represent you through the process.

    If you would like more information about making a consumer proposal (Canada) contact DebtCare at 416-907-2582 or visit www.debtcare.ca.

  • Divorce and Debt – A Match Made in…

    Divorce and debt, debt and divorce; the two really go hand-in-hand. Debt and financial problems are one of the leading causes of divorce in Canada. When couples divorce and debt is present one or both parties can find themselves in severe financial turmoil.

    Divorce and debt are a toxic combination because when couples divorce they can no longer share living expenses and each will have new living expenses in addition to monthly payments on debt. In a divorce, the higher income earner may end up having to take more responsibility over the debt. In other cases, the lesser income earner may agree to take responsibility for the debt in order to gain assets such as the home. One party may end up having to make spousal or child support payments. Whichever way you look at, getting divorced is expensive and both parties can end up with serious financial consequences.

    If you are getting a divorce and debt is present, seeking financial guidance will be very important. The financial guidance you need may vary.

    Perhaps you are not the spouse who was responsible for the monthly household bills. Learning how to manage a budget will be important if you want to come out of your divorce with your credit and finances intact. Budgeting is eye opening because it reveals exactly how much money you spend each month and on what, as well as how much disposable income you have left once your bills are paid. Budgeting can reveal potential future financial problems that you may face before they emerge and become an emergency. Budgeting also plays a key role in ensuring that all payments to creditors get made on time each month.

    Perhaps you are exiting the marriage in debt. This is a trickier problem because if you have gone through a divorce and the debt that remains is unmanageable, this can impact not only your credit but also your quality of life. Even if you are able to manage your minimum monthly payments, the overall amount of debt may be too much to pay off in any reasonable amount of time. If this is the case, it may be time to come up with ideas to speed up the amount of time it takes you to get out of debt.

    The type of debt that you have and amount of debt that you have will play a major role in the type of financial solution that you choose to deal with your debt. Secured debt is different than unsecured debt, and even some secured debts can be managed as part of an overall financial plan that will get you out of debt. If you are struggling with debt after a divorce, your financial plan may include consolidating your monthly payments into one and freezing the interest on your credit products. The interest on some credit products, like high interest credit cards, can make them impossible to pay off. Once the interest is frozen, these debts become much easier to repay. Some financial programs also may involve reducing the overall principal of the debt that you owe.

    The best thing you can do in the aftermath of a divorce to deal with the debt that has resulted from the divorce is to seek financial guidance from a financial professional who can represent you in the restructuring of your debt to give you a fresh start.

    For more information about divorce and debt please visit www.debtcare.ca or call 416-907-2582.

  • Dealing with Debt Part 1 – Collections Debt in Canada

    Many people have collections debt in Canada. Collection agencies are routinely hired by private businesses to collect money from individuals who have defaulted. When a company assigns an account to a collection agency, the collection agency will add their fees and additional interest to the debt which will cause the debt to grow at a rapid pace.

    Some collection agencies will use tactics, like calling you several times daily at home and work to collect money from you, while others may have been authorized by your creditor to take Small Claims Court action against you. Collection agencies can also file a “collection item” on your credit report which will do considerable harm to your credit; however if you have defaulted on a loan or credit card, the damage to your credit may have already been done. Any way you look at it, dealing with collections debt in Canada is no fun.

    Conventional debts like loans and credit card balances are not the only types of debt that get assigned to collection agencies. If you default on a debt to a utility provider, default on a phone bill, gym membership, toll bill, traffic fines all of these are examples of debt that may be assigned to collection agencies to be collected.

    The good news is collection agencies in Canada are regulated in most Provinces. This means you have rights! In Ontario for example, the Ministry of Consumer Services regulates collection agencies through the administration of the “Collection Agencies Act”. You can view the Ontario Collection Agencies Act on the E-Laws website. If a collections debt in Canada has occurred and a collection agency is getting out of hand, you can complain to the Provincial Ministry that regulates it. Some Provinces will receive online complaints (as is the case in Ontario) while others will require that you mail them a letter and include evidence to support your complaint.

    If you have a collections debt in Canada it is likely because you are dealing poorly with debt. Rather than facing collection action, it is better to come up with a solution to deal with your debt and there are solutions available. There are a number of programs available that help people to deal with their debt and stop collection action. Dealing with debt can cause stress and strain to relationships and many people think that the only way to get out of debt is through personal bankruptcy. This is not the case. There are other solutions to dealing with debt that involve freezing the interest accumulating on your debt and also reducing the principal amount of debt that you owe.

    When you are dealing with debt the worst thing to do is ignore it. This will only prolong the length of time that your credit is damaged and the debt will not go away but will only continue to grow over time. The faster you deal with your debt, the faster you can work towards rebuilding your credit and finances and put the period in your life where your debt got out of control behind you.

    For more information about dealing with debt and collections debt in Canada please visit www.debtcare.ca or call 416-907-2582.

  • Debt Reductions Companies in Canada – Do Your Due Diligence

    When making a big ticket purchase like a vehicle, you do your research right? You check the history of the vehicle, ensure it has not been in accidents, learn about the ownership, check the maintenance record for the vehicle and more. Your personal finances are no different and if you are in financial trouble, before choosing a company to help you, you really should do the same kind of research.

    “The banks are offering a program that’s about to run out” or “time is running out on Federal Government Programs”; sound familiar? Debt reduction companies are spending hundreds of thousands of dollars on advertising per/year to sell you on this message. The question is; is it true? And do they “really” help? Is there really a program that all of the banks collaborated on and is time running out? Is it true that the Federal Government programs that help Canadians get out of debt could end in the near future? And…what do they do anyway? Let’s get to the bottom of it.

    First of all; all of the banks have not gotten together to offer a debt reduction program, hence time is not running out; because it simply isn’t true. The only Federal Government programs that help Canadians deal with debt are administered under the Bankruptcy and Insolvency Act (BIA). The Federal Government has made no announcement that there is a plan to eliminate the BIA legislation and there is no other Federal Government program that we are aware of that helps Canadians get immediate, legislated, debt relief. Seeking debt relief under the BIA does not mean that you have to go bankrupt and Federal Government programs are a viable means to get out of debt when a financial crisis emerges. The BIA offers different remedies to deal with debt, but the principal program offered by debt reduction companies doesn’t even involve relief under the BIA.

    Debt reduction companies collect money from you on a monthly basis over a period of years with a promise that in the future they will settle your debt. By way of contrast, debt consulting companies represent you and provide you with a range of options to deal with debt that could include a consolidation or even enrolment in a credit counselling or Federal Government program. Debt reduction companies have one primary goal and that is to collect your money on a monthly basis. This is where the money that they use to advertise to you comes from. The Financial Consumer Agency of Canada (FCAC) recently issued a consumer alert about debt reduction companies; you can view the alert here http://news.gc.ca/web/article-eng.do?nid=649969.

    Before you deal with a debt reduction company, do your due diligence. While writing this article we took some simple steps that any consumer who has access to a computer can take to research a company; the results really scared us.

    We visited the first debt reduction company’s website and there were many red flags. First, there wasn’t any information about the company’s ownership. Are they Canadian? American? Who is their president and what does he or she stand for. The company publishes no information about their ownership whatsoever. Red flag #1!

    We Googled “who owns [company name]” and nothing came up. Red flag #2!

    We went to Linkedin and ran a search by company name to see how many professionals on Linkedin are employees of the debt reduction company. The only profile that came up was an individual page branded for the company – not one employee and not a single name of anyone associated with this company emerged as a result. You would expect that a company that bills itself as a national provider of debt reduction services would have at least one employee with a profile on Linkedin; the world’s largest professional networking site. We would liken this to you not knowing a single person who has a Facebook account. Red flag #3!

    Finally, we searched “[company name] reviews” and on the first 3 pages of Google we found no less than 6 pages by companies who represent people and individuals themselves who reported very serious claims about this debt reduction company. Red Flag #4!

    Don’t believe everything you hear! Ads are paid for by the advertisers, companies pay the BBB to be members and any company who doesn’t wilfully and publicly provide information about their corporate structure and ownership, may not be a company you should commit to paying hundreds of dollars per/month for years to come.  When it comes to debt reduction companies do your due diligence.

    For more information about debt reduction companies and how you can do your due diligence please call DebtCare Canada at 416-907-2582 or visit www.debtcare.ca