Monday, 23 December 2013

Investment Advisors: Keep Clients’ Investments Protected with a Debt Management Company

As a financial or investment advisor your clients look to you for protection: to protect their family in the event of a death, to protect their wealth, to protect themselves when the time comes to retire and more…  You are often the first person that a client will turn to in good times and bad. Sometimes people fall on hard financial times. A divorce, a job loss or even taking a tumble in the stock market can see someone who was otherwise on solid financial footing finding it difficult to make ends meet. 

Most people want to do the right thing! They want to pay their bills, provide for their families and no one wants to make tough financial choices when they fall on hard times.

Unfortunately, sometimes difficult financial times lead people to make the wrong financial choices. All too often we see people who have a tax problem or excessive debts owed to creditors coming to us after they have liquidated their investments, giving all their money to their creditors in an effort to pay their obligations – yet they still find themselves owing more than they can pay, leading them to file a consumer proposal.

The challenge with this is that most people don’t know that even in a consumer proposal many of their assets like their home, vehicle and yes some investments like RRSPs can be legally protected.

Oftentimes people see a consumer proposal as a last resort – when really it is a viable option for getting out of debt that leads to quick recovery times where credit is concerned. If you have a client with financial problems the best thing to do is get them an unbiased financial evaluation from a financial consultant that specializes in consumer proposals. This way all options can be presented and strong contingency plans can be put in place which will better protect your client in the long run.

Another common occurrence is financial and investment advisors who don’t understand insolvency and submit their clients right into the clutches of a trustee in bankruptcy. This could be a big mistake. When you send your client directly to a trustee, your client is not the trustee’s client – they actually represent the interests of your client’s creditors. With that said, without your client they would not be in business so there is a high motivation to make your client feel secure and sell their services. While they may make your client feel secure at the time that they sign on the dotted line it doesn’t mean your client is safe, and the story at the time of signing can change later.

Financial consultants offer a wide range of financial services so they can present all options. Forging a strong relationship with a good financial consultant who specializes in consumer proposals will provide you and your clients with huge value in the long run.
For more information about how financial consultants can help you to protect your clients please call Michael Goldenberg at DebtCare at 416-907-2582 or visit

Monday, 16 December 2013

Don’t Be Fooled: The Truth About Pay Day Loans

In the world of credit, a payday loan has become an increasingly popular form of financial funding. The ease with which they can be obtained makes them seem attractive to many who need quick cash. The ability to walk into a payday loan location and walk out with cash can be very tempting – but beware. This week’s school for debt relief is all about the truth about pay day loans. 

What is a pay day loan? Pay day loans are those loans given by an institution that is not a bank, and are generally short term. They are called payday loans because the borrower typically borrows just enough money to get through to the next payday, at which time repayment is due. 

These are just short term loans, so what’s the harm? Well, when you take out a pay day loan you are agreeing to pay back the full amount in a very short period of time (usually by the time you next get paid), coupled with a fee that can range from 20 to up to 500 percent.  

Think about it this way: Let’s say your car breaks down and the total cost of the bill is $1000 (unfortunately a very common occurrence). However, your finances are tight right now so that $1000 is not readily available but you can’t get to work without your car. So you decide to go to a pay day loan company to borrow that $1000 for a period of 1 month. Let’s say that company charges $20 per $100 borrowed (a typical fee). That means that on top of the $1000 you owe $200 in fees. So, at the end of the loan period you owe $1200. Hmmm, if you didn’t have that extra $1000 at the beginning for the month, are you likely to have it at the end. So you roll it over, getting charged an extra $200 for a month’s extension…the loan doesn’t seem so small now, does it?

If you require a short term loan, initially pay day loans can seem very attractive. But once you have broken them down and added the fees and interest, it is clear why these credit products are less than beneficial, no matter how you look at it. Pay day loans should be avoided at all costs – their costs to you are just too high. 

If you have found yourself stuck in a pay day loan cycle and need help getting out please contact DebtCare Canada today by calling 1-888-890-0888.

Tuesday, 10 December 2013

Be in the Know: Checking and Understanding Your Credit Score

No matter the state of your finances, understanding your credit score is a very important part of keeping financially fit. This is especially important when you are dealing with debt or attempting to rebuild credit.  Not knowing what certain aspects of your credit score represent can lead to trouble acquiring credit products, or errors not reported can be incredibly difficult to deal with.

Understanding your credit score. Firstly, what is your credit score? This is the number applied by one of the major credit reporting agencies, derived from a complex calculation of your financial behaviour, most importantly your borrowing behaviour. This includes where you have borrowed from, how much you have borrowed, and your repayment habits. Credit products such as credit cards, personal loans, mortgages, car loans, even personal cell phone contracts are included in this calculation. 

So what does the score mean? When you (or a potential creditor) request your credit score, this is the number that represents those above calculations. Your number will be on a scale from 300 to 900. 300 is the lowest score, and represents credit that is in very poor standing. 900 is the highest score, and represent pristine credit behaviour. 

This is how national credit reporting agency Equifax ranks scores:

-        300-559 – poor
-        560-660 – fair
-        660-724 – good
-        725-759 – very good
-        760+ - excellent

Your credit score will fall into one of these 5 categories, and it is based partially on this number that a creditor will decide whether or not to extend credit to you.

What impacts your credit score? Anything that you do financially with regard to credit gets reported. This includes any new credit products you obtain, payments made and payments late or missed, any credit inquiries made both by you or a potential creditor, as well as any debt reduction strategies, including claiming bankruptcy or a consumer proposal.

Once you are better equipped to understand your credit score you might be concerned about what this number means. But don’t worry. If your credit score is less than stellar you should work on changing this – it just might mean seeking out some help. Getting rid of debt and ensuring that your monthly financial obligations are met – on time, every month – is a great place to start. Halting any further credit seeking is also a good idea.

Your credit score changes all the time, based on how you behave credit-wise, so be sure to keep that in mind. If you need help getting that number back up, or want help getting rid of your debt so that you can focus on increasing your score, consider working with a professional debt solutions company.

For more information about understanding your credit score and how to get it out of the red please contact DebtCare Canada today by calling 1-888-890-0888.

Tuesday, 3 December 2013

Debt Consolidation Through Mortgage Refinancing – The Right Choice for You?

With the consumer debt levels in Canada reaching all-time highs over the last few years, money (or perhaps a lack of money) has been a common topic of conversation. As a result, debt relief is also a common subject, and it seems that no matter where you turn these days, debt reduction is the topic of the day. And one of the debt reduction solutions that is becoming increasingly popular is mortgage refinancing. 

If you are in debt and considering refinancing your mortgage to get out of it, it might be a smart choice. Many homeowners struggling with debt see mortgage refinancing as an attractive option for various reasons. Firstly, mortgage interest is usually far lower than credit card interest (one of the main types of consumer debt) – sometimes by as much as 20%. By paying off one with the other you can end up saving a ton in interest. Secondly, this works to consolidate all of those different monthly payments into one neat, tidy sum – far easier to track and pay (only past balances though, not charges made after the consolidation). It is really no surprise that mortgage refinancing seems enticing, is it?

However, mortgage refinancing to consolidate debt isn’t the right option for everyone. Of course, if you don’t own a home, this option isn’t going to work for you. But even if you do, it may not work for several reasons. To begin with, Canadian Mortgage and Housing Corporation (CMHC) guidelines have made it more difficult than previously for homeowners to refinance. Changes to these guidelines mean that CMHC will only insure a refinance of up to 80% of a home’s value, so if your debt means that you will exceed this 80%, the option may not be the one for you. Furthermore, in order to find approval for mortgage refinancing your credit has to be in great shape. Anything less than pristine is usually an automatic no.

If you meet the requirements and can consolidate your debt by refinancing your mortgage, then by all means, get to it! As mentioned, for some people this is the most intelligent debt reduction strategy available. However, if you are worried that your current debts will exceed the maximum amount allowed by CMHC or if your credit is less than stellar, it might be time to consider some other options. A great place to start to discuss the various solutions that would exist – and how they would work for your unique circumstances – is a debt reduction company, one that has the experience and knowledge to help you get out of debt.

For more information about refinancing your mortgage for debt consolidation, or to find out about the other debt reduction strategies available, please contact DebtCare Canada today by calling 1-888-890-0888 or visit