Would You Go on Trial for Murder Without a Lawyer? Dealing with Debt

Would you go on trial for murder without a lawyer? We think it is safe to assume that the answer is no! Why? Because the stakes are high and the Crown attorney is a professional appointed by the Attorney General/Minister of Justice to enforce the law. Little old you can’t go up against a trained, seasoned trial lawyer!

If you wouldn’t go on trial without a legal representative, why in the world would you ever go to a Trustee in Bankruptcy to seek help with your debt without financial representation?

Like a Crown attorney, a Trustee in Bankruptcy is an officer appointed by a government official. Their duty is to administer bankruptcies and proposals under the Bankruptcy and Insolvency Act. Part of that duty is to ensure that your creditors get the fairest possible financial outcome.

The law itself protects people when filing a bankruptcy or proposal, not the Trustee in Bankruptcy – they are simply administering legislation. While many advertise the benefits of contacting them about a bankruptcy or proposal, the law itself sets the stage for the benefits while the Trustee simply administers the process you are legally entitled to.

Part of this process means evaluating your assets, investments, income and liabilities and determining how much money your creditors receive. In instances of consumer proposals, the Trustee receives payment based on a percentage of the proposal. Some have questioned whether this model poses a conflict of interest because a larger proposal = a larger fee.

Also important is the fact that different Trustees administer files differently. While some deploy due diligence to verify the information in your application at the sign up stage, some have administration departments that do so after the fact. It is not uncommon, after a bankruptcy, for the bankrupt to receive communication from the Trustee that some information was incorrectly disclosed, meaning that you owe surplus income in your bankruptcy or that something that you thought would be protected won’t be!

Where your financial future is concerned, the stakes are too high and that is why you should never go to a Trustee unrepresented. Do you need a lawyer? No, but you definitely need an experienced financial professional to guide you through the bankruptcy or consumer proposal process.

Why is this different? Because you pay this professional directly! They are hired to represent and counsel you. Part of this counsel means working with you to structure your financial information and even bring it forward to a Trustee on your behalf. They will help you make sure that there are no holes in your application or unnecessary information that could cause you problems.

If you are thinking about a bankruptcy or consumer proposal, do your due diligence. Both are effective solutions for dealing with debt, you just want to ensure that you end up with the fairest possible terms.

For more about effective representation in the bankruptcy or consumer proposal process please contact DebtCare Canada today by calling 1-888-890-0888.

Who Is Spending? Canadian Household Debt

Canadian consumer debt has continued to rise over the last few months, and although the delinquency rate has dropped, the spending has not. But since the delinquency rate has dropped, that means that individuals are more conscious of the need to keep up with paying off Canadian household debt – which is always a good thing.

So who is spending, who is responsible for dealing with household debt, and how do Canadians feel about their retirement financials? Check out this great infographic “He Debt, She Debt.”

According to the survey, both men and women say debt repayment should be a top priority, but there were a few interesting findings:

• Who is responsible for household debt?

• It is equal: 39% men vs. 54% women
• Me or mostly me: 56% men vs. 36% women
• My partner or mostly my partner: 4% men vs. 10% women
• Are you confident you’ll be debt-free at retirement?
• 55% of men and 49% of women said yes
• Do you find the idea of retiring with debt stressful?
• 60% of women and 42% of men said yes

Where do you stand as far as these survey results? Are you the big spender in your household? Do you feel as though retiring without debt is a feasible achievement?

If Canadian household debt seems to be a stressor, no matter who is responsible, or if you feel like retiring without debt might be an impossible goal, please call DebtCare Canada today. We can help you deal with your debt problem and get you back on a firm financial footing: 1-888-890-0888.

Tips for Dealing with Debt Over the Holiday Season

The holidays should be time to relax, enjoy time with family and friends, and eat far too much delicious food – but for far too many of us, this time of year is also accompanied by a biting anxiety when you think about the amount of money being spent. For those individuals with debt, holiday spending can be a major stress inducer – so we’ve developed a list of easy to implement tips to help with dealing with debt over the holidays.

Tips for dealing with debt over the holidays:

First off, set a holiday budget and keep track of what you spend. Establishing a budget is the best way to ensure that you don’t overspend. Have several people to buy for? Divide that budget into envelopes and take those with you when you shop – once an envelope is empty you are finished with that person.

Start a Secret Santa tradition. Instead of buying for all of the adults in your family, draw names and set a budget and each person buys only for one person – this can seriously cut costs.

Shop with a list. This can help curb over-spending if you stick to the list rather than buying everything that you see and think others will love.

Shop early. You still have a few weeks before you have to give those gifts, so get started right now. This also helps to give you time to price match, ensuring everything you want is in stock. And when shopping early, take the time to look for sales and discounts.

Get creative. If you have the time and the imagination you can save a ton of money by making gifts rather than buying them. Take advantage of Pinterest for great gift ideas that you can make yourself – you might even find some great ideas and suggestions on saving money in other ways.

Remember: many of us start out with good intentions –buying everything with credits cards with the intention of paying these cards off as soon as the holidays are over – but this isn’t usually what happens and many individuals find themselves paying for their holiday spending months into the New Year. Don’t let the holidays = huge credit card debt.

Dealing with debt during the holidays can be a challenge, especially if you are already struggling financially, but these tips may just help you keep things in perspective and stop you from going overboard.

For more about dealing with debt, whether during the holidays or at any time during the year, please contact DebtCare Canada for tips that you can use any time: 1-888-890-0888.

The Challenges of Dealing with Debt Through a Divorce

In Canada, divorce is one of the biggest causes of debt, and debt is one of the biggest causes of divorce. No matter how you look at it, financial strain wreaks havoc on your life in a number of different ways.

When you separate, and go from a 2 income household to a 1 income household, it can become incredibly difficult to navigate this change in your financial situation. Maintaining a hold on your current debt load, meeting minimum payments, even establishing and sticking to a realistic budget can be really tough.

Check out this video of DebtCare’s own Pam Shimmerman, our financial restructuring specialist. With a legal background, Pam has helped countless individuals deal with the debt that comes from divorce.

One of the best things that you can do once a divorce is initiated is to take a detailed look at your household income and expenses, as well as your current debt load and future financial goals. Working through these items with a financial specialist can help ensure stability and can help you to achieve your financial goals.

If you are in the midst of a divorce and would like some help dealing with the financial repercussions, please contact Pam for a free consultation. You don’t have to do it alone. Please call 1-888-890-0888 or email Pam directly at pshimmerman@debtcare.ca.

 

Filing a Consumer Proposal in Ontario - What you SHOULD know

If you are thinking about filing a consumer proposal in Ontario there is a lot that you should know. Filing a consumer proposal can be a sound option for dealing with debt depending on your personal circumstances. When making a consumer proposal you are essentially making an offer to your creditors under the laws and regulations set out in the Bankruptcy and Insolvency Act (BIA). The BIA is federal legislation so the process to file a consumer proposal is the same whether you are filing a consumer proposal in Ontario or BC. 

Here is how the process works:

1.       The amount of the consumer proposal is determined using a formula based on your income and ability to repay the proposal on a monthly basis, and then that payment is multiplied by a term of 4-5 years. The sum is the amount of the proposal. This can result in the debt being reduced.

2.       Once the consumer proposal offer has been formulated, the official offer is made through a trustee in bankruptcy.

3.       Your creditors then have 30 days to accept or reject the proposal. As long as creditors that represent 51% of the debt in your proposal vote yes, the proposal is accepted. Creditors who do not respond or vote lose their vote and go on record as not opposing the consumer proposal.

4.       If your consumer proposal is accepted (and many are) you will then make a single monthly payment to the bankruptcy trustee for the term of the consumer proposal.

 Consumer proposals offer many benefits:

·         They can be paid off early so if your financial situation improves you can pay off the proposal at any time.

·         While the consumer proposal will have a short term negative impact on your credit report, the consumer proposal is removed from your credit report 3 years from the date it is paid in full, so the sooner you pay it off, the sooner you can rebuild your credit – the ball is literally in your court.

·         They stop collection action. All collection action with respect to unsecured creditors included in the consumer proposal will stop. This includes wage garnishments.

·         They offer a single monthly payment which is very convenient. 

Now that we have covered how a consumer proposal works and the benefits, let's look a little bit closer at the process of actually filing a consumer proposal in Ontario. 

Consumer proposals are administered by a trustee in bankruptcy. The trustee in bankruptcy has an obligation to act both in the best interest of yourself and your creditors. Going to a trustee in bankruptcy directly to discuss a consumer proposal is dangerous because they will probe you and use your financial information to pay your creditors the maximum monthly payment. This leaves many without much financial breathing room which is why many consumer proposals fail. Trustees are also compensated based on a percentage of your proposal. A larger proposal means more compensation for the trustee. It is for these reasons that you should seek out your own independent financial representation if you plan to file a consumer proposal. 

Hiring your own representative is a small expense that can save you thousands of dollars. A good financial consultant who is versed in the BIA can look at your financial picture and help you to craft proposal terms to push with the trustee. They can also arrange the proposal with the trustee and represent you throughout the process. This is money well spent! 

If you would like more information about filing a consumer proposal in Ontario please call DebtCare at 1-888-890-0888 or visit www.debtcare.ca.

Dealing with Debt Part 4 – Income Tax Debt in Canada

Many, many Canadians struggle with income tax debt in Canada. Income tax debt in Canada can occur for many reasons, many of which were not intentional on the part of the taxpayer. Sometimes a taxpayer earns more than he or she expects, not realizing the tax implication. Other times taxpayers unwittingly declare expenses they are not entitled to. Once a tax return is filed later or re-assessed resulting in an amount owing, the Canada Revenue Agency will add penalties and interest retroactive on this tax debt causing it to double and even triple in size. 

When a large income tax debt is owed to the Canada Revenue Agency it can be paralyzing. The Canada Revenue Agency will demand to be paid in full and has incredible authority and resources to collect the income tax debt from you. This can include freezing your bank account, placing a lien on your home or other assets, garnishing your wages and even criminal prosecution. Many people feel so overwhelmed when they have a tax debt that they simply ignore it because facing it is too stressful; but this is the worst thing to do because the Canada Revenue Agency will catch up eventually and the consequences will be catastrophic.

So what can a Canadian who has income tax debt in Canada do? The first thing is to realize that you have to deal with it and be pro-active instead of reactive. Waiting until the Canada Revenue Agency has taken collection action against you before dealing with the income tax debt will only result in major financial consequences that could disrupt your overall quality of life. When the Canada Revenue Agency does not have an enforcement measure in place you have more leverage because you are voluntarily dealing with the problem.

If you are behind in filing returns, get them filed. It is not illegal to owe money to the Canada Revenue Agency; failing to file is illegal and is tax evasion under the Income Tax Act. Yes, once you file your late returns you will owe penalties and interest but before you can truly deal with your income tax debt you must know how much you owe.

If you know that you have failed to declare income on a past tax return or written off expenses that you know you were not entitled to, consider filing a Voluntary Disclosure Application with the Canada Revenue Agency so that you can become tax compliant. Again, it is not illegal to owe money to the Canada Revenue Agency, but it is illegal to fail to disclose income and write off expenses that you were not entitled to.

If you do not have the liquidity to pay off your tax debt, get financial help. Work with a debt consultant to weigh your financial options. Income tax debt is like any other debt. There are Federal Government Programs in place to provide Canadians with a legal avenue to deal with their debt. These avenues in many cases do not involve bankruptcy and can stop Canada Revenue Agency collection action.

Do not do fancy footwork, transferring assets into the names of loved ones or attempt to hide your money. These efforts will be fruitless. Not only can you risk tangling your loved one up into your problem but you will also live a life fraught with worry wondering if tomorrow will be the day that the Canada Revenue Agency catches up with you.

Remember, you are not the first Canadian who has a tax problem and you will not be the last. There are solutions and all you have to do is take the first step towards them.

For more information about dealing with debt or to get help with income tax debt in Canada please visit www.debtcare.ca or call 416-907-2582.

Dealing with Debt Part 3 – Divorce Debt in Canada

Canada has the 8th highest divorce rate in the world. Human Resources Development Canada has reported that the proportion of marriages expected to end in divorce has fluctuated between 35% and 42% in recent years. In 2008, 40.7% of marriages were expected to end in divorce before the 30th wedding anniversary. In 2008, there were 70,226 divorces in Canada or 2.11 divorces per 1,000 people. 

Divorce debt in Canada is also very common. Human Resources Development Canada also reported that in 2008, 115,789 Canadians were unable to repay their debts. Serious financial difficulties brought them to file either a consumer proposal or a bankruptcy. Individuals who were divorced or separated were more likely to file a proposal or bankruptcy.

Why is divorce debt one of the leading causes on bankruptcy in Canada? The answer is fairly simple. First, two income households will often accumulate debt based on their “household ability to pay the debt”. The challenge with this is that debt is accumulated based on two people sharing living expenses and when people separate, living expenses will double because now each party has to pay for rent or a mortgage, and living expenses separately. When household debt is present this can make it challenging to pay it.

Second, some marriages will involve one person working and one person raising the family. When divorce occurs, the party who hasn’t worked will likely have little to no income but be faced with the immediate expense of having to hire a lawyer and also live. In many cases this forces the party who has been home raising the family back into the workforce. Individuals who have been out of the workforce for a long time often have to re-enter the workforce in junior or entry level positions.

Third, sometimes one party in a marriage may carry all of the debt in his or her name. Much of the debt may have been used by the other spouse. There is nothing worse than getting a divorce and then finding yourself having to pay your spouse's debt.

Legal protections may result in the party who has the weaker financial positioning receiving support payments, being awarded the house, having the other party take responsibility for the debt, but this can take years. Also, the legal fees that compound over the course of a divorce may end up being more than the debt you owed to begin with.

So how can someone in Canada who has divorce debt keep his or her head above water without filing for bankruptcy? Fortunately, if you are in this situation there is a solution and believe me you are not alone. There are financial programs for people dealing with debt and specifically dealing with divorce debt in Canada. These programs will often enable you to make a satisfactory arrangement with your creditors and will enable you to consolidate your debt payments into a single reduced monthly payment. These programs can be found through debt consultants who specialize in divorce debt in Canada.

It is important if you are dealing with divorce debt to make responsible decisions that protect yourself and your family and also consider both your short term circumstances and long term goals.

For more information about dealing with debt or to get help with divorce debt in Canada please visit www.debtcare.ca or call 416-907-2582.

Dealing with Debt Part 2 – Gambling Debt in Canada

Gambling debt in Canada is an epidemic not unlike the Flu. If you have a gambling debt in Canada, don’t get down on yourself. Addiction is an illness and gambling is something that is highly addictive. Casinos are more accessible than ever in Canada and the euphoria that is felt when you win can cause what would seem like harmless entertainment to turn into a serious life altering addiction. 

Many people realize that they have a problem when gambling habits lead to disruption in major parts of their lives. Financially, problem gambling can lead to a loss of income, potential loss of assets, lowered standard of living, or even a loss of employment. Personally, problem gambling can cause conflict with loved ones, and can lead to alienation from family and friends.

Problem gambling can also impact your health. You can experience a number of health effects, including high blood pressure, digestive problems, stress and anxiety, depression and suicidal thoughts.

CTV News recently reported on a study from Statistics Canada that showed that wealthier people, on average, spend more money on wagering, but gamblers who have less money spend a larger percentage of their income on gaming activities.

According to the CTV report, Statistics Canada says that 6.3 percent of people are thought to be "at risk gamblers and problem gamblers." Problem gamblers make up 0.6 percent of the Canadian population which is roughly 180,000 people. The Statistics Canada definition of a problem gambler is someone who has experienced negative consequences of gaming and who gambles more than five times a year.

People who gamble responsibly:

·         Do so for entertainment rather than income.

·         Balance their participation with other activities.

·         Do not gamble alone.

·         Accept losses as the cost of the entertainment.

·         Set a realistic budget and stick to it.

·         Don't borrow money to gamble.

·         Set a time limit for gambling.

·         Take breaks from gambling.

If you have gone into debt in order to gamble you have a problem and you have to stand up against it. You are truly putting yourself in a position where you could lose everything, if it hasn’t happened already. There is a lot of support for people who have gambling debt in Canada. This support assists gamblers to deal with their addictions and the debt that they have accumulated as a result of the addiction.

Some steps that you can take are to join a support group like Gamblers Anonymous, consider excluding yourself from gambling using the Responsible Gaming Commissions self-exclusion tool and seek professional financial guidance immediately. Do not transfer assets in the names of loved ones or borrow more money on top of the money you may already owe. There are many financial programs available that help gamblers who are dealing with a gambling debt in Canada and you can access these programs though debt consultants who are skilled at dealing with situations like the one you may be in now.

If you are dealing with debt because of gambling you are not alone! Tens of thousands of Canadians are in your shoes and there is hope.

For more information about dealing with debt or how to get help with gambolling debt in Canada 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.

Dealing with Debt and Depression

Facing an insurmountable amount of debt can cause an incredible amount of stress and in some cases the stress can lead to depression. On the opposite end of the spectrum, stress and depression can cause individuals to stop paying their bills.

On EMedicineHealth.com, Dr. Roxanne Dryden-Edwards cites (amongst the most common causes of depression) situations like difficult life events, loss, change, or persistent stress.

Martha Manning (therapist and author of “Undercurrents”) describes depression this way: “Depression is such cruel punishment. There are no fevers, no rashes, and no blood tests to send people scurrying with concern. Just the slow erosion of the self, as insidious as any cancer”.

Major financial problems result in individuals not honouring their obligations to creditors (most people want to pay their bills) and having difficulties maintaining their standard of living and providing support to their families. Many people who own homes find themselves in this very situation.

Those who struggle with depression and have more bills than they have money sometimes try to ignore the problem, hoping that it will just go away. Debt will not go away by itself.

When debt goes into default and creditors start trying to collect their money, phone calls and letters can cause personal anguish and embarrassment at work. Even high income earners who accumulate an unmanageable amount of debt may feel like the financial problem cannot be overcome.

If you are feeling depressed about your debt, you will feel much better if you come up with a plan to deal with it. This will empower you to begin working your way out of your financial situation. The first things to consider are:

1. How much in unsecured debts have you accumulated?

2. Have you badly damaged your credit?

3. Do you have the ability to make your minimum monthly payments?

If the answer to question number one is “more than $8,000”, the answer to question number two is “yes”, the answer to question number three is “no” and you know you have equity in assets, you may be relieved to hear that you could achieve immediate debt relief through a Federal Government program.

If you still have decent credit and some income, you may have other options to deal with your debt. Even when experiencing a financial crisis, it makes the most sense to speak with a Financial Advisor about your options.

You see, no matter how bad things may appear to be, there is almost always a solution. Many debt solutions enable individuals to get out of debt by creating a single and manageable monthly payment. This monthly payment is affordable and helps protect assets like your home and car.

Just as debt does not go away by itself, in many cases depression doesn’t either. Remember that your health and happiness come first so make it a priority to take care of it. There are more resources than ever for individuals who are battling depression. CAMH offers an abundance of resources and information. You can also speak with your family doctor and ask for a referral to a therapist.

If you would like more information about dealing with debt and depression, please contact Michael Goldenberg at DebtCare by calling 1 (888) 890-0888 or by visiting http://www.debtcare.ca/