Ontario Bankruptcy Trustees – Who They Are and How They Advertise!

Debt consolidation, get out of debt, debt relief: it is hard to turn on the radio or television these days and not hear one or all of these phrases. Why? Because so many Canadians are facing financial challenges thanks to the ease with which credit is granted coupled with high (credit card) interest. The temptation to pay on credit can quickly lead to getting in over your head, and then struggling to find a solution.

When it comes down to it, the question is, who advertises these solutions and what do they do?

Ontario bankruptcy trustees, more aggressively now than ever before, are advertising to the public that they offer the best solution for people facing financial woes. We disagree with much of the advertising we hear from many Ontario Bankruptcy Trustees. Why? Because we exist because of them!

Ontario bankruptcy trustees promote financial solutions. However, if you choose the solutions offered, the Ontario bankruptcy trustee does not represent you.  A bankruptcy trustee in Canada is a court appointed officer who administers estates when a bankruptcy or consumer proposal is filed. They do not represent you, they do not represent your creditors. They apply rules set out in the Bankruptcy and Insolvency Act. The trustee is required to represent the best interests of all parties (and this includes their own financial interests).

What does this mean? Well, trustees are paid a tariff out of the proceeds of your bankruptcy or consumer proposal. In the case of bankruptcy the fee is fixed, whereas with a consumer proposal the fee grows with the amount of the proposal.

Some things to know:

·         Trustees advertise to you, despite the fact that they don’t represent you - this is because without you, they have no business.

·         In the case of bankruptcy, finding surplus income means that they can extend your bankruptcy and collect larger tariffs because the bankruptcy is being administered for a longer period of time.

·         In the case of consumer proposals, convincing you to propose a higher amount to your creditors will result in the collection of more fees - and thus is a major priority for them.

Now, of course a few bad apples shouldn’t spoil the whole bunch, and we don’t mean to say that all trustees are shady. Many trustees in bankruptcy are reputable and do business above board - but the few that don’t can do a lot of damage. There are just too many conflicts of interest and the law needs to go further in terms of requiring trustees to state in their advertising that while they are promoting a service they don’t represent you.

A consumer proposal or bankruptcy is often a really good financial solution for someone backed into a corner. These allow for one monthly payment, can reduce debt, stop interest, and stop collections. Just keep in mind, just as you wouldn’t go to a meeting at the CRA without your accountant, you shouldn’t go to a trustee without your own independent financial representation.

Financial counsellors who specialize in bankruptcy and proposals can structure the numbers, review your information, make recommendations, and bring a proposal forward to a trustee on your behalf- protecting you throughout the entire process.

DebtCare Canada represents your best interests - yours and yours alone. Call us today BEFORE contacting a trustee:  1-888-890-0888.

Making Your House Work For You: Mortgage Refinancing to Get Out of Debt

Debt: that one little word that elicits a number of intense feelings, usually all of which are negative. Debt is a fact of life, and unless you have been incredibly financially savvy and have managed to curb any spending that is outside your monthly intake, you are likely in some sort of debt. This may be manageable (automotive financing or a mortgage) or it could be overwhelming (numerous credit cards, personal loans, etc.). If you are in the latter position, ignoring a debt is the quickest way to get into further financial trouble.

Wait. Stop letting that debt rule your life – it doesn’t have to, and letting it continue to do so will likely only make matters worse. You have some incredibly effective options available to you - one of which might be mortgage refinancing.

Mortgage refinancing: simply put, mortgage refinancing involves swapping out an old mortgage for a new one (hopefully better), and then paying off the old loan with the new one. It is different from a second mortgage because, as mentioned, you are essentially paying off the first mortgage in full.

If you are considering mortgage refinancing as a means to get out of debt, here are some important things to remember:

1.      You have to own a home to do this (obviously). Since you are increasing the lending limit on your current mortgage, a mortgage needs to exist in order to apply. You cannot obtain a new mortgage strictly to consolidate debt – to do this you need a personal loan or line of credit. 

2.      Your credit needs to be in good standing. If you are maxed out or have several missed payments, and as a result your credit score is low and your report reflects this, your lending institution isn’t necessarily going to have much faith in your ability to repay your debt. 

3.      Canadian Mortgage and Housing Corporation guidelines have set the total refinancing limit for mortgages at 80% of a home’s value, so if, once your mortgage is refinanced, you would owe more than 80% of that value, a total consolidation of your debts will not be possible. 

Considered these caveats and still think mortgage refinancing might be an intelligent route? That is great – now what? Your best choice is to visit a debt solutions specialist to discuss the process, one who can assist you in applying and eventually getting your finances back on track.

If mortgage financing isn’t an option for you, that same debt specialist can sit down with you and discuss the other options available – you don’t have to do this alone. 

For more about mortgage refinancing or to learn about the various debt relief solutions out there, please contact DebtCare Canada today by calling 1-888-890-0888.

Know the Difference: Secured Versus Unsecured Debt

In the world of finance, there are so many different types of debt that it can be really tough to wrap your head around those differences. Furthermore, when you find yourself struggling to make the minimum payments or trying diligently to get out of debt those subtle differences can be easy to ignore.  In an effort to help you make some sense of those differences, we thought we’d take the time to explain two of the most common types, secured and unsecured debt, and what those differences mean to you.

Secured Debt: When a debt is secured, this means that an asset has been used as collateral when borrowing the money. This gives the lender more security and reduces his/her risk against default.

When you take out a secured debt, but fail to make payments on it, the lender then has a recourse to secure the money owed (usually that means selling that asset to recover the losses).
For most people, the largest secured loan is a mortgage. When you take out a mortgage, this loan is secured by the house itself. However, there are several other types of common secured debts, including car loans or loans secured by investments (i.e. property).

In bankruptcy, most secured loans are not released, meaning they are not covered by the bankruptcy contract, and thus if you claim bankruptcy these are not included in the term or payments.

Unsecured Debt: When a debt is unsecured, this typically means that there is no security behind a loan, and thus the lender runs a higher risk of not recovering their money if you default on a loan.  Since there is more risk, this usually means that the interest rate on unsecured debt is significantly higher than secured debt.

There are several types of unsecured debt, but the most common is credit card debt. Other types include student loans, payday loans, or other bills (i.e. utilities).

Unlike a secured debt where your creditor can just use the collateral to recoup their losses, with unsecured debt this is not an option. However, they may use other avenues, such as a collection agency, garnishing your wages, or placing a lien on your assets until you have paid off the debt.

In bankruptcy, these are the types of debts that are included, and thus wiped out in exchange for a
monthly payment in bankruptcy.

When you are in debt, it usually makes sense to pay off more of those secured debts first because there is often more to lose if you default on these. However, when looking to make larger than minimum payments, start with the unsecured debts because they often carry much higher interest rates.

For more about secured vs. unsecured debt, and how to prioritize when trying to get out of debt, please contact DebtCare Canada today by calling 1-888-890-0888.

Take Action to Get Out of Debt: Tips and Tricks

Debt free: a highly attractive yet increasingly unattainable lifestyle for the average Canadian. No matter how you slice it, consumer debt has become a major problem for many individuals, and whether as a result of job loss, divorce, student debt, or just overzealous spending, many now find themselves trying to dig themselves out of a fair-sized financial hole that often seems more like a bottomless pit.

Ok, wait. We are not just going to saddle you with negatives and not offer some useful advice. We are, after all, here to help. So, with that in mind, here is a realistic list of tips to help you get back on the road to financial freedom.

1.      Make a monthly budget. We absolutely cannot stress this enough. It is the best, really the only, place to start when it comes to ways to get out of debt. Once you realize how much you take in each month, and compare it to how much you spend, you will actually have a better idea where your money is going, and how you can decrease certain amounts. And be realistic – don’t attempt to cut out all spending – no one can do that.

2.      Stick to that budget. Become a savvy shopper and curb needless spending whenever and wherever possible. Look for sales whenever possible and take advantage of money saving incentives.

3.      Stop paying just the minimum payments. Take any money saved thanks to your new budget and put it all on those debts. Since most minimum payments on credit cards are interest, making the minimum payment really is making the minimum payment. Give as much as you can to those creditors.

4.      Work on those high interest credit cards. When you are overwhelmed with credit card debt and trying to decide which debts to eliminate first, always take a look at interest. If one card is 15% interest and another is 25%, think about how much money you are contributing to the principal and how much is just empty interest.

5.      Seek out some debt help. Once you have tried to implement the above changes, but feel as though you are still left in a precarious financial position, it might be time to seek some professional assistance. An organization that can offer you various options to get out of debt might be your best solution.

Stop struggling and start swimming above water. It can often seem impossible to get out of debt if you are drowning, so start with these 5 tips and see just how far diligence can take you.

For more tips or for help getting out of debt please contact DebtCare today by calling 1-888-890-0888.

DebtCare’s Karen Goldenberg Made a Member of the Order of Canada

 

DebtCare is proud to announce that our own Karen Goldenberg, C.M., Director of Community Outreach at DebtCare Canada, has been made a Member of the Order of Canada. This prestigious award  recognizes a lifetime of achievement and commitment, and Karen’s work in developing the DebtCare public education program and our community outreach initiatives has been a great source of pride for the entire DebtCare family. Congratulations Karen!

Get Out of Debt: Five Easy Steps to Get You Started

We’ve all heard that myth that dreaming about your teeth falling out means you’re worried about money – but what if Mr. Sandman leaves you checking your teeth every single morning? If money is all you can think about, it might be time to make some changes. Want to get out of debt but just not sure where to start? We can help. Here are 5 tips to help get you started!

1.      Create a budget and track spending. If you don’t know what you owe, or where your money is going, you can’t realistically make a plan to get out of debt. Inventory your debt totals, create a realistic budget and track your monthly spending in order to motivate and eliminate.

2.      Pay more than the minimums. When your credit card bill comes and your minimum payment required is $50, that doesn’t mean that $50 will be taken from your total owing. The majority of this total goes right to interest, so stop paying only the minimum on your credit cards and pump up those payments as much as you can! 

3.      Stop spending. Sure, this may seem like common sense, but unless you actually do it you are not fixing anything. Look back at that tracker and identify areas that could benefit from a slash. Or, if you can’t seem to resist temptation, get rid of that credit card, take it out of your wallet, or find another effective way to stop using it!

4.      Get debt help. Worried that you can’t tackle your debt on your own? You don’t have to. Dealing with debt can be tough, so why not research and get in touch with a reputable, professional debt management firm. There you can get advice on debt relief or find out more about solutions to actually get rid of the money owed. 

5.      Stay focused. Don’t just say you are going to get out of debt – do it. Stay focused on the end goal, not on how tough it is to get there –most good things don’t come easy! Use your monthly tracker (and those decreasing numbers) as motivation!

Get your debt under control and eliminate your financial stress with these tips. Take it one step at a time and that mountain will soon become a molehill!

For more debt reduction tips please contact DebtCare Canada by calling 1 (888) 890-0888 or visit us online at www.debtcare.ca   

Personal Financial Improvement: How to Rebuild Credit in 3 Simple Steps

Getting 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

The 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.

 

Is the Big Bad Wolf Calling?

This funny little video created by DebtCare highlights how Canadians with financial problems feel when trying to deal with creditors and collection agencies. DebtCare Canada helps people who want to stop collection calls and get out of debt. To find out more visit www.debtcare.ca or call 1-888-890-0888.

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.

Get Out of Debt and Get Debt Relief before the Holidays and Start the New Year on Fresh Footing

With the holiday season quickly approaching, it may seem that everywhere you look there is a holiday offer or enticing deal. Holiday shopping can be fun but also dangerous, especially when your plan is to finance it using your credit cards.

Every year consumers approach the holidays already in debt and dig themselves into a deeper hole during the holiday season thereby facing huge credit card bills in the New Year. Those who have already maxed out credit cards and are barely able to make minimum payments, may be wondering how they are going to finance this holiday season at all.

Believe it or not, while the holidays are a time to enjoy with family, it can also be the source of immense financial and emotional stress, especially as it relates to debt. Instead of adding to your personal debt this holiday season, why not go into this holiday season with a strong financial plan to get out of debt?

The primary reason that families go into debt over the holidays is because of a lack of cash flow. Let’s face it, the recession in 2008 has caused many families to rack up personal credit that they are still trying to pay for today. If you are approaching this holiday season with more than $10,000 in household debt, then finding a solution to get out of debt and get debt relief should be your first priority.

Dealing with your debt before the holidays will not only free up cash flow but will also enable you to go into the New Year on fresh footing. You may have already gone to your bank for a debt consolidation loan, only to be turned down. You may be thinking that there isn’t a way to get debt relief before the holidays.

Your bank is not the only option available to consolidate and eliminate your debt. There are many options available to achieve debt relief, however, the key is to choose an option that best considers your entire financial situation and results in the best deal for you. This can be tough when you are out there on your own struggling to find the answer to get out of debt.

It is easy to procrastinate, thinking that you can deal with your debt in the New Year, but can you imagine starting 2012 without a landslide of credit card bills to deal with? Strong financial planning, budgeting and access to resources that help you achieve your financial goals will enable you to start the New Year stress free and with more cash in your pocket.

Banks, trustees in bankruptcy, credit counsellors and finance companies will offer “free financial assessments or consultations” as a gimmick to bait you into their offices, at which point they will offer you their financial products and services. This will often result in more debt, a bankruptcy or a financial arrangement that favours your creditors. There is unbiased financial help available to help you get out of debt and get relief before the holidays. The kind of help that doesn’t involve more debt or bankruptcy. For more information about how you can get out of debt and get debt relief before the holidays visit www.debtcare.ca or call 416 907-2582. This holiday season get financial help from an organization who represents you, not your creditors!