How much is it really costing you? Credit cards and smart shopping.

When was the last time you put a purchase on your credit card? For most people making purchases on their credit cards is a daily, if not weekly, occurrence. So when was the last time you looked at the interest rate on your credit card? Or calculated how long it would take for you to pay off that purchase?

We often ask what makes a person choose when to call a Trustee for help with their debt. As Angela Lock, CIRP a Trustee in our Calgary office mentioned, “People tell me they are seeing these notes on their credit card statements of how long it will take them to pay the balance, and for most its shocking”.

Can you imagine buying an iPhone and having it take 2 years to pay it off? Assuming you put this purchase on your credit card, at 17% interest, that $859.00 iPhone would cost you an additional $300.

Most of us don’t think of these things when we are making purchases. Here are some tips to help keep you paying less in interest fees and keeping more in your pocket:

  • Do your homework. Find the best possible deals and make a list of the items you intend to purchase. Don’t purchase anything outside of this list.
  • Determine your budget before embarking on a shopping trip. Once you spend your budgeted amount, do not purchase anything else.
  • Whenever possible, spend using debit or cash – or if shopping online, set up a PayPal account where offered and make purchases using that instead of your credit card.

We have become a generation less accustomed to making purchases with cash and feeling the transaction of money leaving our hands, we have become reliant on the ease of ‘paying with plastic’ so being aware of our finances can get away from our immediate attention.

Putting off dealing with debt – missing payments, living paycheck to paycheck, transferring money around to deal with debts – can lead the problem to get worse and worse and get out of control. Taking the first step to seek out help can be the hardest step towards a fresh financial start. But by calling a licensed trustee you can get free financial advice or help with filing a consumer proposal which can reduce consumer debt by up to 75 percent.

Contact us to talk to a Trustee in Canada.

Visit us online:

AB: www.GT.Alger.ca                   
BC: www.GTdebt.ca   
ON: www.ThunderBayBankruptcy.com
NS: www.wedlakeinc.com



The oil and gas price wave in Alberta, preparing your finances for whatever happens

It’s been said that most people in Alberta are either working in the Oil and Gas industry or have someone close to them that does.

With oil prices plummeting to the lowest they’ve been since April 2009, many consumers are fretting over the health of the economy and job security. According to Statistic Canada, Alberta’s unemployment edged up to 4.7 per cent in December from 4.5 per cent the month previous. Shell Canada, one of Alberta’s largest oil projects, recently cut hundreds of jobs – striking fear into residents that more lay offs are to come. With this in mind, I thought you might be interested in a story looking at the impact on Albertans’ personal debt and expert tips on how to prevent consumers from falling into a financial crisis during this time.

When it comes to debt in Alberta, the province holds highest average household debt in Canada, sitting at $124,838 –nearly $50,000 more than the Canadian average. A recent BMO Report shows that despite the slump in oil and the decreasing number of jobs in the province, consumers are still spending at an unsustainable rate. Experts are warning consumers to take stock of their financial situation and prepare for the anticipated job cuts.

Average Household Debt
National ATL ON AB BC
2013 $72,045 $47,237 $76,970 $89,026 $79,089
2014 $76,140 $64,120 $67,507 $124,838 $99,834

Bruce Alger, licensed trustee with our consumer insolvency team in Alberta elaborates on his concerns, “Albertans continue to have the highest household debt in the country, and as other expenses continue to hike up such as utilities, property tax, and potentially interest rates, now is the time more than ever for consumers to have discipline and caution in term of their expenses.”

Alger offers some tips to consumers in Calgary to brace their financial situations:

Plan for the worst and start an emergency savings fund if you haven’t already – the goal is to get to several months of living costs put away in case of job loss

  • Seek out where you can easily cut down on every day costs and apply the saving against debts or your emergency fund
  • Talk with a financial expert, like a licensed trustee, who can offer free advice on how to deal with any mounting debts or debts that have the potential to become a problem.

So our question to you is, has the price of oil affected you or someone you know? Have you started to take a review of your finances and developed a plan to ride out the oil and gas wave?

If you or a family member are facing financial struggles or would like some help with managing your debt, one of our professionals is available to discuss your situation. There are many options available to help and you may not need to go bankrupt. Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free from anywhere in Western Canada 310 8888. Visit us online at BC: www.GTDebt.ca or AB: www.GT.Alger.ca.



Find the fun in scrimping and saving – strategies to knock debt out

OK, with the New Year a week in, how is your resolution doing? Finances seem to be one of the items topping the list this year for Canadians. You may have holiday shopping, entertaining or travel bills that need paying. Let’s not forget those credit card balances you’ve been carrying for a while. But how do you make room in an already tight budget and figure out which debt to tackle first.

So, it’s time to look around and find creative ways to ‘scrimp’, cut back, change things up and presto: extra money to apply to that holiday (or old) debt and then eventually add to our savings.

Where to start? There are some easy, tried and true ways that when added together really can result in more money in your wallet.

How about nixing the daily coffee fix? If you buy one $4 latte each day, that coffee habit will set you back $28 a week, about $120 a month and $1,460 per year. Keep that up for five years, and you’ve slurped away $7,300, not including any money you might have earned by investing your cash instead.

Take a look at your cable TV, Internet and smart phone contracts too. Candidly telling your supplier you intend to make savings can actually result in some! Discuss the packages and contracts you have and see where you can remove TV channels that you don’t watch, eliminate phone features you don’t need . . . or perhaps where bundling services can result in overall cost savings. Perhaps you no longer need a landline. And, when your smart phone contract comes up for renewal, consider forgoing the tempting upgrade to new technology and stay off contract with a streamlined package of services at a reduced fee.

We all know that eating out can be a significant drain on finances. So too, can be daily visits to the grocery store. It’s proven that popping in for milk typically leads to the purchase of at least three other impulse items. Instead, take time on the weekend to plan a week’s worth of meals and purchase all the supplies in one shopping trip. Quadruple make and freeze favourites like Chili that can serve several meals. Utilize a crock pot slow cooker too: prepare quickly before you head out the door and return to a meal all ready to go – and a great smelling house! Of course, it always helps to use coupons if you have them (look on line and print off) and check with your preferred grocery store as to which day of the week has the most cost savings and offers.

Other small ways to cut back:

  • Cancel magazine subscriptions or agree with friends to share the cost and circulate the issues.
  • Give up expensive habits like smoking and alcohol.
  • Install a programmable thermostat that can easily cut your energy bill by 10 to 20% (check out the NEST).
  • Stretch the gaps between hair cuts or colour treatments – after all Ombre is a trend.
  • Before shopping for new clothes, clean out your closet and figure out where you can re-style and re-purpose some of what you already have. You may be able to sell some items at a consignment store or re-discover outfits that you can adapt or re-incorporate into your current favourites.
  • Don’t spend a lot of money entertaining your children. They mostly crave time with you . . . so implement fun no-cost family activities like tobogganing nearby, or movie and game nights at home where everyone unplugs from devices and spends quality time together.

The money you save may later help fund a great family vacation!

If you or a family member are facing financial struggles or would like some help with managing your debt, one of our professionals is available to discuss your situation. There are many options available to help and you may not need to go bankrupt. Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free from anywhere in Western Canada 310 8888. Visit us online at www.GTDebt.ca or www.GT.Alger.ca.



Which is the best method for paying down debt: Snowball or Avalanche?

Avalanche method recommends paying highest interest debt first, while snowball advocates smallest amount first.

Many of us have used our credit cards, cash advances and borrowed money over the holidays, shopped our way though the malls, ordered online and picked up gift cards for our friends, family, coworkers and picked up those little secret Santa gifts, all of this adding to the costs of the holidays. We purchased a turkey or ham, all of the trimmings, some spirits, made baked goods and bought boxes of chocolates.

Aside from the 5lbs you would like to lose, how many of us are going to be going on a debt diet over the next few months? Which is the best method to conquer those few debt pounds we plan to lose?

Blake Elyea, from our Vancouver office spoke to Canadian Press about some of his thoughts regarding the Avalanche method and the Snowball method, but which will work best for you?

‘Avalanche’ involves paying highest interest first

The avalanche method involves tackling the highest interest rate debts first — an approach that can save you money on interest payments, but may require more willpower if your highest-interest debts are also the largest ones.

“Mathematically that’s the best approach,” Elyea says. “However, you’re not going to see the instant results necessarily as quickly with that approach. It’s going to take more discipline.”

If you’re going to adopt the avalanche approach, you should be checking your balance and tracking progress and making a small budget to reward yourself when you reach your  short term goals.

‘Snowball’ method tackles small debt first

The snowball approach, popularized by U.S. radio and TV personality Dave Ramsey, involves tackling your debts from smallest to largest.

Knocking off the smallest balances first — while maintaining the minimum payments on all the other debts — gives the debtor some “quick wins,” making it a good approach for those who need to see some instant results in order to stay motivated, says Elyea.

“We all like instant gratification,” says Elyea. “We want to see that we’re making progress.”

It’s your choice

Although the avalanche method will save money on interest payments compared with the snowball technique, Elyea says any strategy that involves taking stock of your financial situation and actively tackling your debt load is a good one.

“If you have a structured way you’re going to approach your debt, either method is going to get you there,” says Elyea. “One might take you a bit longer than the other.”

If you are in a position where your debts feel overwhelming, one option might be to get a free consultation from a licensed trustee, not only can a trustee assist with helping you to plan and budget, but they may be able to offer additional debt reduction suggestions such as a  consumer proposal, an informal proposal to creditors, and, in certain situations to file for bankruptcy.

Whatever your financial situation may be after the holidays, if you feel financially hungover, there are options, take stock, develop a plan and reach out for help if needed.

Grant Thornton – Canada | We provide solutions for people with debt and financial challenges.

If you are facing financial struggles or would like some help with managing your debt—one of our professionals is available to discuss your situation. There are many options available, ask us about a consumer proposal. Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free at 310 8888.

Excerpts adopted from the Canadian Press article: http://www.cbc.ca/news/business/debt-experts-recommend-avalanche-strategy-but-snowball-works-too-1.2886215

No gifts? Yes, really; it’s a good idea.

If you have elderly parents who may be struggling financially, now’s the time to suggest they don’t buy gifts for the grandchildren this holiday season. Sound radical? We think not.

Here’s why:

First, consider the reality of many older Canadians. In 2013, Statistics Canada found that about one-third of retirees have debt. Among those 55 and over who are not yet retired, two-thirds are in debt. While half of retirees with debt owe less than $25,000, Stats Can found that about one-sixth of them say they’re in hock to the tune of more than $100,000.

Blake Elyea, a senior vice-president with our team in Vancouver, says he sees a growing number of seniors as clients; those 65 and older made up 9.5% of all insolvency filings in 2013 (up from 9.2% in 2012 and 9.1% in 2011), according to Industry Canada. This trend is seen across Canada.

“The common thing that I see is either poor planning or no planning for retirement and maintaining your pre-retirement lifestyle. Then when your income changes, the shortfall is being backstopped with credit cards and a line of credit,” Mr. Elyea says.

Consider too that many seniors live on fixed incomes; they lack the means to aggressively address debt repayment. The knock-on effect can be that adult children have to pitch in and help their parents financially. That’s often a recipe for stress for both generations.

Secondly, do our children really need more video games or designer duds – and are the grandparents the ones that should be buying these expensive gifts?  We believe there are many more quality gifts we can give this year, the gift of time being the most valuable!

What we all crave over the holidays (including the kids) is rest and less stress. So, tell the grandparents they are off the hook for gifts. Their wallets will get a break and they can skip the shopping hassle. Instead, suggest some ‘old fashioned’ fun together as a family. Game nights, cookie-making or gingerbread house building together; share stories and family reminisces. Maybe start a family tree project together.

The holiday season at its heart is intended to be a time of togetherness and appreciation, and yes, even your kids – could be the happier for it.

http://business.financialpost.com/2014/12/06/indebted-seniors-need-to-discover-their-inner-scrooge/



Not our parents’ generation when it comes to personal debt

It’s been said before:  In a number of ways, we are not like our parents’ generation. Things will always change. Bottom line, we often think and act differently from our parents.

Perhaps new technology and the digital revolution spring to mind first?  It’s true. From the fax and laptop to smart phones and wearable technology, the world looks and works in many new, and evolving, ways.

What’s also true is our change in attitude and actions when it comes to personal debt. In 2012, the Globe and Mail reported on a poll conducted by a firm of bankruptcy trustees. The results show that most Canadians are quite comfortable with using debt as a financial strategy. Yet, this was a time when debt loads had risen to alarming new highs. The survey found that nine out of 10 respondents would consider borrowing money to cover an unexpected expense that was not an emergency.

By contrast, in the 1960s, families frequently lived a ‘middle class’ lifestyle and managed to own a home on one income (usually the Dad’s). The mindset was typically to save for needed things—rather than to borrow. And, this lifestyle rarely included the additional luxuries we see fairly common in our lives today: second cars, cable TV, eating out, vacations and plane travel, smart phones and tablets, pricey gym or golf memberships, designer duds etc.

The downside to our view of what constitutes the appropriate lifestyle of the 21st century is that to acquire and maintain this level of consumerism we may spend more than we earn (a concept that would rarely be considered acceptable in the 1960s)! In our work at Grant Thornton, we often see where this can lead:  Consistently living beyond ones means, borrowing, excessive purchasing and maximizing high-interest credit cards can put individuals and families into highly stressful situations with increasing debt loads (whether we believe we can afford it or not).

Our role is to help people address their debt problems and find ways to rebuild a solid financial future. We can help with tips and reminders so that you may not need our assistance again in the future, including: disaster proof your life (get your life insurance and an emergency fund in place), spend less than you earn, aggressively pay down high interest debt, read the fine print on any purchase agreements (you may be liable for significant interest payments if you miss the eventual payment due date) and delay consumption (save for that vacation rather than charge it).
If you are facing financial struggles or would like some help with managing your debt—one of our professionals is available to discuss your situation. There are many options available, ask us about a consumer proposal.  Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free at 310 8888.

BC: www.gtdebthelp.com

AB: www.GT.Alger.com

Happy upcoming September ‘New Year’

For many of us, September feels more like the start of a New Year than January does. September marks the end of summer and brings a ‘back-to-school’ reality that we feel (whether or not we have school-aged children).

September is a time to re-focus, get back to work and also—back on budget!

If you have back-to-school-shopping to tackle, then budgeting is essential. Too often compelling advertising, apparent sales and our child’s idea of what they need, can cause us to spend more than we have . . . and more than we can afford. Buying clothing, back packs, lunch boxes, stationery supplies and electronics can be an expensive undertaking. If your child is off to college or university the costs can be even higher to set up dorm rooms and to purchase books, food plans and transit passes.

A good start to managing your budget is to involve your child in the planning. Refer to lists the school or post-secondary institution has provided. Remind your offspring of the difference between ‘needs’ and ‘wants’ (it will serve them well for their future money management too). Determine together what is essential for when school starts and what can wait to see if it is really required. Encourage your child to pay something towards some of the ‘needs’ from their savings; or at least to pay for their perceived must-have from the ‘wants’ list. There are many back-to-school budget planners online to help you track planned and actual expenditures. These can help you avoid impulse purchases and stay within budget.

Budgeting for upcoming expenses

Balancing the budget

 

But what if you don’t have back to school expenses…

September can also the ideal time to pause and refocus on your personal or family finances. It’s a good opportunity to revisit your near and long term goals.

In the near term you might be looking at how you’re going to plan and pay for the expenses associated with the upcoming holidays (both Thanksgiving and Christmas) or deal with the additional rising costs of heating and electricity. There is also thinking about getting yourself ready, do you have what you need for fall and winter (ie:a fall/winter coat and other clothing)?

If you are carry debt, resume your commitment to paying it off; remember to start first with high interest rate credit cards. It can be a time to check in again on your household budget and ways to trim expenses. And, it can be an opportunity to start saving for upcoming holiday spending. Even a little money put away each week starting now, can help toward the costs of future Christmas or Hanukah celebrations.

If you are facing financial struggles or would like some help with managing your debt—one of our professionals is available to discuss your situation. There are many options available to help and you may not need to go bankrupt. Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free in at 310 8888.

 

 

Meeting with a Bankruptcy Trustee is no scarier than dinner with your in-laws.

When you’re struggling with unmanageable debt, we know everything else in your life can suffer. The thousands of people we have helped over the years share similar stories. They’ve told us of struggling to pay the minimum amount on credit cards, borrowing from one card to pay another, liquidating assets to pay bills and still being overwhelmed with day-to-day financial obligations. We know this can happen to anyone. Suddenly a change in your work, health or personal situation can take you from managing—to being in serious financial difficulty.

 

The idea of meeting with a Bankruptcy Trustee can perhaps be intimating or feel like a blow to self-esteem. As you might imagine though, we have met with men, women and couples from all walks of life; all ages, occupations and backgrounds. Ultimately: anyone can find themselves with debt problems and that’s when we can be of help.

 

Meeting with a Trustee, here’s what to expect:

  1. Call or email us to schedule a confidential, no-cost, no-obligation appointment. We have several locations where we can meet and flexible office hours. You will be asked to bring along (or know) some of your financial details such as monthly expenses, debts (and to whom) and your monthly income.
  2. The Trustee will review the information you have provided and go through the options available to you, what may happen, the costs and timeframe surrounding your options. These might include Informal proposal, consumer proposal or bankruptcy. (Only a Trustee can help you file a consumer proposal or bankruptcy)
  3. If we cannot help you, we will recommend options to you and refer you to someone who may be of assistance.
  4. You will always have time to review and consider your options. We will not pressure you to make a decision. You will have a better understanding of the options available to address your debt problems and you will understand the next steps and implications.
  5. If you enter into a formalized process to address your debts, and documents are signed, then garnishees and collection calls will stop.

Remember, debt problems can happen to anyone. A Grant Thornton Trustee can be a source of important information and guidance to help you toward solutions—and peace of mind.

If you are facing financial struggles or would like some help with managing your debt—one of our professionals is available to discuss your situation. There are many options available to help and you may not need to go bankrupt. Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free at  (your area code)310 8888.



Yes, death and taxes are inevitable.

You’ve heard the old adage that the only two certainties in life are: death and taxes.

Well, it’s ‘tax time’ again and the truth is that you can rarely escape your tax obligation to Canada Revenue Agency (CRA).

Unlike some of your other creditors, CRA has unique powers to collect what you owe and they will still charge penalties and interest on all of your overdue taxes. It’s a policy designed to keep us on the straight and narrow. So, if you do get into arrears, watch out, until the debt is paid in full, the CRA can

  • withhold child tax credits
  • withhold GST credits
  • can take money from your bank account
  • garnishee your wages without getting a judgment against you.

CRA has millions of taxpayers and they are almost always unwilling to accept less than full payment; ‘almost’—because there are situations where some relief is available. This is where we can help!

If you do owe personal income taxes and can’t pay the balance in full, you can always explain your situation to CRA and try to negotiate a payment plan. For example, if you owe $1,000, you may offer to pay $100 per month for the next ten months. If CRA accepts your offer, you’ll likely still pay interest until your debt is paid.

Another option is to make a formal Proposal to CRA. This is done with the help of a Bankruptcy Trustee. A Proposal isn’t bankruptcy but rather a means to explore other ways to address a variety of debt problems. Making a Proposal to CRA and your other creditors (banks, pay day loan providers/cash stores) is quite common. A Proposal can be a way to reduce the overall amount you owe, negotiate lower re-payments amounts and/or expanded repayment terms.

Making a Proposal to CRA does not guarantee a reduction of your overall tax debt or extended payment terms, but if you meet their criteria, there is a better chance it will be accepted. CRA will be looking to see if your taxes are filed and up to date and, if prior to your Proposal you have to have been a taxpayer in good standing. You’ll need to make a case for extreme circumstances hindering your ability to pay the full amount as due—and demonstrate you are truly an honest and unfortunate debtor.

The Proposal will only include taxes owing prior to the Proposal date. Tax returns due during the Proposal period must be filed and any tax owing paid as due. Depending on your situation, payments negotiated through a Proposal could be made for up to five years.

The other option to addressing tax debt is bankruptcy. It’s a common misconception that personal income tax debt is not discharged by bankruptcy. This is not true; personal income taxes are covered by bankruptcy and this solution should be discussed fully with a Bankruptcy Trustee to see if it’s the best solution for your situation.

If you are facing financial struggles or would like some help with managing your debt—one of our professionals is available to discuss your situation. There are many options available to help and you may not need to go bankrupt. Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free from anywhere in Alberta and BC 310 8888.

In Alberta: www.gt.alger.ca     In BC www.GTdebt.ca

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We can help with tax (CRA) debt!

The payday loan love affair is over (or should be).

It’s February and the month has been aglow with talk of love and romance. However, one relationship that is waning in appeal (and rightly so) is Canadians’ love affair with payday loans.

These small, short-term unsecured loans are rarely linked to a repayment date aligned to a borrower’s payday—but that was the initial concept: If you are short of money and can repay a loan once you get paid . . . then come on down!

Sometimes these loans are called ‘cash advances’ and they typically rely on the borrower having previous payroll and employment records.

Payday loans may seem attractive to some consumers in need of ready cash but consider that for a $15 charge on a $100 14-day payday loan the annual percentage rate is over 391%*!

In addition to being expensive, payday loans are also a short-sighted way to address financial troubles. If you are regularly strapped for cash and have maxed out other (more cost-effective) sources of credit it may be a sign that you are carrying an unreasonable and unmanageable debt load.

Payday loans will not help ease your debt problems; they are an expensive way to just keep your head above water. Bottom line, if you are struggling to make ends meet and drowning in debt repayment, it’s time to look at available options to solve your problems—for the long term.

You might consider a consolidation loan (to address your debts), but you may not qualify because of your debt ratio or impacted credit score.

One popular option is a Consumer Proposal. It focuses on what you are capable of paying (not just what you owe)—this could be 75% less than the total amount you owe. You can qualify for a Consumer Proposal if you owe up to $250,000 of non-mortgage debt—and most debts can be covered. This essentially allows you a fresh start.

With the guidance of a Trustee you negotiate to pay creditors all, or a portion, of your debt over a specific time period or to extend the time allowed to pay the entire debt. You need the majority of creditors to agree to the proposal—then all unsecured creditors are bound by it.

It’s time to break off the unsatisfying relationship with payday loans and develop a sound financial future.

If you are facing financial struggles or would like some help with managing your debt—one of our professionals is available to discuss your situation. There are many options available to help and you may not need to go bankrupt. Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free from anywhere in Alberta 310 8888. www.gt.alger.ca

*Estimate, actual amounts may vary.