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.



The curse of the ‘broke bride’: and other financial considerations as love blooms.

Wedding season will soon be in full swing with many Canadians will tying the knot and making the journey down they isle for better or for worse. Sadly, almost half of these marriages will end in divorce, stats citing that money issues are a leading cause of marital strife and the eventual demise.

So what should you be thinking about before that life changing day? What questions should you be asking?

Prior to marriage – learn about your partner’s attitude towards money. Are they are saver? A spender? Dependent on credit cards or a ‘buy now pay later’ purchaser? You want to know sooner than later if you have a similar vision and goals regarding how you will spend and save your money. 

Have the talk–Do you know your soon-to-be souses financial status? Do they have student loans that remain unpaid, or a car worth less than the loan out on it? Is their credit score damaged? You should know the financial health of your partner, good or bad. A poor financial past can put a cramp in your plans to buy a house down the road, so talk about it early and have a plan, if needed, to move past it.

Heads-up on – the wedding budget. Lavish events with big budgets may seem the norm in today’s celebrity focused culture but it’s far beyond the reach for most of us. So, for the rest of us being money minded leading up to the big event can be a necessity, because the reality is, overspending on the wedding day can leave a bitter debt ‘aftertaste’. Bottom line: a wedding is a celebration . . . but a marriage is a long-term commitment. Setting a responsible budget for a wedding based on your means (including savings and/or family contributions) can go a long way to starting a marriage in a financially stable position.

How much debt is your fiancé bringing to the marriage? Their current financial obligations will now impact your ‘family’ finances for day-to-day living—and, your future plans. Ask too if they are current with their obligations to Revenue Canada (CRA). You won’t be liable for any debt they have to CRA but it’s an indication of their approach to personal finances—and, has implication to your joint lifestyle if they have significant arrears to address. Keep in mind: financial irresponsibility can lead to a poor credit score, later affecting the probability – or ease – of buying a new home or other large joint purchase.

If you intend to register or re-register real property (home, vacation property) in joint names upon marriage, get advice from a lawyer first. Understand the implications—including the very real likelihood that each of you is then deemed to have equal, shared ownership. Consider: you may have brought more assets to the marriage and if your partner was later to go bankrupt, half of (now) joint assets could be lost. 

Getting a supplemental credit card under your spouse’s existing card may seem to make sense and perhaps comes with a ‘romantic notion’ of your new status as a couple. Understand the risk: the moment you make your first purchase on that secondary card you are now jointly and severally liable for all charges on that card whether made by you or your spouse. If your spouse defaults on the credit card you are responsible for the entire debt.

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 toll free from anywhere in Western Canada 310 8888.

Visit us online www.gtdebt.ca or www.gt.alger.ca 

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.

Determined to deal with your unmanageable debt load? Then consider a consumer proposal.

Maybe it’s the credit card bills clearly itemizing unplanned holiday spending. Or, perhaps your New Year’s resolution is to finally deal with your debt. Whatever your motivation, it’s important to know all of your options.

One popular option is a Consumer Proposal – which has become favoured over bankruptcy. A Consumer Proposal is a way to address debt but not negatively ‘impact’ yourself – and your assets and credit rating – as much as you would through a bankruptcy.

A Consumer Proposal 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.

With a Consumer Proposal you keep control of your assets and it has shorter-term – and less significant – impact on your credit rating than bankruptcy.

For example, if you make a Consumer Proposal your credit score will be affected for three years after you have paid the full amount promised to your creditors in your Proposal. In contrast, although it varies by credit agency—in general, your credit score would be affected for six years after discharge for a first bankruptcy and for 14 years for a second bankruptcy.

Keep in mind too that some consumers cannot qualify for a consolidation loan (to address their debts), whether because of their debt ratio or their impacted credit score. With a Consumer Proposal it is not about ‘qualifying’. This solution is seen as a consolidation of your debt and a repayment plan—based on your current circumstances.

Avoiding bankruptcy may be important to you too. Your profession or employer may review your credit history and view a bankruptcy as unfavourable. Also, if you are a director of an incorporated company you cannot legally continue to perform this duty if you have filed for bankruptcy.

Not to mention, sometimes it can be a psychological thing—people in general don’t like the ‘b’ word (bankruptcy). A Consumer Proposal provides a solid solution to resolving debt issues without committing to bankruptcy.

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.

We’re not being the Grinch . . . but we do cry ‘caution’ as the holidays approach

It’s that time of year again. Likely you are among the majority of Canadians who will soon be celebrating, gift-giving and entertaining this holiday season.

The downside of all of the family and social time, travel, merriment – and presents – is the spending that occurs to make it all happen. Christmas in particular is highly-promoted commercially; as consumers we are bombarded to buy, buy and buy and the retailers are starting to advertise and prepare for the holiday season earlier and earlier.

February and March are often the busiest times in our office. We find holiday spending, mostly on credit cards, can be that final ‘straw that breaks the camel’s back’ for many people. Debt loads that may have already been stretched before the holidays may now be pushed to the limit and with the New Year more people are looking for a fresh start.

There are strategies to help avoid the temptation to overspend.

There are a few good strategies to implement to keep your holiday spending within a set budget:

  1.  Have a discussion with your family (including children) about ways to celebrate the spirit of the season while being ‘low consumers’. Rather than buying lots of toys for example, explore activities to do together as a family that are low-cost, fun and build shared memories.
  2. Secondly, you may consider not exchanging gifts in your family at all and instead donate a modest amount to charity, or volunteer together with a agency serving a holiday meal to people in need.
  3. If you are planning on exchanging gifts, you might elect to save up in advance of the holidays so you know exactly what you can afford to spend.
  4. Set a modest budget and choose not to use credit cards this way it will help you to avoid impulse buying or overspending.
  5. Another great idea (and growing consumer trend) is exchanging homemade gifts or services among family and friends. If you are planning large family meals, make it ‘pot luck’ where everyone brings a dish. This keeps the cost (and work!) manageable for everyone.

Take some time now to reflect on your wishes for the holidays, plan your approach and your budget . . . and you truly may enjoy—a Happy New Year!

Here is a recent consumer report (Calgary Global News) on managing debt during the holidays: http://globalnews.ca/news/939201/get-a-handle-on-debt-before-the-christmas-crunch-warn-experts/

 

If you are facing financial struggles or an unmanageable debt load—one of our professionals is available to provide options for your situation. We can help you explore a consumer proposal; bankruptcy is not your only option. Contact us for a confidential, no-obligation, complimentary consultation, toll free from anywhere in Alberta 310 8888 or visit www.gt.alger.ca.

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Wedding season and love is in the air: But what about the debts your fiancé is bringing to the marriage?

It’s that time of year. Happiness abounds as we celebrate the optimism and promise of nuptials—but what about the financial implications of ‘tying the knot’? If you and/or your fiancé come to the marriage with debt, it’s wise to understand the implications.

First, prior to marriage it’s important to know your partner’s attitude to money. Are they are saver? A spender? A debtor? If you haven’t had the conversation already, it’s advisable to ‘check in’ on your shared or differing values regarding finances. You want to know sooner than later if you have a similar vision and goalsregarding how you will spend and save your money. Stats confirm that money issues are a leading cause of marital strife and break-up.

It’s important to know how much debt your fiancé is bringing to the marriage. Firstly, as an indicator of their approach to money matters and also to understand the debt load they are servicing. Their current financial obligations will now impact your ‘family’ finances for day-to-day living—and, your future plans. Ask too if they are current with their obligations to Revenue Canada (CRA). You won’t be liable for any debt they have to CRA but again, it’s an indication of their approach to personal finances—and, has implication to your joint lifestyle if they have significant arrears to address. Keep in mind: financial irresponsibility canlead to a poor credit score, later affecting the probability –or ease – of buying a new home or other large joint purchase.

If you intend to register or re-register real property (home, vacation property) in joint names upon marriage, get advice from a lawyer first. Understand the implications—including the very real likelihood that each of you is then deemed to have equal, shared ownership. Consider: you may have brought more assets to the marriage and if your partner was later to go bankrupt, half of (now) joint assets could be lost.

Getting a supplemental credit card under your spouse’s existing card may seem to make sense and perhaps comes with a ‘romantic notion’ of your new status as a couple. Understand the risk: the moment you make your first purchase on that secondary card you are now jointly and severally liable for all charges on that card whether made by you or your spouse. If your spouse defaults on the credit card you are responsible for the entire debt.

Got questions? Our Trustees are available to discuss your pre or post marriage debt issues. Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free from anywhere in Alberta 310 8888.

Forget any potential tax refund, what if you owe money to Canada Revenue Agency?

Are you dreaming of a tax refund? Many of us are ever-optimistic and complete our tax returns (maybe with professional help) hoping a refund might be coming our way—to fund a vacation or, likely the better choice: to pay down credit card debt.

However, you may be one of thousands of Canadians who has not yet paid any personal income tax for the 2012 tax year, and/or owes for previous years (and hopefully has a formalized payment plan in process) or, is an outlier nervously avoiding the reality of several years of unfiled tax returns.

Paying personal income tax regularly – and fully – is often the bane of the self-employed. For entrepreneurs there may be no one tasked with diligently deducting (and remitting) tax, before income or a draw from revenues is taken.

Tax debt cannot be taken lightly. CRA has unique powers to make sure they collect what people owe. Knowing that none of us like to pay taxes they charge penalties and interest on all overdue taxes. It’s a policy designed to keep us on the straight and narrow. If you do get into arrears, CRA can withhold child tax credits and GST credits until the debt is paid. They can take money from your bank account or 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.

I say ‘almost’ because there are situations where some relief from tax debt is available.

If you owe personal income tax and cannot pay the balance in full, you can explain your financial situation to CRA and negotiate a payment plan. For example, if you owe $1,000, you may offer to pay $100 per month for the next ten months. However, even if CRA accepts your offer, you will continue to be charged interest until your debt is paid.

Another option is to make a formal Proposal to CRA. Developed with the help of a professional 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 creditors (banks, stores) is quite common and can be a way to negotiate lower debt amounts and/or expanded repayment schedules.

When making a Proposal to CRA it is not a ‘for-sure’ opportunity to obtain a reduction of your tax debt (and extended payment terms). You must show that your filings are up to date, not fraudulent in your representation and, that prior to your Proposal you have been a taxpayer in good standing. You have to be able 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 as required and any tax owing paid as it becomes due. Depending on your situation, payments 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 ensure it might be the most viable solution to an individual’s distinct situation.

And, if you haven’t filed your personal tax return for several years, get the tax package and forms for the missing tax years from the CRA. Fill them out and send them in. If there is a balance owing you will have to pay a late filing penalty of a percentage of the tax you owe plus a percentage for every month you are late. You will also be charged interest on the outstanding amount. Check the CRA website for current percentage rates and other implications. There is no escape from CRA and addressing your tax situation will bring you some relief—eventually. Make sure you file regularly in the future and maybe, one day in the not too distant future . . . a tax refund will come your way.

Debt Levels of Seniors in Canada – Alarming

CANADIAN SENIORS’ DEBT LOAD ALARMING

TD Bank recently conducted a study which had surprising results;  older Canadians have increased their debt load by 15% (an average of $6000/person) from the previous year. Seniors living in Alberta, Ontario and Quebec had the highest rates of debt accumulation in 2012.

This would not be as alarming if most seniors were not already living on  limited, or fixed, incomes of moderate levels. So what is causing these increased levels of debt?

Causes of the increased debt load can be partially attributed to the general increased cost of living, but with most of senior debt being credit based, what is the basis for this debt increase?

Karen Horvath, an Alberta Bankruptcy Trustee at Grant Thornton Alger Inc. notes that in the case of one spouse passing away, it becomes increasingly difficult to cover costs of presents, housing and groceries on now a single source of income.

More and more, bankruptcy trustees and credit counselors are seeing seniors in their offices seeking financial options to handle their debt load.  A debt load which is more and more carried into retirement. The stress that these older Canadians are now facing on retirement is significant.  Once on a fixed income, it is often impossible  to continue with the payments required to service debt even by making minimum payments  Seniors are often forced to postpone retirement and work into their 70’s and 80’s to keep their  households running.  Others are forced back to work after trying to retire but not being able to service their debt.  Finally there are some seniors who are incurring even more debt after retirement t to service existing debt repayment commitments.  Although there are options available, many seniors as well as other age groups are not aware of the options available to help them manage their debt.

“We have seen cases where the husband never worried about life insurance, so the surprise finding out there are not funds to cover funeral costs can be a lot to handle.” Says Karen Horvath, Trustee at Grant Thornton Alger Inc.

The stigma of seeking advice for debt problems is as a strong factor for many seniors. So what is the solution? Many people would never think that bankruptcy is a solution for seniors.[AB1]  It is not the only option seniors have; there is also the option of filing a consumer proposal to the creditors requesting a reduction in the debt or simply a deferral of payments. As  Karen says “a lot of times this can be just enough assistance that it helps seniors, and other individuals, get  relief and a solution to their debt, to be able to move forward”.


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