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 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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RRSPs proteced if you file bankruptcy in Canada

In a final act of desperation, many consumers resort to the one last asset they have left but fear losing if they have to file a bankruptcy…their RRSP account.  People end up tapping into their future retirement savings to pay creditors or subsidize their living expenses if no money is left after debt payments. But consumers have told me that one of the main reasons why they felt the need to deplete their accounts is the fear that the bankruptcy Trustee will take their RRSPs and so the thought is, why not clean out the account first before the Trustee does.

 

Before you dip into your retirement savings, you need to know that bankruptcy has no interest in your RRSPs.  People are surprised to hear that there is protection given under provincial and pension legislation for RRSPs, LIRAs and pensions which prevents the seizure of these funds.  Knowing this vital information ahead of time can prevent the depletion of retirement savings that has, for most people, taken years to build.  I am seeing more and more people who’ve cashed out their RRSPs before filing a bankruptcy which not only resulted in eliminating their retirement plan but created a tax liability to Canada Revenue Agency. Don’t add to your debt load…keep your RRSPs for retirement since that was the intention, and still must be, of banking your hard earned dollars.

 

Start planning a way to deal with your debt…but plan to keep your RRSPs. 

 

 

This post written by Freida Richer

Trustee at Grant Thornton Alger Inc.

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.