Debt Help & Bankruptcy Canada

At Grant Thornton Limited, we provide solutions for people with debt and financial challenges. Consumer proposals, bankruptcy, and other debt solutions.

Is a car a necessity or luxury? guess it depends on where you live….

Most people need to commute to work, there’s generally not an option, but is car ownership even possible in some locations?

If you buy a condo in Downtown Vancouver and you want a parking space, there is a good chance you are going to pay a lot for it.

In Calgary the simple act of parking your car at work is expensive: some of the most expensive parking in Canada.

An analysis in a Toronto real estate blog looked at parking, car payments or depreciation, insurance, gas, and maintenance. It found — even for Sunday drivers — the cost of ownership was $870 per month. That’s $10,400 per year.

Transportation experts  have reported the numbers are similar in Vancouver and that’s why many young urban professionals look at the other options.

What are the options? If you can’t afford a car, the good news is that you dont have to go into debt to get one either. There are many services popping up that can help you bridge the gap: Gar to Go, Uber and a few others.

“Now with car-sharing programs, more and more young people in particular have found realistic ways to get around. As a consequence, you can see they’re taking out licences less and they are not buying cars; they are finding lower cost substitutes.

But though car ownership may have become a luxury for people living downtown, it is still a necessity in some other areas. For many in Metro Vancouver and the Fraser Valley, commuting by transit is not an easy option.

A recent study by the Pembina Institute found only 19 per cent of Metro residents live within walking distance of rapid transit, compared to 21 per cent in Calgary, 28 per cent in Ottawa, 34 per cent in Toronto, and 37 per cent in Montreal.

There are options, there are always options.

Our trustees offer free consultations, credit counselling, consumer proposal administration and bankruptcy services. Call 310-8888 for a free, no obligation consultation.

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Big income . . . and big debt?

Celebrities – and ‘regular folk’ too – often file bankruptcy or consumer proposal for similar reasons:

Limited financial education: If, like a whirlwind celebrity’s (think YouTube insta-sensation) rise to fame you go from having nothing to having the world at your fingertips, a financial education is not usually part of the package. Learning how to effectively save, budget, and invest can take years, and sometimes a team of help, to achieve. When handed huge checks to cash, many celebs go out and buy the biggest house and fastest car, rather than learning how to properly handle their money.

For ‘mere mortals’ a significant career promotion with pay increase (or an inheritance or elusive lottery win) can add a boost to our credibility and add some additional buying power. But, it’s essential to learn how to manage your money, your budget and your long-term financial planning.

Materialism: Our culture can be highly materialistic. It prompts some people to try to ‘one up’ each other with larger houses or forever be ‘keeping up with the Joneses’ with more expensive vehicles. Young people, in particular, can be susceptible to the ‘celeb mindset’ believing their ownership of the latest designer handbag or electronic item is a given. The easy access to credit cards to people with limited income and often limited money management experience (see above) can lead to serious debt problems.

Celebrities, like the rest of us, can get caught up in having the finer things in life. But, a great TV gig can get cancelled and when the paycheques stop rolling in, it’s harder and harder to maintain that same standard of living without getting into serious debt.

Lack of investment in self: Often the stars surround themselves with lawyers, accountants, and insurance professionals to help them with proper estate, tax, and insurance planning. Sometimes they don’t double-check the work done on their behalf, or they don’t properly vet the financial professionals they hire. Not surprisingly, many fall prey to unscrupulous advisors.

The lesson here for ‘man on the street’ is to take ultimate responsibility for your own financial affairs. Yes, seek the advice of proven professionals. Ask other trusted sources for referrals. Get second opinions. And – refer again to the info above – get educated!

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 at 310 8888.

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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.

 

 

You can’t take it with you… but—what CAN you keep in a bankruptcy?

There’s a lot of confusion and misconceptions about what you ‘lose’ or have to ‘give up’ through a bankruptcy and what is ‘exempt’ – meaning what you get to keep.

When you enter into bankruptcy (with the assistance of a Bankruptcy Trustee) this legal option will address your insolvency, provide you immediate protection from you creditors and an opportunity for a fresh start. (Remember, while most debts are covered by bankruptcy – not all are, talk to a Trustee for specifications.)

There are some assets you may not be allowed to keep if you file for bankruptcy. These are sold to pay as much as possible to your creditors against your debt. However, there are assets you are legally allowed to keep, these vary by province.

Some of the items you are generally able to keep, in Alberta, are:

  • Clothing up to a value of $4,000
  • Household furnishings and appliances to a value of $4,000
  • One motor vehicle not exceeding a value of $5,000 (equity)
  • Medical and dental aids required by you and your dependents
  • The equity in your principal residence up to a value of $40,000. If you are a co-owner of the residence, the amount of the exemption is reduced to an amount that is proportionate to your ownership interest
  • Personal property (i.e., tools, equipment, books) that you require to earn income from your occupation up to a value of $10,000
  • Social allowance, handicap benefit or a widow’s pension if the proceeds from the payment are not intermingled with your other funds
  • For farmers where your principal source of livelihood is farming: you may be able to keep up to 160 acres and personal property that you require for the proper and efficient conduct of your farming operations for the next 12 months

In BC:

  • Home equity in Greater Vancouver and Victoria up to a value of $12,000. In the rest of the province up to a value of $9,000
  • Equity in household items up to a value of $4,000
  • Equity in a vehicle up to a value of $5,000; The vehicle exemption drops to $2,000 if the debtor is behind on child care payments (to facilitate the enforcement of Maintenance Orders)
  • Equity in work tools up to a value of $ 10,000
  • Equity in essential clothing and health aids is unlimited

Keep in mind, if you chose instead to do a Consumer Proposal as your debt solution—you get to keep all your assets. A consumer proposal may also reduce your overall debt (by up to 75%). A Proposal isn’t bankruptcy but rather a means to explore other ways to address a variety of debt problems.  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 repaying 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.

More on bankruptcy exemptions in Canada.

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.  Contact us for a confidential, no-obligation, free consultation. Call us toll free from anywhere in Western Canada: 310 8888 or visit us online for more information and videos on this and many other topics: (AB) www.gt.alger.ca or (BC) www.gtdebt.ca

See us on YouTube: https://www.youtube.com/channel/UCwhtdNlBzwmnMsATvelc3cQ



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!

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