Tag: credit card debt

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A BALANCED BUDGET IS TO FINANCIAL HEALTH WHAT A BALANCED DIET IS TO PHYSICAL HEALTH – Part 1

balanced budget, financial health, household debt, mortgages, consumer credit, installment loans, credit card debt, debt, starting over starting now, Vaughan bankruptcy trusteeA balanced budget is to financial health what a balanced diet is to physical health. Where does the money go? Do you feel like you have a hole in your pocket? Is your spending out of control? Statistics Canada reports that Canadian household debt hit a record high during the third quarter of 2014, as it grew at a faster pace than disposable income. The total amount of credit market debt, which includes mortgages, non-mortgage loans and consumer credit, held by Canadian households increased to 162.6% of disposable income during the quarter. That means Canadians owed about $1.63 for every dollar of disposable income in the third quarter. No wonder we’re scrambling. According to Equifax Canada:

  • Debt levels are climbing fast to a record $1.422-trillion in the fourth quarter of 2014.
  • Installment loans, largely made up of car loans, were the fastest growing segment of debt, up 11% year over year.
  • Credit card debt rose 5.9% from a year ago.

Many of us don’t realize the importance of a balanced budget and as a result we live beyond our means and get into financial hot water. A balanced budget is to financial health what a balanced diet is to physical health. Everyone should have a budget. It’s an important money management tool that will show you exactly how much money you receive, how much you spend, what you spend it on and how much you save. It will help you to establish spending limits, reduce spending and allow you to live within your means.

If you’re suffocating under a mountain of debt, contact Ira Smith Trustee & Receiver Inc., your Vaughan bankruptcy trustee, today. One of the most important things when we are consulting with a consumer debtor is for them to have a balanced budget. We will work with you so that Starting Over, Starting Now you can live a financially healthy life. Watch for our next blog – A Balanced Budget is to Financial Health What a Balanced Diet is to Physical Health – Part 2 – when we’ll be discussing a case from our files and how important a balanced budget is when working with a trustee.

I and my colleagues wish you a healthy, happy and balanced New Year.

 

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PERSONAL BANKRUPTCY CAN BE A GREAT BEGINNING

Personal Bankruptcy, bankruptcy alternatives, Bankruptcy and Insolvency Act, Canadian bankruptcy, Consumer Proposal, consumer proposals, credit counselling, credit score, Debt, debt consolidation, licensed bankruptcy trustee, licensed trustee, receivership, receivership in bankruptcy, starting over starting now, Toronto bankruptcy trustee, trustee

Personal bankruptcy is rarely spoken of in a positive light, yet for some, it can be a great beginning. Here’s a truly inspirational story of a new beginning from the files of Ira Smith Trustee & Receiver Inc.

Molly (not her real name) was a 41-year-old woman who was married with one child. She was well educated and had been a high school chemistry teacher. Sadly, she became an alcoholic and her life fell into ruin. Alcohol had taken over her life and she could no longer work as a teacher. Now unemployed she resorted to using credit cards to buy alcohol and before long her credit cards were maxed out.

She needed to work to pay for her habit so she went back to community college to become a law clerk. Molly found work as a law clerk but she couldn’t give up drinking. Alcohol was destroying her work life and her personal life. She continued to max out her credit cards and previously obtained lines of credit. To make matters worse Molly couldn’t afford to pay her income tax liability which was greater than what was deducted at source by her employer.

Molly needed to rid herself of her debts so she came to us to file for personal bankruptcy. We knew that for Molly to truly get a fresh start she needed to deal with her alcoholism. We insisted that she join AA if she wanted us to support her discharge from personal bankruptcy. Molly joined AA, attended meetings and stopped drinking. She ultimately became a sponsor to other AA members.

Molly really turned her life around. She stopped drinking, joined AA and lived within her means. As a result of her willingness for overall rehabilitation, the Trustee recommended that Molly obtain an absolute discharge, which she did. Molly’s whole life improved including her relationship with her family.

Personal bankruptcy can be a great beginning

Personal bankruptcy was the start of a great new beginning for Molly and if you’re facing serious debt problems it can be for you too. Contact Ira Smith Trustee & Receiver Inc. today and Starting Over, Starting Now you can turn your life around too.

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MILLENNIAL HOME OWNERSHIP: MILLENNIALS ARE STRUGGLING WITH DEBT

Millennials, Gen Y, debt, student loans, credit card debt, credit counselling, debt consolidation, consumer proposals, bankruptcy, millennial home ownership, starting over starting nowMillennial home ownership may be out of reach because there is no doubt that Millennials are struggling with debt and it’s a serious issue. We’ve addressed this problem in two previous blogs – Millennials Debt; A Plan for Escape and Gen Y Trapped: Millennials in Debt. For those of you unfamiliar with the term Millennial, the Census Canada definition is kids born between 1977 and 1994. In Canada Millennials represent a large group; they make up approximately 27% of the population. And unfortunately they also have a lot of debt, the majority of which is student loans and a good proportion can also be attributed to credit card debt.

As a result of student debt, credit card debt and lower than anticipated salaries, many Millennials can’t even dream of buying a house and millennial home ownership is a fading dream. In fact, many can’t even afford an apartment and are living at home with their parents or sharing an apartment with multiple roommates. This situation has affected more than just the Millennials and their families; the lack of millennial home ownership has seriously impacted the housing market. “The first-time homebuyer is really absent from the market,” says David Crowe, the chief economist for the National Association of Home Builders. He says only 16% of new-home sales are to first-time homebuyers. That is half of normal. And in terms of the numbers of new homes getting built, “We’re not even halfway back,” Crowe says. This phenomenon will eventually rebound, but it will take time. Millennials will need to feel comfortable that their debt reduction plans are working before millennial home ownership, and therefore a large group of first-time home buyers, will again be able to enter the real estate market.

Millennials need help dealing with debt. Maxing out credit cards is not a solution. If you’re a Millennial in debt, you need professional help. Responsible hard working millennials deserve to have millennial home ownership included in their reality.

Contact Ira Smith Trustee & Receiver Inc. With sound professional advice and a solid plan in place, you can conquer debt. There are many ways to deal with debt which include credit counselling, debt consolidation, consumer proposals and bankruptcy. It may sound ominous, but the Ira Smith team will guide you through the process and Starting Over, Starting Now you can live a debt free life and plan for your future.

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SENIORS ACQUIRING MORE DEBT DELAYS RETIREMENT

debts, debt, retirement, credit counselling, credit card debt, line of credit, trustee, starting over starting now, seniors acquiring more debtSeniors acquiring more debt seems to be more the norm than the commercials featuring retirees driving convertible sports cars, travelling to exotic locations and wining and dining in upscale restaurants, you’ve no doubt watched. The question that seniors acquiring more debt must be asked is will debts prevent your retirement?

Seniors acquiring more debt are not going to be living the life of luxury depicted on television. How many of you are drowning in so much debt that retirement isn’t even an option? According to the BMO Retirement Institute debt is the number one barrier preventing Canadians from saving for retirement and that their priority should be to retire free of debt, including a home mortgage.

The reality is:

  • National Foundation for Credit Counseling says one-third of its 3 million clients last year were 55 or older.
  • More than 41% of families with heads of household between age 55 and 64 had credit card debt in 2010 (up from 33% in 1989), according to the AARP Public Policy Institute and the Demos research group.
  • The median total debt for 55- to 64-year-old households is $76,600, says the Employee Benefits Research Institute.

Among those retired Canadians with debt, a Harris/Decima poll for CIBC found:

  • 37% are juggling two or more debt payments a month
  • 39% are carrying credit card debt
  • 30% have debt on their line of credit
  • 16% are carrying debt on their mortgage, and
  • 14% have loan debt

What should seniors acquiring more debt, or anyone with too much debt, to get debt under control? Make a budget, stick to it and pay down high interest debt like credit card debt. If these measures are not enough to deal with your debt issues, you need professional help.

Seniors acquiring more debt should contact a professional trustee as soon as possible. The Ira Smith team are here to help. With a cumulative 50+ years of experience, we deliver the highest quality of professional service. We offer practical advice so you can clearly see the way to move forward Starting Over, Starting Now. Contact Ira Smith Trustee & Receiver Inc. today.

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GEN Y TRAPPED: MILLENNIALS IN DEBT

debt, Millennials, Generation Y, Gen Y, Baby Boomers in debt, seniors in debt, student debt, student loans, credit card debt, bankruptcy, trustee, financial plan, gen y debt, starting over starting now, trustee, millennials in debt, gen y in debtMillennials in debt is an important issue. There’s been a considerable amount of press surrounding the problems facing Baby Boomers in debt and seniors in debt and we’ve devoted quite a few blogs to these very serious issues:

However, the Millennials (children born between 1982 and 2002), also known as Generation Y or Gen Y, feel trapped as millennials in debt. Only now are we realizing how dire their situation is. BMO recently did a survey of Millennials in debt and discovered that:

  • 56% are so anxious about their debt they think about it multiple times a day.
  • 50% said debt has made them lose sleep.
  • Their household debt is $73,305.
  • 50% feel ashamed at the level of debt they’ve accumulated.
  • 50% of Millennials in debt have had arguments with family, friends and partners over debt.
  • 51% have borrowed money from friends or family to manage household debt levels.
  • Nearly 60% viewed their debt as a major personal problem.

In addition Millennials in debt are more burdened by student debt than their elders, according to David Coletto, chief executive officer of Abacus Data. He goes on to say, “People are maxing out their student loans and getting loans from family to supplement.”

The reality is that debt is increasing across all demographics and the issues facing Millennials in debt should not be ignored. Whether their debt originated with student loans, credit card debt or some other issue, it needs to be managed as quickly as possible by a professional trustee. Contact Ira Smith Trustee & Receiver Inc. for professional advice and a solid financial plan so that you can live a debt free life Starting Over, Starting Now.

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PARENTS PAYING STUDENT LOANS: SHOULD YOU BORROW FOR YOUR CHILD’S POST-SECONDARY EDUCATION?

parents paying student loans, subprime loans, subprime loan, debt, credit card debt, post-secondary education, bank card interest rate, credit cards, retirement, student debt, starting over starting nowParents paying student loans as the cost of post-secondary education continues to rise at alarming rates, because student debt has reached critical levels. As a result, many families are taking desperate measures to come up with the money, including maxing out their credit cards, risking their homes and retirement incomes, and resorting to subprime loans.

The Canadian Centre for Policy Alternatives reports:

  • Annual fees at Canadian Universities are projected to rise 13% on average to $7,755, having almost tripled over the past 20 years.
  • Students in Ontario can expect to shell out $9,483 on average in tuition and other compulsory fees in 2017-18. Fees in the province have nearly quadrupled over the last 20 years.
  • The price tag for a university degree is significant: when books, living expenses and transportation costs are added to tuition and other compulsory fees, the cost of a four-year university education is estimated to reach over $80,000; of that, residence is estimated at about $31,000.

How many parents are ready and willing to go into debt to provide their child with a post-secondary education? Canadian parents paying student loans are willing to pay for two-thirds of their child’s total education costs, with 21% saying they’re prepared to foot the entire bill even if it means straining their finances, according to research by CIBC.

Credit Card Debt: According to a recent article in the National Post, the typical bank card interest rate continues to hover around 20% annually and department store cards are closer to 30%. It is never advisable to use your credit cards to pay for post-secondary education. Doing so may create a cycle of debt you may not be able to repay. Parents paying student loans through credit card debt must be avoided.

Risking Your Home or Retirement Income: Consider the possibility that something could happen, making it impossible for you to repay your debt. You could lose your home or sacrifice your retirement income. Can you afford to take that chance? Parents paying student loans cannot take precedence over fiscal prudence as parents near retirement.

Subprime Loans: Typically subprime loans are offered at a rate above prime to people who don’t qualify for prime rate loans because they have low credit scores or other factors that make them a high risk to default on debt repayment. Although the subprime loan’s additional points of interest don’t seem too drastic at first glance, they can add up to tens of thousands of dollars in additional interest over the life of the loan. Parents paying student loans should not do so by taking out subprime loans.

Should you borrow money to pay for your child’s post secondary education? Never max out your credit cards, risk your home or retirement income, and never resort to subprime loans. If you can borrow money in a way that doesn’t jeopardize your home, retirement and financial health, by all means, proceed. If your child is eligible for student loans, then a joint effort between the parents paying student loans and the student through part-time work may be one answer.

If you find yourself in debt for any reason including credit card debt or a subprime loan, contact Ira Smith Trustee & Receiver Inc. Debt should be dealt with as quickly and decisively as possible. Starting Over, Starting Now our team will come up with an action plan to restore your life to financial health as soon as possible.

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DEBT COLLECTORS CALLING: COLLECTION AGENCY AFTER YOU?

debt, debt collector, debt collectors, collection agencies, collection agency, credit record, student loan debt, credit card debt, bankruptcy, trustee, debt collectors calling, starting over starting nowAre debt collectors calling? I recently read an article where the headline was 35% In US Facing Debt Collectors and it’s based on a study by the Urban Institute. This astonished me. How is it possible that 35% of Americans have debts and unpaid bills that have been reported to collection agencies? This means that one in three people in America is being hounded by a collection agency having their debt collectors calling for unpaid bills.

Imagine that one in three of your friends and coworkers are facing serious financial challenges and you probably don’t even know it. According to the study 35.1% of people with credit records had been reported to collections for debt that averaged $5,178, based on September 2013 records. The Association of Credit and Collection Professionals reports that healthcare related bills account for 37.9% of the debts collected. Student loan debt represents another 25.2% and credit card debt make up 10.1%. Other collections are monies owed to the government, retailers, telecoms and utilities. That is giving this industry a lot of work for their debt collectors calling one third of the American population!

This is not just an American problem although in Canada we are extremely fortunate that we don’t incur the amount of healthcare related debt that plagues the U.S. But that doesn’t make us immune from serious debt and debt collectors calling. According to an RBC poll which only measures non-mortgage debt such as credit cards, lines of credit and loans:

  • The average level of personal debt in Canada rose 21% per cent this year to $15,910
  • Albertans were the hardest hit with a 63% jump to $24,271 in debt
  • British Columbian personal debt loads went up by 38% to $15,549
  • Manitoba and Saskatchewan went up 32% to $16,145
  • Average debt in Ontario was up 13% to $17,416
  • Average debt in Quebec was up 3% to $10,458
  • Average debt was up in Atlantic Canada by 12% to $15,243

Before you get to the stage that the collection agencies are after you with their debt collectors calling, make an appointment with a professional trustee and deal with your debt; don’t hide from it. Contact Ira Smith Trustee & Receiver Inc. We help people everyday who are facing a financial crisis or bankruptcy that need a plan for Starting Over, Starting Now. Don’t wait, especially if the collection agencies are hounding you with their debt collectors calling, call us today.

Watch for our next blog when we’ll be discussing what to do if the collection agencies are after you with their debt collectors calling.

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SCARED TO DECLARE PERSONAL BANKRUPTCY?

scared to declare personal bankruptcy, personal bankruptcy, bankruptcy, bankruptcy alternatives, credit counselling, debt consolidation, consumer proposals, consumer debt, credit card debt, debt, trustee, trusteesScared to declare personal bankruptcy? Don’t be. Bankruptcy is a legal process that can provide relief to honest but unfortunate individuals who are unable to pay their debts.

According to the Office of the Superintendent of Bankruptcy Canada:

Employment and Social Development Canada reports:

  • In 2011, 122,999 Canadians were unable to repay their debts.
  • Serious financial difficulties brought them to file either a payment proposal or a bankruptcy. The average amount owed was $119,021.
  • About 53% of Canadians filing a proposal or bankruptcy in 2011 were aged 30 to 49 years.
  • In 2007 individuals who were divorced or separated were more likely to file a proposal or bankruptcy than Canadian adults on average.
  • In 2008 the most frequent type of debt reported by individuals filing a proposal or bankruptcy was credit card debt (91%).

Still scared to declare personal bankruptcy? Huffington Post reports that one in six Canadians will eventually go bankrupt. Don’t be scared to declare personal bankruptcy; there are advantages:

  • It is relatively quick
  • It can be less expensive than other options
  • It eliminates your unsecured debts
  • You will have some protection from creditors, legal action and wage garnisheeing
  • After your discharge your credit risk can start to improve

If you are considering bankruptcy, your first step should be to meet with a trustee. Trustees are individuals licensed by the Office of the Superintendent of Bankruptcy (OSB) to administer the bankruptcy process. Contact Ira Smith Trustee & Receiver Inc. We will evaluate your financial situation and discuss various bankruptcy alternatives which include credit counselling, debt consolidation and consumer proposals that could help you to solve your financial problems. Don’t be scared to declare personal bankruptcy. It’s just an option to consider so that Starting Over, Starting Now you can be well on your way to financial health.

 

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NO CREDIT CHECK LOAN: FOR CANADA DAY?

no credit check loan, credit card debt, July 4, Independence Day, Canada Day, good debt, bad debt, credit counselling, bankruptcy alternatives, consumer proposal, consumer proposals, bankruptcy, student loans, line of credit, bad credit, licensed professional trustee, trustee, starting over starting now, debt consolidation, bankruptcy faqsThe no credit check loan and credit card industries are being used to fund holiday travel. The American Automobile Association reported that: “This year nearly 41 million Americans plan to celebrate the nation’s birthday with a getaway…” said AAA President and CEO Robert L. Darbelnet.

AAA also reported that this July 4 Independence Day travel is because of the willingness of consumers to take on debt, NOT an increase in income, to fund for the increase in consumer spending. No credit check loan debt and credit card debt is cited as the two credit vehicles of choice being used to fund travel.

In July 2013 we discussed how even high flyers can’t sustain the income to fund their lifestyles, so all demographics means the rich and famous are included. In April 2014 we discussed that debt is increasing in Canada across all demographics, and at alarming rates. A check of our analytics indicates that “no credit check loan” and similar bad credit loan searches are by far outweighing other keywords that people are using. Every day, fewer and fewer people are using keyword search terms such as credit counselling, bankruptcy alternatives, consumer proposals or bankruptcy.

It would appear that Canadians are also much more willing to take on more debt, even though they know they have a debt problem because of a bad credit score. We know that there are two types of debt: good debt and bad debt. If there is such a thing as good debt and bad debt, what’s the difference? The distinction is based on the purpose for which it is taken on. Good debt can be defined as anything that builds your assets or increases the potential for you to earn more money. Bad debt is typically incurred to purchase things that have no value or quickly lose their value and usually carries a very high interest rate – which more often than not is found in no credit check loan debt and credit card debt.

Some examples of good debt:

  • Mortgage
  • Real estate
  • Student loans from the provincial or federal government
  • Investment loans

Some examples of bad debt:

There are a lot of people with bad credit who are feeling pain in our society and believe that another no credit check loan is their solution. These people are misguided in that they think that a further high cost no credit check loan will solve their problem. I understand the way these people think. It is hard for us to face our challenges. Whether it is about our health, our family or our financial situation, it is difficult and painful to look at our problems straight in the face, especially if we are the one who created the problem. These people mistakenly think that taking on more debt is the solution.

Well, it is not. These people need to recognize that their credit score is so poor because of choices they have made in the past, and their behaviour has to change. Taking on more debt through a high cost no credit check loan is just increasing their problems. They need to look at ways to budget so that their expenses are less than their income. They need to start saving to pay down debt.

If they can’t do it on their own, then they must consult a licensed professional trustee who can discuss options with them: budgeting, bankruptcy alternatives such as debt consolidation or a consumer proposal or perhaps even bankruptcy. If this sounds like you, contact Ira Smith Trustee & Receiver Inc. right away for a no charge consultation. You can even check out our bankruptcy faqs now online here. We will go over all of your options, and encourage and help you to implement the one that is right for you so that together we can solve your problems with immediate action and the right plan so that Starting Over, Starting Now will become your reality.

In the meantime, whether you are travelling for this Canada Day holiday or relaxing at home, we wish you a safe, fun, relaxing and hopefully only a good debt Canada Day holiday with family and friends.

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IS BABY BOOMERS DEBT PREVENTING THEM FROM GETTING MARRIED?

IS DEBT PREVENTING BABY BOOMERS FROM GETTING MARRIED?Baby boomers debt is having an effect on baby boomers who wish to get married, but won’t. Shacking up is not exclusively for young people bucking societal traditions. About 33% of Baby Boomers are unmarried today and many are opting to live together instead of getting married, according to a survey done by the National Center for Family and Marriage Research at Bowling Green State University in Ohio. In fact, the number of Baby Boomers living together has more than doubled in 10 years – about 2.75 million people over the age of 50 were cohabiting in the United States in 2010 compared to 1.2 million a decade earlier, according to the research. U.S. Census Bureau data shows adults older than 50 are among the fastest growing segment of unmarried couples in the U.S.

Why are Baby Boomers choosing to cohabitate instead of tying the knot? The most common reason cited is money – debt, benefits, taxes and cash flow are preventing couples from saying I Do. Many Baby Boomers have assumed a heavy debt load as a result of:

Debt has hit the Baby Boomers hard and many are reluctant to enter into a marriage where they may be assuming additional debt as a result of the marriage. Others are reluctant after having suffered financially as a result of grey divorce. There are many reasons that Baby Boomers are in debt and we have explored them in several blogs – Baby Boomers Debt: Reasons Why It Is So High, Baby Boomers Debt Crisis: Waiting For An Inheritance To Bail You Out, and Grey Divorce Can Create Serious Debt For Boomer Retirees.

If you’re experiencing serious debt issues, then you already know that debt doesn’t miraculously disappear on its own. You need professional help and a solid plan for moving forward with your life Starting Over, Starting Now. Don’t let debt prevent you from doing the things that are important to you. Contact Ira Smith Trustee & Receiver Inc. today and take the first step towards living a debt free life.

Call a Trustee Now!