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DEBTS SOLUTION: STRATEGIES TO DODGE CORRUPT DEBT RELIEF SCAMS

picture of man deep in debt going over a contract to hire a debts solution settlement company
debts solution

Debts Solution: Introduction

Facing soaring expenses in housing, groceries, and fuel, Canadians grapple with amplified financial strains. The mounting necessity for a debts solution burgeons as debt problems and insolvencies surge. Seeking expert guidance becomes pivotal, steering clear of pitfalls entwined in deceptive debt relief enticements posing as saviours.

In this Brandon’s Blog, I provide insights on mitigating exposure to these cunning ploys by discussing the common warning signs that are prevalent with a debt help scammer. Unearth methods to shield you from the clutches of debt relief scams. Acquire proficiency in detecting warning signals, discerning credible services, and fortifying yourself against deceitful machinations. Delve into tangible scenarios and preemptive strategies to navigate the labyrinthine terrain of a possible debts solution, safely and securely.

Debts Solution: Recognizing Debt Relief Scams

Navigating through debt’s labyrinth often induces immense stress and a sense of being inundated, prompting many individuals to seek solace in debt alleviation initiatives. Yet, exercising prudence and vigilance within this sphere holds paramount significance. Within this industry, deceptive stratagems loom from for-profit debt settlement companies, preying on the susceptible, and exacerbating their financial woes. Deciphering these deceitful maneuvers becomes pivotal; doing so empowers you to shield yourself and judiciously discern the avenues for debt alleviation at your disposal.

Debts Solution: Scammers often ask for upfront fees and make unrealistic promises

Identifying a potential debt relief company scam often hinges on a prominent signal: the insistence on upfront fees by the entity or individual. Authentic debt relief programs typically levy charges solely after achieving a triumphant negotiation or formulation of a repayment strategy. Conversely, imposters brazenly demand payment in advance, vanishing into thin air without rendering any tangible aid.

Moreover, these malevolent actors might peddle unattainable assurances regarding debt eradication or swift resolution of financial problems. It’s imperative to grasp that an overnight miraculous debt dissolution remains an illusory prospect. Legitimate debt mitigation ventures engage in protracted negotiations with creditors, aiming for diminished interest rates or modified payment schemes. This, however, demands time and harmonious collaboration among all involved stakeholders.

When scrutinizing a debt relief initiative, exercise caution toward those espousing immediate or fanciful outcomes. Reputable entities furnish pragmatic prognoses, collaborating with you to sculpt a sustainable blueprint for enduring financial balance and security while providing you with lasting strategies to continually improve your financial situation.

Debts Solution: Beware of anyone who advises you to stop communicating with and paying your creditors

A conspicuous red flag signalling potential deceit in a debt relief scheme emerges when the program advocates severing communication and payments with your creditors. While succumbing to the allure of dodging creditor calls and missives may seem appealing, sidestepping dialogue can exacerbate your predicament.

Genuine debt mitigation programs engage in dialogue with your creditors, endeavouring to forge fresh payment terms or negotiate reduced settlements. They champion transparent communication and harmonious collaboration among all stakeholders. Conversely, swindlers might counsel total cessation of contact with creditors, precipitating escalated interest, penalties, and even legal ramifications.

Should a debt relief program advocate complete cessation of creditor payments, it unequivocally betrays your best interests. Upholding your financial commitments to the best of your capacity remains crucial while charting a course toward resolution via a reputable, trustworthy debts solution avenue.

Debts Solution: Debt relief scams may operate via social networks, text, or email

In the digital age, debt relief frauds have actually discovered their way onto various online platforms. Debt settlement firm fraudsters might connect to you with social media sites, text, or email, encouraging quick and very easy services to your financial obligation troubles.

If you obtain unwanted messages from unidentified sources offering debt settlement solutions, use caution. Reputable debt relief programs typically do not participate in hostile or unsolicited advertising and marketing tactics. It is necessary to do your research study and thoroughly vet any type of company before giving them personal information or agreeing to work with them.

When researching debt settlement choices online, be sure to verify the firm’s credentials and try to find reviews and testimonies from other customers. In addition, inspect if the firm is associated with any reliable industry organizations or if they have any accreditations that demonstrate their competence and trustworthiness.

picture of man deep in debt going over a contract to hire a debts solution settlement company
debts solution

Debts Solution: Seeking Professional Help

Seeking adept guidance from recognized experts in managing your finances and addressing debt problems is a prudent choice. Licensed insolvency trustees emerge as specialists adept in aiding individuals and companies to restructure their way through financial quagmires. Their realm encompasses proffering no-cost initial consultations, delving into your fiscal panorama, dispensing counsel, and facilitating the exploration of diverse avenues in debt management.

The following are 3 legitimate options to consider in solving debt problems. In fact, the debts solution scammers, after sucking as much money out of you as they can, then introduce you to a licensed insolvency trustee to execute one of the below options. Why not avoid the middleman debts solution scammer? All of the “services” they provide, for which they charge you thousands of dollars, you can get from a licensed insolvency trustee during the initial no-cost consultation.

Here are 3 legitimate debt relief options for anyone looking for a debts solution:

Debts Solution: Debt Management Plan


A structured repayment scheme, a debt management plan, proves instrumental in efficaciously steering individuals through their debt labyrinth. Collaborating with a licensed insolvency trustee ensures in tailoring a blueprint attuned to your distinct fiscal landscape. Herein, regular remittances through a payment schedule are made to the trustee to find dispersion among your creditors under their auspices.

The virtues of a debt management plan abound. Primarily, it amalgamates your debts into a singular monthly payment, streamlining financial oversight. Coupled with this, it commonly encompasses a diminished interest rate, harbouring potential savings in the long haul. Furthermore, active participation in such a plan potentially serves as a conduit for the reconstruction of your credit score, contingent upon consistent and punctual payments.

 

Debts Solution: Consumer Proposal

Should your financial circumstances veer toward a more severe terrain, contemplating the avenue of a consumer proposal emerges as a viable debts solution recourse. It constitutes a binding accord, ensconced in legality, forged between you and your creditors, shepherded by a licensed insolvency trustee. It is the only approved debt settlement government program. In a consumer proposal, your trustee takes over all communication with creditors, freeing you of this burden.

Within this framework, you proffer a proposal to reimburse a segment of your unsecured debts over a stipulated timeframe, commonly spanning five years. This offer is grounded in your reasonable capacity and only requires you to pay a portion of the total indebtedness. Upon acceptance by your creditors, monthly disbursements to the trustee ensue, who, in turn, channels these funds to your creditors. After completing your total set of monthly payments, your entire debt is wiped out.

The merits of opting for a consumer proposal are many. Firstly, it furnishes immediate shielding against collection calls, wage garnishments and legal action reprisals instigated by your creditors. Simultaneously, it facilitates a reduction in your cumulative debt burden, given that the repayment amounts to less than the owed sum. Additionally, resorting to a consumer proposal carries less weight than declaring bankruptcy, exerting a comparably milder impact on your credit standing.

Debts Solution: Bankruptcy as a Last Resort

As a final debts solution recourse, bankruptcy emerges as a potential remedy for individuals ensnared in insurmountable debt with no viable alternatives. This legal recourse orchestrates a fresh start by absolving a significant portion of debts, facilitating a reboot of one’s financial trajectory and life.

However, navigating the terrain of bankruptcy demands judicious consideration, given its weighty repercussions. The enduring impact on your creditworthiness, spanning multiple years, can pose hurdles in securing future credit. Furthermore, the liquidation of certain assets to reimburse creditors and potential constraints on professional accreditation warrant conscientious contemplation in discussion with a licensed insolvency trustee.

Prudent counsel from a licensed insolvency trustee assumes paramount significance before delving into bankruptcy. Our expertise enables a comprehensive no-cost evaluation of your circumstances, guiding you toward the most fitting pathway forward.

Credit counseling is an important aspect of any service provided by a licensed insolvency trustee.

Debts Solution: Protecting Yourself from Fake Loan Scams


Many times debts solution scammers combine a mandatory loan program with their debt relief package. Here are some tips on how to avoid being a victim of these loan program scams.

Be cautious of deals that require payment upfront or appear too good to be real

A substantial indicator of a spurious finance scam materializes when the lender needs payment before finalizing the loan. That is what a bogus debt relief company does or arranges for you. Reputable companies who lend money typically deduct any type of fees or expenditures from the loan itself, avoiding any kind of in-advance payment. Furthermore, lenders that appear excessively beneficial are commonly deceptive. Fraudsters often attract people with implausibly low-interest rates or guarantees of assured loan authorizations, departing from the reasonable standards of the lending world.

Phony lending rip-offs assure loans even with a negative credit history yet never provide the loan

If you have a negative credit rating, scammers may attempt to take advantage of your scenario by encouraging loans without credit history checks or with assured authorizations. Nonetheless, genuine lending institutions always analyze the creditworthiness of a borrower before approving a loan. If a lender is not interested in your credit rating and claims to supply financing to any individual despite their credit rating, it is likely a fake funding fraud. Remember, no lender can ensure funding without appropriate analysis.

Stay clear of offering individual or financial details to unidentified sources

Protecting your personal and financial info is vital in the electronic age. Fraudsters may pose as loan providers and demand sensitive info, such as your social insurance number, bank account details, or driver’s certificate information. Never offer such information to unknown sources or through unknown sites or channels. Genuine lenders will have protected systems in position to secure your data, and they will not ask for unnecessary individual or financial information.

picture of man deep in debt going over a contract to hire a debts solution settlement company
debts solution

Debts Solution: Conclusion

Getting specialist support from a licensed insolvency trustee is essential in working through the details of your financial debt and money obstacles. Licensed insolvency trustees stand as important wellsprings, supplying invaluable advice, support, and strength for you to navigate the puzzle of economic problems. Whether designing a debt management plan approach or considering a consumer proposal, embarking on these paths alongside a seasoned specialist will let you recover your authority over your entire life. It minimizes the difficult anxiety you have carried and moulds a course towards a much more positive financial destiny.

I hope you enjoyed this debts solution Brandon’s Blog. If you’re struggling with managing your overwhelming debt, don’t worry – there are some things you can do to take control of the situation. It is not your fault you can’t fix this problem on your own and it does not mean that you are a bad person.

First, it’s important to create a realistic budget and track your expenses. From there, you can prioritize your debt repayment and make consistent payments to chip away at what you owe. It’s also a good idea to seek professional financial advice to help guide you through the process. Just remember, managing debt is a gradual process that requires commitment and determination, but you can do it! So don’t hesitate to reach out for help from financial professionals.

Individuals and business owners must take proactive measures to address financial difficulties and promptly seek assistance when necessary. It is crucial to recognize that financial stress is a prevalent concern and seeking help is a demonstration of fortitude, rather than vulnerability. Should you encounter challenges in managing your finances and find yourself burdened by stress, do not delay in pursuing aid.

Revenue and cash flow shortages are critical issues facing people, entrepreneurs and their companies and businesses with debt problems that are in financial distress. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind.

The Ira Smith Team understands these financial health concerns. More significantly, we know the requirements of the business owner or the individual who has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team uses innovative and cutting-edge methodologies, to adeptly navigate you through the intricacies of your financial challenges, ensuring a resolution to your debt-related predicaments without resorting to the rigours of the bankruptcy process. We can get you debt relief now!

We have helped many entrepreneurs and their insolvent companies who thought that consulting with a Trustee and receiver meant their company would go bankrupt. On the contrary. We helped turn their companies around through financial restructuring.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

The Ira Smith Trustee & Receiver Inc. team understands that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.

picture of man deep in debt going over a contract to hire a debts solution settlement company
debts solution
Categories
Brandon Blog Post

NAVIGATING THE CANADIAN CREDIT CARD MINIMUM PAYMENT CRISIS: A COMPREHENSIVE REPORT ON RECORD-HIGH CREDIT CARD BALANCES

A husband and wife experiencing massive financial stress over their very high credit card balance
credit card minimum payment

Credit card minimum payment crisis: Introduction

In today’s high-interest setting, handling financial obligations has actually ended up being even more vital for people. With increasing rates of interest, it is necessary for Canadians to have a distinct budget plan as well as be mindful of their spending habits. By applying efficient strategies such as monitoring expenses, focusing on debt repayment, and even seeking advice from a professional, individuals can take proactive actions toward handling their financial debt as well as enhancing their financial well-being.

The increasing credit card balances in Canada and the resulting high credit card minimum payment requirements are a reason for worry. Equifax Canada reports that in the 2nd quarter of this year, total credit card balances in Canada reached an all-time high of $107.4 billion. This, along with the shocking consumer debt of $2.4 trillion, paints a worrisome image of Canadians’ financial circumstances in the nation.

In this Brandon’s Blog post, we will certainly check out the variables contributing to this alarming fad and go over potential remedies for people to manage their financial debt efficiently.

Overview of the Canadian credit card system

The Canadian credit card system is a well-established and regulated industry that caters to a wide range of consumers, from individuals to businesses of all sizes. The system is overseen by the Financial Consumer Agency of Canada and the Office of the Superintendent of Financial Institutions, which ensure that credit card issuers and lenders follow strict guidelines and regulations.

There are numerous credit card options available in Canada, ranging from basic cards with no annual fees to premium rewards cards with high annual fees. Consumers are encouraged to compare rates, rewards, and terms of various credit cards before selecting one that best fits their needs and financial situation. Overall, the Canadian credit card system offers a reliable and diverse range of options for consumers and businesses alike.

A husband and wife experiencing massive financial stress over their very high credit card balance
credit card minimum payment

Definition of credit card minimum payment crisis

The Canadian credit card minimum payment crisis really is “a thing”. It’s a bit of a tricky situation where some people are having a tough time paying off their credit card debt on time when the credit card statement arrives. Their current balance each month is very high, so, they can only afford to make their monthly credit card minimum payment amount. Unfortunately, this has led to a lot of people getting stuck in a cycle of debt, with their credit card balances just getting bigger and bigger.

It’s not a great situation, and it’s mainly caused by credit card companies charging really high interest rates. To make things worse, this can have a pretty big impact on people’s financial health. That’s why it’s super important that we pay attention to this issue and work together to find solutions.

Credit card minimum payment: The alarming statistics

The level of consumer debt in Canada has actually reached an alarming level. As of the 2nd quarter in 2023, the complete consumer debt stands at an incredible $2.4 trillion. This implies that Canadians are lugging around a considerable amount of debt on their shoulders.

One certain area of worry is charge card outstanding balances owing to all Canadian credit card issuers. The complete Canadian credit card debt of $107.4 billion mentioned above is an all-time high. This suggests that Canadians are relying greatly on their credit cards to finance their day-to-day costs and are often having a hard time paying off the balances in a timely manner. Hence only the credit card minimum payment is being paid every month.

These statistics are a wake-up call for individuals to resolve their debt and financial management approaches. High levels of financial debt can bring about monetary anxiety and also can limit people’s capability to attain their financial goals. It is vital for Canadians to take aggressive steps to manage their financial debt as well as restore control of their financial resources.

A husband and wife experiencing massive financial stress over their very high credit card balance
credit card minimum payment

Credit card minimum payment: The impact of high consumer debt

Excessive consumer financial indebtedness possesses the capacity to wield a profound impact on an individual’s fiscal well-being. It possesses the potential to initiate a recurring loop of financial commitments, wherein individuals encounter considerable difficulty in meeting their customary monthly disbursements, often resorting to the utilization of credit cards or loans as a means to underwrite their fundamental living costs.

This, in turn, may precipitate a descent into an ever-expanding abyss of financial obligations, accompanied by the burden of exorbitant interest disbursements, culminating in an overarching ambiance of financial strain.

Moreover, high degrees of financial debt impede people’s capacity to save for the future. When a substantial portion of earnings is allotted towards debt settlements, there is less money offered for financial savings as well as investments. This can hamper people’s capability to attain their stable financial objectives, such as homeownership, entrepreneurship, or retirement cost savings.

Credit card minimum payment: Factors contributing to high debt levels

The rising cost of living mixed with high interest rates are major contributors to the boosting debt levels in Canada. Canadians are depending more on credit cards to supplement their income in order to manage their living expenses. This technique may become difficult to sustain as the credit card debt levels and the credit card minimum payment each month continue to rise. Left unchecked, eventually, they will become unsustainable. In addition, the Bank of Canada’s steady interest rate increases while trying to combat inflation, have actually additionally aggravated the financial debt concerns for Canadians.

Living costs, such as housing, transportation, and food, have been continually increasing over the last few years. This has placed additional strain on the finances of Canadians, making it hard for them to cover their fundamental requirements without counting on their credit card to fill in for their income gap. The cost of housing has increased, particularly in major cities like Vancouver and Toronto. Consequently, families are juggling considerable amounts of financial obligations in order to afford a place to live and food to eat.

In addition, the higher interest rates on loans and credit cards make it more challenging for individuals to repay their financial obligations. With annual credit card interest rates running at 20% or more, it is no wonder that many Canadians can only afford to pay their credit card minimum monthly balance and no more. For those individuals who are making only their monthly credit card minimum payment, a substantial part of their credit card payment goes towards interest as opposed to paying the principal amount owed. Therefore, debt levels can rapidly spiral out of hand.

Relying upon credit cards to augment your income might inadvertently push you into the labyrinth of debt, a precarious path that could swiftly usher in an endless spiral of indebtedness. It becomes imperative to grasp the notion that this course of action harbours substantial risks, capable of precipitating an unceasing vortex of financial burden.

Fortuitously, the capability resides within you to seize command of your financial affairs and institute constructive alterations. The moment has arrived to initiate contemplation regarding the intricacies of budgeting and strategizing for your household expenditures, as opposed to merely leaning on credit cards to bridge the fiscal chasms. Through this proactive approach, you can elude impulsive expenditures and rigorously monitor your financial outflows.

In light of the escalating interest rates, the significance of vigilantly attending to your household budget cannot be overstated. While this endeavour may initially appear daunting in its intricacy, it signifies an opportune moment to embark on a transformative journey toward a more auspicious fiscal horizon. Keep in mind, that the capacity to effectuate change lies well within your grasp.

The climbing cost of living and higher interest rates are the major factors in the increasing financial obligation levels of Canadians. People are counting on credit cards to improve their cash flow and only being able to make their credit card minimum payment each month. This strategy becomes tougher with each passing month. Furthermore, the increase in rates of interest has served to intensify the financial debt worry for Canadians. Left unchecked, this will only lead to more Canadians faltering under such a cycle of debt.

A husband and wife experiencing massive financial stress over their very high credit card balance
credit card minimum payment

Credit card minimum payment: Struggles with basic necessities

As financial debt levels rise, financial stress is taking a toll on people and families, highlighting the urgent requirement for effective debt management approaches.

Food

Among one of the most basic necessities of life is food. However, for many Canadians burdened with financial debt, putting food on the table has actually ended up being a daily struggle. Rising living expenses, stationary salaries, as well as high levels of debt make it challenging for people as well as families to pay for nutritious food.

The expense of food has actually been steadily rising, being a main driver of as well as really outmatching the rising cost of living in most cases. This, integrated with limited funds, leads to tough selections for individuals and families. Some may resort to acquiring less costly, processed foods with low nutritional value, while others might avoid meals completely.

The lack of ability to afford proper nourishment not only influences physical health but also psychological health and overall health. Canadians facing this battle might experience greater degrees of tension and anxiety, which can even worsen their monetary circumstances.

Transportation

Another basic need that becomes tough to afford under rising debt is transportation. Lots of Canadians depend on cars and trucks or mass transit to commute to work, gain access to healthcare, or run essential duties. Nevertheless, the expense of owning and preserving an automobile or paying for public transportation can swiftly accumulate, leaving little room to allocate for various other daily requirements.

For individuals residing in areas with restricted public transport alternatives, possessing one or more vehicles ends up being necessary for daily activities. However, the prices connected with car loan payments, insurance policy, gas, and upkeep can become overwhelming, especially when incorporated with other financial responsibilities.

Even for those who rely upon public transportation, the cost of fares can be a considerable concern. While some cities have executed subsidized transportation programs for low-income individuals, not all Canadians have access to such support.

Housing

Budget-friendly real estate is an essential necessity for all individuals and families. However, with climbing house prices, rents and increasing debt levels, numerous Canadians are struggling to locate and maintain ideal living arrangements.

The high expense of rental costs or home mortgage payments, combined with various other housing-related costs such as utilities, property tax and insurance, can rapidly eat into a family spending plan. This leaves little room for various other crucial expenses and also boosts financial tension.

Additionally, limited inexpensive housing choices imply that those who are lucky enough to find low-cost living arrangements are paying for that in another way. To get affordable housing, numerous Canadians are required to reside in inadequate or risky conditions. This compromises their total health and can have long-term health and wellness ramifications.

Credit card minimum payment: The importance of addressing debt and financial management

Given these disconcerting statistics, it is essential for people to address their financial debt and execute efficient financial monitoring methods. The first step is to create a sensible budget that lays out revenue and expenditures. By monitoring expenditures and identifying areas where spending can be decreased, people can free up additional money to put in the direction of debt repayment.

An additional strategy to consider is debt consolidation. This involves incorporating several debts into one financing, commonly with reduced rates of interest. Financial debt consolidation can make it simpler to manage debt by simplifying month-to-month payments and reducing the overall amount of interest paid.

It is additionally important to establish a reserve. A reserve can provide a safeguard against unexpected costs and also can help stop individuals from counting on credit cards or personal loans to cover emergency expenses. Building a reserve requires time, yet beginning with little, routine payments can make a considerable distinction gradually.

Finally, looking for professional advice may be valuable for people who are struggling with financial debt. Credit counselling, but only from non-profit community organizations, can supply support and assistance in managing financial debt, creating a budget, and also creating a strategy to end up being debt-free.

Take control of your financial future by addressing your financial obligations and implementing efficient financial monitoring techniques. Keep in mind, that it is never too late to begin working towards a financially stable future.

By taking proactive actions to deal with debt as well as applying sound financial budgeting and monitoring approaches, people can gain back control of their finances as well as work in the direction of long-lasting financial stability. It might need dedication and sacrifices, but the rewards of economic flexibility and comfort are priceless.

A husband and wife experiencing massive financial stress over their very high credit card balance
credit card minimum payment

Credit card minimum payment: Effective debt management strategies

To get over the battle with basic requirements caused by mounting financial debt, Canadians need reliable financial debt monitoring techniques. Below are some crucial actions people can take:

  • Create a household budget plan and stay with it. Tracking revenue as well as costs is essential for recognizing where costs can be lowered and savings can be made.
  • Prioritize debt payment. Focus on paying off high-interest debts initially, such as credit cards or payday advance loans, to minimize the rate of interest charges.
  • Check out financial debt consolidation alternatives. Rolling several high-interest-rate financial obligations into a solitary lower-rate loan can make repayments much more workable.
  • Look for professional guidance. Consulting with a financial consultant or non-profit credit counsellor can provide beneficial advice on handling debt as well as boosting financial wellness.
  • Think about debt relief programs. In extreme cases, people dealing with unrestrained financial obligations may take advantage of government-approved debt relief options such as a consumer proposal. These ought to be thought about as a last option after checking out all other opportunities.

By embracing effective financial debt administration techniques along with taking proactive action in the direction of lowering financial commitments, Canadians can alleviate their monetary tension and acquire back control over their lives. The fight to pay for the essential requirements of life in the face of mounting financial obligations is a problem in Canada. It is essential for our federal policymakers to acknowledge the injury they are doing to Canadians and address this troubling situation.

Credit card minimum payment: The consequences of accumulating debt

The act of accumulating debt, particularly through the use of credit cards with high balances, can significantly impact an individual’s financial stability. The consequences that may arise from such a situation can be numerous and severe, including:

  • High-interest payments: Credit cards commonly feature a high annual interest rate, which significantly boosts the expense of carrying an outstanding balance. As the financial obligation accumulates, people find it costing them a lot more in interest charges, making it tougher to pay back the actual amount originally charged. When people try to conserve cash by only making the credit card minimum payment, the total debt keeps ballooning. This makes it so you can never catch up.
  • Damages to the credit report: When credit card balances continue to rise and be high, it negatively influences people’s credit scores. This is a considerable factor in determining their credit rating. A reduced credit score can make it tough to get new loans or get a beneficial rate of interest in the future.
  • Financial stress and anxiety: The burden of high credit card balances can trigger significant stress and anxiety. Individuals may constantly worry about their financial obligations and battle to satisfy their monetary obligations, causing a decreased lifestyle that can certainly lead to anxiety, depression and other health problems.
  • Limited economic flexibility: High bank card balances limit people’s financial flexibility and prevent them from accomplishing their financial objectives. It becomes difficult to save for emergency situations, spend on necessities, or make a significant purchase when a large part of their income goes towards trying to maintain financial debt repayment.

Credit card minimum payment: Conclusion

I hope you enjoyed this credit card minimum payment Brandon’s Blog. If you’re struggling with managing your debt in a high-interest environment, don’t worry – there are some things you can do to take control of the situation. First, it’s important to create a realistic budget and track your expenses. From there, you can prioritize your debt repayment and make consistent payments to chip away at what you owe. It’s also a good idea to seek professional financial advice to help guide you through the process. Just remember, managing debt is a gradual process that requires commitment and determination, but you can do it! So don’t hesitate to reach out for help from financial professionals.

Individuals and business owners must take proactive measures to address financial difficulties and promptly seek assistance when necessary. It is crucial to recognize that financial stress is a prevalent concern and seeking help is a demonstration of fortitude, rather than vulnerability. Should you encounter challenges in managing your finances and find yourself burdened by stress, do not delay in pursuing aid.

Revenue and cash flow shortages are critical issues facing people, entrepreneurs and their companies and businesses with debt problems that are in financial distress. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind.

The Ira Smith Team understands these financial health concerns. More significantly, we know the requirements of the business owner or the individual who has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

It is not your fault you can’t fix this problem on your own and it does not mean that you are a bad person. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team uses innovative and cutting-edge methodologies, to adeptly navigate you through the intricacies of your financial challenges, ensuring a resolution to your debt-related predicaments without resorting to the rigours of the bankruptcy process. We can get you debt relief now!

We have helped many entrepreneurs and their insolvent companies who thought that consulting with a Trustee and receiver meant their company would go bankrupt. On the contrary. We helped turn their companies around through financial restructuring.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

The Ira Smith Trustee & Receiver Inc. team understands that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.

 

A husband and wife experiencing massive financial stress over their very high credit card balance
credit card minimum payment
Categories
Brandon Blog Post

BILL PAYMENT DIFFICULTIES? OUR COMPLETE ROADMAP TO GET CANADIANS SAFELY THROUGH THEIR FINANCIAL DIFFICULTIES

bill payment

Bill payment introduction

Today’s Brandon’s Blog discusses practical ways to take care of financial challenges connected to bill payment in Canada. As the economic climate develops and interest rates keep rising, it’s vital to have a trusted expenditure technique to adhere to. Current research from TransUnion, a Canadian credit bureau, highlights the significance of financial management.

According to the Q1 2023 Customer Pulse study by TransUnion, virtually one-third of Canadian homes checked are facing more difficult times with money, with the rising cost of living being the primary contributing factor.

It can be frustrating to always try to catch up to rising prices, particularly when faced with unanticipated financial setbacks. Juggling all your payments, such as utilities, rent, food and credit cards, can trigger anxiety and stress. Nonetheless, with the ideal knowledge and devices, it’s possible to get rid of these obstacles and reclaim control over your finances and also enhance your general well-being.

Join me as I check out the different techniques you can embrace to effectively manage your bills. I will provide you with detailed advice on developing efficient approaches to bill payment so you can stay clear of late payment penalties.

Financial stability incorporates more than just paying your bills on time. It involves creating healthy financial practices, boosting budgeting skills, and producing a solid foundation for future financial success. This Brandon’s Blog will certainly also delve into these aspects, supplying recommendations on just how to achieve lasting economic stability.

Whether you are a consumer struggling to keep current with all your regular monthly costs or an entrepreneur facing expense management challenges, this information is for you.

So, if you are ready to take control of your expenses and gain back financial stability, stay tuned and don’t go anywhere.

Understanding the challenges of bill payment

The Canadian economy is constantly evolving, influenced by both domestic and global factors. As we navigate through unprecedented times, understanding the current economic landscape in Canada is critical for individuals, businesses, and policymakers alike. Key components of the current Canadian economy, such as GDP growth, inflation, employment rates, and trade all influence how well off we feel. Layer on top of that the impact of the COVID-19 pandemic on the Canadian economy, and the measures that the government took to address the crisis.

All of this combined affects our comprehensive understanding of the state of the Canadian economy, and how it may affect your personal or professional life. Suffice it to say that economists do not agree on the current state of Canada’s economic landscape and whether or not the Bank of Canada should keep raising interest rates.

Canadians are not the only ones affected by bill payment problems. Here is a small sample of issues that were reported in the media last week:

  • Twitter faces lawsuits over alleged non-payment for office services in four countries.
  • New South Wales energy bill relief for struggling families trying to make regular payments.
  • Australian Telcos must offer financial hardship assistance.
  • Low-income Tulsa households are now eligible for federal assistance with their water bills and sewer bills.
  • Millions of Aussies have been placing buy now, pay later (BNPL) payments ahead of their other monthly obligations, according to new research. Around two in five (43%) Australians used a BNPL account in the past six months, a Finder survey of 1,090 respondents revealed.

Bill payment problems can impact the financial security of individuals and their households. Failure to make on-time payments results in extra charges, which can cause serious emotional stress. In addition, missing out on payments will negatively influence your credit score.

For family members, bill payment issues can result in heightened tension as they try to manage their expenditures and make ends meet. This can cause relationship stress, as money worries are a usual reason for arguments.

To alleviate these concerns, households need to develop a spending plan to ensure that they can first understand what their income (net of tax obligations) is, as well as what their essential and non-essential expenses are. It is just after that can any individual appropriately understand exactly how to deal with bill payment concerns.bill payment

Identifying the root causes of bill payment issues

There can be many root causes of bill payment issues. Here are some usual ones:

Financial restrictions: Among the key factors for bill payment problems is financial problems. If an individual is facing financial restraints, they will struggle to have enough money to make all bill payments on time every month, resulting in postponed payments.

Lack of budgeting: Poor or no budgeting or financial planning can contribute to bill payment problems. If individuals don’t properly budget adequate funds for expenses or prioritize their expenditures correctly, they will struggle to pay their bills on time.

Unforeseen costs: Unanticipated costs, such as emergency vehicle repairs, can interrupt a person’s financial security and also make it meet all bill payment dates. These unanticipated situations can trigger short-term money strain.

Inadequate income: Insufficient income makes it impossible for individuals to cover their regular monthly costs. If somebody’s earnings are inadequate to satisfy their financial responsibilities, they will have bill payment problems.

Incorrect invoicing or disagreements: In some cases, bill payment issues result from mistakes in the invoices or disagreements regarding what the cost of a particular item should have been. This is the easiest one to fix, assuming you have proof that you have been improperly billed. This also assumes that you have enough cash on hand to immediately pay off the right amount owing.

Lack of organization: Poor financial habits or disorganization can add to bill payment issues. If people fail to keep track of their expenses, due dates, and what is owed, they might overlook or neglect to make timely payments.

Communication issues: Lack of clear and timely communication between service providers and customers can lead to payment problems. Misconceptions, hold-ups in getting bills, or failure to inform customers concerning when payment is expected can add to bill payment troubles.

Change in personal conditions: Life events such as job loss, divorce, or moving can disrupt a person’s financial security and lead to bill payment problems. Modifications in personal circumstances can cause what is hoped to be only temporary bill payment problems.

Procrastination or carelessness: Often, bill payment problems happen due to laziness or carelessness. Individuals might delay bill payments or neglect them totally, bringing about late payment fees. At its worst, this can lead to service disruptions.

It is very important to keep in mind that the root causes of bill payment problems can vary depending on a variety of issues. Addressing these reasons frequently calls for proactive financial planning, budgeting, proper communication and regular ongoing review to make sure that your bills are paid on schedule.

Strategies for effectively managing your bills

Over the years, I have written many articles on various strategies for taking charge of your finances to avoid financial problems. Most recently, it was discussed in Brandon’s Blog “UNDERSTANDING AND OVERCOMING FINANCIAL STRESS: A COMPREHENSIVE GUIDE TO GET FROM WORRIED TO WELL-PREPARED”.

Here are some strategies for helping with bill payments. The following list is not mutually exclusive:

Importance of budgeting in bill payment

Handling bill payments efficiently demands making use of budgeting, an essential tool. Budgeting offers individuals an extensive understanding of their earnings and expenses, enabling them to allot funds appropriately. By creating a budget, people can prioritize their expense repayments, making sure that essential costs are paid on time.

This technique does not just help in avoiding late payments, fees, as well as added interest charges. It also facilitates the identification of non-essential expenditures that can be lowered or gotten rid of entirely. This, in turn, lets you make the most of your funds for what is essential and what isn’t. Welcoming this proactive approach to financial planning is important for recovering your financial security.

Prioritizing bills and negotiating payment plans

Handling your funds properly includes the important job of prioritizing expenses and even negotiating extended payment plans with certain creditors to allow for reduced payments over time to pay off an outstanding balance in full. It’s important to recognize which costs hold the highest possible priority to prevent undesirable repercussions like late fees or a negative effect on your credit rating. Setting up an alternative payment plan with certain creditors may just be what is needed to give you some breathing room.

Once you’ve established what are the most essential expenses, participating in conversations with creditors and getting certain payment plan extensions will relieve your financial stress and anxiety. Clear communication with creditors is essential to finding remedies that benefit both of you. Being transparent about your financial constraints and actively looking for resolutions are very important actions to take. By prioritizing bills and masterfully discussing payment plans, individuals can reclaim control over their finances and stay away from more dangerous financial pitfalls.

Increase your income with a side gig to help with bill payment

It is critical to discover extra income possibilities if you come up short each month in your bill payment. Technical innovations and the surge of side gigs make it very common for people to supplement their income with a side gig. Examples of these alternate income opportunities include freelancing, online tutoring, and running an e-commerce site.

When considering different additional income opportunities, it is very important to examine one’s skills and interests to recognize suitable opportunities. Expanding income streams not only supplies security but also fosters personal development. By welcoming different revenue sources, people can take control of their financial future and chart a much more interesting career path.

Increase your financial literacy through local community resources

When dealing with difficulties with paying your bills, don’t overlook what may be available in your local community resources. There may be free or very low-cost help for you. Community centres regularly run programs or workshops on monetary management, budgeting, and financial literacy. Joining these programs can outfit people with the necessary skills to handle their bills efficiently and regain their financial confidence.

Moreover, social services may give financial help to those in need. By utilizing these resources, Canadians can get the essential support to overcome their bill payment obstacles to get into a better financial state. It is essential to make use of these local resources to develop a solid foundation for financial well-being.

Use technology to get the best cost savings

In today’s digital world, the application of modern technology like apps to save money has ended up being important for people. Price comparison tools and budgeting apps are valuable resources that make it easier than ever to monitor expenditures and make educated choices. These devices not only help recognize the very best offers, but they also supply information on your spending behaviours, letting you save substantial amounts of money and streamline your purchasing and spending patterns.

By staying updated with the huge array of available apps and modern technologies, people can remain competitive with up-to-date information on prices and spending patterns. Incorporating these devices into day-to-day routines and financial monitoring practices people can maximize cost savings and optimize financial outcomes in today’s vibrant marketplace.bill payment

Bill payment: Additional resources and support for Canadians facing bill payment challenges

For those whose financial situation is direr and they need more than just implementing the above tips, I have written many of Brandon’s Blogs incorporating the topics such as:

  • Common traps to avoid such as payday loans, credit card debt, impulse spending and lack of financial education or financial literacy.
  • Debt consolidation
  • Debt settlement
  • Credit counselling
  • Consumer proposal
  • Bankruptcy

I won’t repeat them here but you do not have to go any further than last week’s Brandon’s Blog: “DEBT RELIEF OPTIONS: OUR COMPREHENSIVE GUIDE FOR IDENTIFYING RELIABLE DEBT ADVICE” to read all about it.

Overcoming bill payment challenges requires effective strategies and practical tips. It is crucial to manage bills efficiently to regain financial stability. By prioritizing expenses, creating a budget, and exploring payment assistance programs, Canadians can overcome their bill payment difficulties. It is also important to communicate with creditors and explore alternative payment options. Seeking professional advice and support from financial advisors or credit counselling agencies can provide valuable guidance during this process. With determination and proper financial management, Canadians can overcome their bill payment challenges and work towards a more stable financial future.

Encouragement and support for Canadians facing bill payment difficulties

When people encounter difficulties with bill payments, it is important to employ reliable methods and functional tips to deal with those circumstances. Proper management of expenses plays a crucial function in bringing back financial security. Canadians can manage their bills successfully by prioritizing expenses, developing a budget, and exploring other assistance programs available to them.

Furthermore, open interaction with creditors, as well as the exploration of different repayment alternatives, are essential steps to take. Seeking specialist advice as well as support from financial and debt experts can provide beneficial advice throughout. With persistence as well as correct financial planning, Canadians can overcome their bill payment obstacles and work in the direction of a much more safe and more secure financial future.

Bill payment conclusion

I hope you enjoyed this bill payment Brandon’s Blog. Problems with making ends meet are a growing concern in Canada, affecting individuals of all ages and income levels.

Creating a solid financial plan can be the key to unlocking a brighter and more prosperous future. By taking control of your finances, you can prioritize your expenses, set clear financial goals, and build a strong foundation for your dreams to come true. With the right mindset and approach, financial planning can empower you to regain control, eliminate this issue as a source of stress in your life and find peace of mind.

Individuals must take proactive measures to address financial difficulties and promptly seek assistance when necessary. It is crucial to recognize that financial stress is a prevalent concern and seeking help is a demonstration of fortitude, rather than vulnerability. Should you encounter challenges in managing your finances and find yourself burdened by stress, do not delay in pursuing aid.

Revenue and cash flow shortages are critical issues facing people, entrepreneurs and their companies and businesses that are in financial distress. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind.

The Ira Smith Team understands these concerns. More significantly, we know the requirements of the business owner or the individual that has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

It is not your fault you can’t fix this problem on your own and it does not mean that you are a bad person. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team uses innovative and cutting-edge methodologies, to adeptly navigate you through the intricacies of your financial challenges, ensuring a resolution to your debt-related predicaments without resorting to the rigours of the bankruptcy process. We can get you debt relief now!

We have helped many entrepreneurs and their insolvent companies who thought that consulting with a Trustee and receiver meant their company would go bankrupt. On the contrary. We helped turn their companies around through financial restructuring.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

The Ira Smith Trustee & Receiver Inc. team understands that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.bill payment

 

 

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FEDERAL BUDGET 2023 AND PREDATORY INTEREST RATES: WHAT EVERY ENLIGHTENED CONSUMER MUST KNOW

interest rates

Interest rates: Introduction

From the 2023 Federal Budget, the Canadian federal government has garnered significant attention for its proposed measures regarding interest rates on predatory loans. This initiative has been lauded by activists as a commendable effort towards safeguarding consumer interests, promoting financial inclusivity, and antipoverty measures.

The budget aims to oversee the financial sector and extend protection to vulnerable Canadian consumers who may face challenges in accessing conventional bank loans. The budget is focused on facilitating economic policies that foster financial empowerment, encourage community development, and support grassroots initiatives.

In the wake of the ongoing COVID-19 pandemic, the Liberal government has made a noteworthy declaration regarding lowering criminal interest rates. Presently, the rates stand at an exorbitant maximum interest rate of 60%, leading to severe hardships for many individuals in repaying their loans. Therefore, the government has proposed a reduction of the maximum interest rate to an approximate annual interest rate, or as is formally described as the annual percentage rate (APR) of 35%, down from its existing equivalent of 47% APR. This move is anticipated to provide crucial respite to Canadians grappling with the financial repercussions of the pandemic and is reflective of the government’s proactive stance toward ensuring the welfare of its citizens.

In this Brandon’s Blog, I discuss this pivotal development in the Canadian financial landscape. As the government continues to prioritize the welfare of its citizens, this budget holds the potential to usher in positive changes in our society concerning predatory loans. I examine key terminologies such as federal budget, interest rates, and consumer protection alongside other pertinent phrases like anti-poverty measures, advocacy, and grassroots movements.

Hopefully, this Brandon’s Blog will also provide you with some insight into financial regulation, economic policy, and social justice and lead to a discussion of the impact of this budget on Canadians and their overall financial well-being.

Interest rates: Background information on predatory loans

Predatory lending is a financial practice that exploits vulnerable individuals, often resulting in excessive interest rates, undisclosed charges, and onerous repayment terms. These loans can be particularly damaging to borrowers as predatory loans make it next to impossible for vulnerable consumers to meet their obligations, leading to a cycle of debt.

Exorbitant interest rates that surpass the threshold of 60% annually have been classified as criminal interest rates under the Canadian Criminal Code. The culprits of this offence often include payday lenders, loan sharks, and other predatory lenders who exploit financially vulnerable Canadians. Typically, these lenders prey on those who belong to low-income households, those with a very poor credit score, new immigrants, and seniors who possess insufficient knowledge of the country’s financial system.

However, the Canadian Federal Government is proactively addressing this issue in its 2023 budget. The budget includes provisions to cap the interest rates charged by predatory lenders and support programs offering debt relief and financial empowerment.

This initiative demonstrates a commitment to promoting social justice and anti-poverty measures through economic policy. The efforts of activists and advocacy groups have been instrumental in advancing these measures.interest rates

Explanation of the Federal Government’s decision to cut interest rates on predatory loans

The Federal Government has decided to reduce interest rates on predatory loans, which typically offer short-term lending options at exorbitant rates of interest. These loans are often marketed to individuals who are facing financial instability, leading to a cycle of debt that can be challenging to break.

The Criminal Code limits the legal interest rate to a 60% annual rate. Any annual percentage rate above that is a criminal rate of interest. That criminal rate level has been in place since 1980 when the Bank of Canada’s overnight rate was 21%! Currently, some provinces permit the exemption for payday lenders resulting in exorbitant interest rates for payday loan options of up to $1,500 for a period of 62 days or less.

For the purpose of context, it deserves noting that the ceiling for the criminal interest rate has actually regularly exceeded the rates of interest levied by banks on their typical financing and mortgage products. Additionally, the maximum rate has gone beyond even the highest interest-bearing financing product supplied by financial institutions, credit cards, which commonly bring reasonably steep interest rates of approximately 19 to 20 percent.

The Government is proposing to lower the criminal interest rate to 35%, which is the rate established in Quebec. Provincial consumer protection laws mandate that any interest rate above this level would be deemed unlawful.

Interest rates: Common characteristics of predatory loans

Predatory financial products have long been identified by their high-interest rates, obscured junk fees, and unconscionable repayment terms, leading to a cycle of debt from which borrowers struggle to extricate themselves. As such, the budget’s emphasis on consumer protection, financial regulation, and social justice reflects a governmental commitment to the advancement of financial inclusion, debt relief, and anti-poverty measures.

These lending instruments often associated with payday lenders are designed to target low-income Canadians who are either vulnerable or have limited access to traditional financing channels. With exorbitant rates and fees, such loans often ensnare borrowers in a debt trap that is difficult to escape. The proliferation of predatory loans has inflicted serious damage on borrowers, and so it is imperative to thwart such practices through the implementation of effective regulatory measures.interest rates

The Federal Government’s decision to cut interest rates on predatory loans

The Canadian Federal Government’s implementation of reduced interest rates on predatory loans, as unveiled in the Federal Budget document, has garnered acclaim from social justice activists and financial empowerment proponents. This progressive step towards limiting interest rates on predatory loans has been a long-sought-after triumph for advocates who have tirelessly campaigned for this alteration over the years. The government’s decision to restrict interest rates on such loans to 35% will serve to shield borrowers from the detrimental cycle of debt arising from predatory lending practices, a particularly pressing concern given the surge in such practices during the COVID-19 pandemic, which has rendered countless individuals financially distressed.

Predatory lending practices have the potential to cause irrevocable harm to borrowers, with those already grappling to make ends meet being especially vulnerable. By imposing inflated interest rates and fees, predatory lenders are able to ensnare borrowers in an endless cycle of debt, thereby exacerbating the financial difficulties they face. Such actions not only impact the individuals involved but have wider-reaching implications.

Interest rates: Criticism of the government plan

Despite receiving praise from consumer and social justice advocates, the choice to reduce the interest rate on predatory loans in the 2023 Federal Budget has met some opposition. Critics have expressed the problem that this step can cause a greater rate of bankruptcies. They say that if this class of lenders is no longer willing to offer loans to these risky customers, they will leave the marketplace as a result of interest rates being capped. In that event, credit accessibility will no longer be available to those vulnerable people in Canada.

In addition, some critics state that the government should focus on establishing programs fostering financial inclusion, debt relief, and financial empowerment rather than enforcing rate of interest caps. They believe that caps on interest rates may not appropriately address the origin of poverty as well as exclusion.

Nonetheless, advocates of this regulatory measure see it as a necessary step towards shielding vulnerable Canadians, especially lower-income Canadians.interest rates

Benefits of cutting interest rates on predatory loans

The federal government’s budget proposal to lower the criminal rate of interest is expected to have a substantial influence on Canadians that are battling to repay their loans. Reduced interest rates will make it less complicated for Canadians to do so while hopefully being able to avoid falling further into debt. It is intended to decrease the financial strain on low-income households, seniors, and new immigrants that are especially vulnerable to aggressive financing methods.

Furthermore, the federal government’s budget proposal to introduce new steps to shield Canadians from predatory lending practices is a welcome development. Lenders will be subject to stricter oversight, which will hopefully help prevent them from capitalizing on susceptible Canadians. Stricter fines for lending institutions that breach the law will also act as a deterrent and help make certain that Canadians are dealt with in fairness and respect.

This particular federal budget 2023 proposal has garnered praise from consumer advocates due to its emphasis on consumer protection, financial inclusion, and social justice. Particularly noteworthy is the government’s decision to limit the interest rates that predatory lending institutions can charge. This will particularly impact payday loan products. This measure is deemed critical in protecting vulnerable Canadians.

Interest rates: Criticisms of the decision

Notwithstanding the praise this proposal has thus far received, the decision to lower the criminal rate of interest on predatory lending has actually not been without its detractors. Doubters have actually expressed that such a measure may result in some problems. Critics of this proposal say that there may be an increase in defaults on debt, as predatory loan providers may choose to decline certain loan applications from high-risk customers, thereby cutting off their access to credit. Without such access, they will be unable to repay other debt that is about to go into default.

Critics of this plan have suggested that the government should prioritize other legislative measures and initiatives that actually promote monetary inclusion, debt relief, and financial empowerment instead of focusing on caps on interest rates. They say that lowering the criminal interest rate does nothing to deal with the underlying sources of problems experienced by such bad credit and lower-incomed Canadians.interest rates

Benefits of cutting interest rates on predatory loans

Predator loans are normally considered underhanded and damaging to borrowers, as they generally involve high-interest rates, hidden costs, and other terms that make it difficult for borrowers to repay the loans.

Reducing interest rates on loans can also make it less complicated for people to re-finance their existing loans, which can lower their monthly payments and free up more cash for various other expenses. This can be specifically advantageous for people that are struggling to make ends meet, as it can supply some much-needed financial relief.

The major advantages seem to be:

  • reduced financial burden on borrowers
  • potential reduction in default rates
  • increased economic stability

In general, we will certainly have to wait and see if there is a benefit to Canadians that have no choice but to obtain predatory loans. Will they benefit from this proposal or simply be pressed to the darker corners to get their loans wheretheir financial and personal health will be in danger?

Interest rates: Conclusion

We will have to see if this reduction in the criminal rate of interest ever becomes law and if it fact will help those financially vulnerable Canadians who must seek out predatory loans, such as payday loans.

I hope you enjoyed the interest rates on Brandon’s Blog. Revenue and cash flow shortages are critical issues facing people, entrepreneurs and their companies and businesses. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind. Coming out of the pandemic, we are also now worried about the economic effects of inflation and a potential recession.

The Ira Smith Team understands these concerns. More significantly, we know the requirements of the business owner or the individual that has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

It is not your fault you can’t fix this problem on your own. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy. We can get you debt relief now.

We have helped many entrepreneurs and their insolvent companies who thought that consulting with a trustee and receiver meant their company would go bankrupt. On the contrary. We helped turn their companies around through financial restructuring.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

The Ira Smith Trustee & Receiver Inc. team understands that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.interest rates

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CONSUMER DEBT PROPOSALS: UNLEASH THE MANY PROFOUND BENEFITS OF ELIMINATING DEBT

consumer debt proposals
consumer debt proposals

consumer debt proposals

Consumer debt proposals eliminate your debt stress

Are you stressed out and overwhelmed by debt and don’t know how to begin to eliminate it? We know your pain and can help you because this Brandon’s Blog “Consumer Debt Proposals: The Ultimate Solution for Managing Debt” has got you covered! I provide realistic advice on how to manage and even get rid of debt through a binding debt settlement agreement.

I describe what consumer debt proposals are all about and also look at other debt-relief options like debt consolidation and credit counselling. I will also talk about the recent Canadian government’s warning about taking on high-interest debt from certain companies.

Consumer debt proposals: How Does a Consumer Proposal Work?

If you’re in a tough spot financially, in Canada you can submit a consumer proposal if you owe $250,000 or less (not including any debt registered against your home is one of the types of secured debts that must be paid according to your secured loan repayment terms). It’s an official way to get some debt relief, and it’s all legit according to the Bankruptcy and Insolvency Act. Basically, you work with a Licensed Insolvency Trustee who helps you come up with a plan for paying off what you owe. Then you negotiate with your creditors and hopefully, they accept the proposal.

Making a consumer proposal that unsecured creditors will accept is one of the debt solution alternatives to bankruptcy that requires a few steps to get it done:

  • Reach out to a qualified Licensed Insolvency Trustee and book a no-cost debt assessment consultation.
  • During the appointment, answer any questions the Trustee may have truthfully and to the best of your ability.
  • The Trustee will work with you to come up with a payment plan that fits into your budget and allows you to pay off your debt.

Once you’ve submitted your consumer proposal, your creditors will look it over and then decide if they want to accept it as is or negotiate an adjustment (higher) to your periodic payments to eliminate the amount you owe. They have the option to do either one.

Your creditors can decide to:

  1. Agree to the terms you have proposed (cast their vote in favour).
  2. Decline the terms (vote no).
  3. Decline the terms and suggest a meeting with creditors.
  4. Take no action (which is the same as voting yes).

Your consumer proposal is automatically approved unless more than 25% of the dollar value of the claims of your creditors indicates that they would like to have a meeting of creditors. In that case, that is what will happen.

Once you’ve taken the step of filing for a consumer proposal, you’ll be able to rest easy knowing that you have immediate legal protection from creditors and debt collectors through this financial and legal process. This is called a stay of proceedings where your creditors cannot chase you for the money you owe.

Filing under the bankruptcy process in Canada isn’t your only option! You can work out a legally binding agreement with your creditors through the popular alternative and powerful alternative of consumer debt proposals. With a consumer proposal, you and your creditors can come to an agreement on what portion of the debt you can pay off- and the rest will be written off!

consumer debt proposals
consumer debt proposals

Consumer debt proposals: The voting process

When it comes to a consumer proposal, it’s important to understand the process of how creditors come to a decision to accept or reject the plan. This section will provide insight into how the voting process works.

Once a consumer proposal is submitted, creditors are allowed 45 days to express their decision. They can either accept the proposal or reject it in one of the following ways: replying to the Licensed Insolvency Trustee with their acceptance, not responding at all (which is seen as approval), communicating their rejection or requesting a meeting of creditors.

At the creditors’ meeting, creditors will have the opportunity to decide whether to accept the consumer proposal as is or to make adjustments to it.

Consumer debt proposals: What happens if your offer is approved?

If your proposal gets the green light, you’ll need to abide by what you promised – whether that’s a single payment or regular installments to the Licensed Insolvency Trustee. Plus, you must meet any other conditions that were laid out in the proposal.

In a successful proposal, you can keep your assets (as long as you keep paying what you owe to creditors who have a lien on your assets), and go to the two financial counselling sessions held by the Licensed Bankruptcy Trustee. Of course, you’ve got to pay the Licensed Bankruptcy Trustee on time over the entire period of time your proposal is for.

Failure to do so could result in the revocation of the proposal, the accrual of interest and fees, and even legal action. It’s important to remember that while a consumer proposal can provide much-needed relief, it’s ultimately up to you to stay current with the payments you promised to make.

consumer debt proposals
consumer debt proposals

Consumer debt proposals: What happens should your consumer proposal be declined?

If 50% or more of the creditors vote to reject the consumer proposal, then the Licensed Insolvency Trustee must issue a notice and the consumer proposal dies. In this situation, creditors are free again to pursue collection actions against the debtor.

If 25% or more of the creditors request a meeting, that meeting is referred to as the Meeting of Creditors. At this meeting, an agreement will try to be reached by a majority of the creditors. If the agreement can not be reached, the debtor may need to amend the proposal and resubmit it or look for other ways to solve their financial issues.

If a consumer proposal is declined, it means that the creditors do not agree with the terms of the proposal put forth by the debtor. The main reasons for rejection may be that the debtor is not offering enough money or has proposed an unsuitable repayment schedule.

It is important to note that if you fail to fulfill the requirements of your consumer proposal, it will be deemed null and void. However, it does not free you from your existing debt, and the failure to adequately repay your loans or pay off debts within the terms of the agreement could affect your credit score. Collectors for debts are within their right to renew collection calls and seek legal action for retrieving the debts that they owe. They can sue you and if they get a judgment, they can then get a wage garnishment against you. It is never recommended to default on a consumer proposal.

Consumer debt proposals: If you fulfill the requirements of your consumer proposal

If you fulfill the requirements of your consumer proposal, you will have successfully completed the agreement between yourself and your creditors. This means that you will have made the agreed-upon payments and met all other terms of the proposal. The balance of your unsecured debts that you did not pay off is also eliminated if you fulfill the requirements of your consumer proposal.

One of the benefits of fulfilling a consumer proposal is that you will have lower regular payments monthly, which are based on what you can afford, rather than high monthly payments regardless of your income. Additionally, you will have protection from creditors, as they will not be able to contact you or take money directly from your wages.

After fulfilling a consumer proposal, it will come off your credit report maintained by the Canadian credit bureaus three years after the completion. This report will show that the consumer proposal has been successfully completed and you can rebuild your credit rating and credit score simultaneously.

You will also receive from the Licensed Insolvency Trustee (LIT) acting as the Administrator in your consumer proposal a “Notice of Successful Completion of Consumer Proposal”. This is a very important document, as you will be able to provide it to current or future credit grantors to prove that you successfully completed your consumer proposal and avoided personal bankruptcy.

It is important to note that if you fail to fulfill the requirements of your consumer proposal, it will be deemed null and void. However, it does not free you from your existing debt, and the failure to adequately repay your personal loans, lines of credit or pay off debts within the terms of the agreement could negatively affect your credit score. Creditors are within their right to use collection activity and use legal action for retrieving the debts that you owe. It is never recommended to default on a consumer proposal.

consumer debt proposals
consumer debt proposals

Advice for Consumers: Considerations for Debt Relief and Credit Repair Services

Improving your credit score or credit rating will take time, and requires showing creditors that your habits have improved and that you are paying back your debt on time. Be cautious when seeking help to pay off debt or repair your credit, as some companies may offer misleading solutions. I have been warning about the dangers of such “for-profit” debt settlement companies for years now.

One option for getting help with debt is a debt management plan, which is an informal proposal made by a non-profit community credit counselling agency credit counsellor to your creditors on your behalf. This plan consolidates your debts into one affordable monthly payment and in some cases, you may not have to continue to pay interest on your debt.

However, consumers should be aware that the “for-profit” debt settlement companies may charge high fees, including upfront or advance fees, and may not be able to get creditors to reduce your debt. Additionally, it is important to note that even while using a debt management plan, you are still required to keep making payments on any other debts you owe, which may result in no change to your credit score.

Overall, it is important to be cautious when seeking help to pay off debt or repair your credit and to thoroughly research any company or solution before proceeding. It is also important to consider the potential consequences, fees and overall effectiveness of the solution. A LIT during an initial no-cost consultation will provide many of the services that a “for-profit” debt management company charges for.

Consumer debt proposals: Organizations or firms cannot guarantee the resolution of your financial obligations

Be aware of companies or agencies that claim they can quickly resolve your debt problems by negotiating a deal with the companies you owe money to and letting you only pay back a fraction of your debt. These promises may not be reliable, so it’s best to be wary.

It’s important to remember that if certain creditors don’t agree to your payment plan, you may need to work out a different agreement with them directly. Alternatively, you can consult a LIT about doing a consumer proposal.

It’s also worth keeping in mind that anyone can call themselves a debt consultant, but that doesn’t mean they have the proper training or they’ll be able to help you with your finances.

consumer debt proposals
consumer debt proposals

Consumer debt proposals: No company or agency can give you a fast and easy boost to your credit rating

No Canadian debt consultant, company, or agency can promise a fast solution to your credit score. Improving your credit rating takes time and commitment; you have to show a history of paying your debts punctually.

If you’re looking to boost your credit score, one option to consider is a non-profit credit counselling agency. A credit counsellor can offer a variety of services like one-on-one advice, group sessions, and tips on how to better manage your debt. Just keep in mind that simply talking to a credit counsellor won’t do the trick.

If you’re looking to give your credit score a boost, try paying off some of what you owe. Bringing down your debt-to-credit ratio to under 75% of your credit limit will help. You could also ask your credit card companies or financial institution lenders to raise your credit limit and perhaps even amend your terms of repayment (though the latter will be very difficult) – that’ll help increase your credit score. Ideally, try to use less than a third of your available credit and keep it low, ideally below 30%.

Remember, there’s no shortcut when it comes to improving your credit score. Anyone promising you the fast and easy way is not looking out for your best interests. It takes determination and effort to get your credit back on track. Do your research and make sure you understand any associated fees or consequences before you commit.

Consumer debt proposals: Paying off a consumer proposal early

Sure, you can settle your consumer proposal early, but that might not be the best choice for everyone.

If you’ve got the funds, paying off your consumer proposal earlier could help kickstart your credit repair – but don’t expect it to save you money or guarantee a good credit rating. So think carefully before you commit to paying it off early. In the following section, I describe a very troublesome issue which has now attracted the attention of the Office of the Superintendent of Bankruptcy Canada (OSB).

Paying off your consumer proposal early will do wonders for your mental health – and it’s perfectly acceptable! It’s no secret that financial hardship is incredibly stressful, and five years seems like a lifetime. So treating yourself to an early payoff will help you feel a huge weight being lifted off your shoulders.

If you want to shorten how long your consumer proposal lasts, you can change how often you make your proposal payments. Usually, they’re monthly, but if you switch to making extra payments by paying bi-weekly, you can pay off your proposal faster. Once you’re done paying off your consumer proposal, the unsecured debts you’ve been worrying about will be marked as taken care of on your credit report.

consumer debt proposals
consumer debt proposals

Consumer debt proposals: LITs cannot talk you into getting a loan with a high-interest rate to pay off your consumer proposal early

On January 11, 2023, the OSB issued its position paper titled “LITs Promoting and Facilitating Loans to Debtors“. The problem is that some lenders are offering high-interest loans to people who are about to or are going through a consumer proposal. It looks like they’re giving loans to help people pay off their consumer proposals early, but it’s really just taking advantage of people’s tough financial situations.

The OSB has noticed that some LITs are promoting and encouraging people to take out loans without mentioning the potential drawbacks. They do this by talking up the positives and downplaying the negatives, and they may even pressure people into taking out a loan.

The OSB has come to the conclusion that it’s not in line with the Code of Ethics for Trustees or a LIT’s duties under the Bankruptcy and Insolvency Act and General Rules for LITs to promote or facilitate such loans. Furthermore, such actions are not allowed.

There is also evidence that LITs who receive engagements directly from “for-profit” debt consultants, may be entering into inappropriate arrangements with them. No trustees should ever accept a commission, payment, or any other type of reward from a third party for recommending work concerning a professional engagement, nor should they give out any commission, compensation, or another type of benefit to a third party for obtaining a professional engagement.

For the record, my Firm does not have any arrangements with any party regarding the referral of files and we neither accept nor pay a referral fee

Paying off your consumer proposal early isn’t really an issue. In fact, it can be great if you can afford it thanks to a financial windfall or change in circumstances. Everybody benefits in that scenario. But if you don’t have the means to pay off your consumer proposal quickly, don’t worry. Don’t take out an interest-bearing loan to pay off a consumer proposal. The consumer proposal itself should be considered an interest-free loan.

Look, if a debtor is trying to rebuild their credit with a loan after insolvency, there’s nothing wrong with that. They’re making the choice themselves, so it’s all good. In this case, LITs should explain the pros and cons of these loan products to the debtor. And, it’s important that they don’t push any company or product in particular.

The OSB believes that LITs should not be promoting or facilitating loans since it contravenes the Bankruptcy and Insolvency Act and its Rules. This practice has a negative impact on the LIT profession and the insolvency system. The OSB will be keeping an eye on this issue and taking appropriate action.

You Have Outstanding Financial Obligations — Consumer Debt Proposals

I hope you enjoyed our consumer debt proposals Brandon’s Blog.

There are many financial blogs. Ours focuses mainly on issues of importance to those individuals and businesses with financial challenges or worse, financial hardship, caused by debt problems. Income and cash flow shortages are critical issues facing Canadians, be they employees, entrepreneurs or companies and businesses with debt problems. Are you now worried about just how you or your business are going to survive? Those concerns are obviously on your mind. Coming out of the pandemic, we are now worried about its economic effects of inflation and a potential recession.

The Ira Smith Team understands these concerns. More significantly, we know the requirements of the business owner or the individual that has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

It is not your fault you can’t fix this problem on your own. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy. We can get you debt relief now.

We have helped many entrepreneurs and their insolvent companies who thought that consulting with a trustee and receiver meant their company would go bankrupt. On the contrary. We helped turn their companies around through financial restructuring.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

We understand that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.

consumer debt proposals
consumer debt proposals

 

 

 

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Brandon Blog Post

TORONTO PAYDAY LOANS: UNLOCKING FINANCIAL FREEDOM OR PAINFUL FINANCIAL SLAVERY?

Toronto payday loans
Toronto payday loans

Toronto payday loans popularity

The city of Toronto is Ontario’s largest city and is home to a growing number of individuals and families who are financially strapped and in need of quick financial assistance. Payday loans, which are short-term personal loans typically used to cover unexpected expenses, are becoming increasingly popular amongst Toronto residents due to the ease and convenience of applying for this quick loan product.

Payday loans offer borrowers immediate access to capital (either the same or within 1 business day) and these cash loans can be used to cover emergency costs, such as medical bills or car repair costs, when you don’t have the money to do so otherwise. There are many payday loan lenders in Toronto, each offering different terms and conditions regarding loan amounts, repayment terms, and fees. The one thing all of these providers with their alternative payday loans have in common is that the financial solutions they offer are very pricey.

This Brandon’s Blog provides a beginner’s primer to the Toronto payday loans industry. We will analyze the associated regulations, and different loan options, and provide some practical advice.

Toronto payday loans regulations

Payday lenders are usually the first and also the last stop for those who would be unable to secure a loan through more traditional banking institutions. They are the most vulnerable so the province implemented additional regulations to further regulate this industry. The Government of Ontario has enacted regulations for payday loan services in Toronto and the rest of Ontario. It is an essential part of trying to protect consumers residing in one of Canada’s most populous provinces. These regulations are aimed at ensuring that individuals accessing this kind of short-term loan services are provided with effective consumer protection.

The city of Toronto defines Toronto payday loans lenders as any establishment providing payday loans from physical locations, or any portion thereof, operating as a payday lender as outlined in the Ontario Payday Loans Act. In 2018, the City of Toronto limited the number of permits issued to businesses that offer payday loan services, setting the cap at the number of licenses already issued by that time.

Toronto payday loans
Toronto payday loans

Ontario Payday Loans Act

The Ontario Payday Loans Act, 2008, S.O. 2008, c. 9 has been established to enforce regulations on the payday loan industry in Ontario. Since its implementation, numerous amendments have been made in an effort to safeguard consumers in Ontario who utilizes payday loan services. This piece of legislation lays out the requirements for eligibility, the maximum allowable rate of interest, and various repayment plan choices.

Four key provisions of this Act are:

  1. The borrower retains the right to settle any or all of the payday loan prior to the expiration of the loan agreement. The lender is not authorized to receive or request any part of the borrowing cost from the borrower prior to the end of the payday loan contract.
  2. The cost of borrowing related to a payday loan agreement may be limited if the amount of the advance is $1,500 or less (or, if a different amount is prescribed, that amount or less) and, if the agreement has a duration of 62 days or less (or, if a different number of days is prescribed, that number).
  3. A lender is permitted to levy a charge of up to 2.5 percent per month on the unsettled principal balance in the event of delinquency, not compounded unless an alternative rate has been explicitly prescribed.
  4. A payday loan agreement should not impose any default charges upon the borrower beyond reasonable legal costs incurred by the lender in attempting to collect the required payment. A dishonoured cheque, pre-authorized debit, or other instruments of payment may incur a fee of up to $25.

The Canadian Criminal Code sets the maximum interest rate that can be charged in Canada at 60% per annum. However, payday lenders are exempt. So in spite of the federal and provincial guidelines, payday lenders in Ontario are typically authorized to collect interest of $15-$20 for every $100 borrowed. When expressed as an annual percentage rate (APR) – the same metric applied to credit cards, mortgages, auto loans, etc. – this translates to the cost of borrowing permitted being an APR ranging from 391% to more than 521%!

What other paperwork is required for making an application for Toronto payday loans?

When applying for Toronto payday loans, it is important to ensure you have all the necessary documents to submit alongside your application. These documents include:

  • government-issued photo identification, such as a driver’s license or passport;
  • a void cheque or a debit payment authorization form;
  • an active bank account statement with 30-60 days of account activity;
  • proof of where you live, such as a utility bill; and
  • a recent pay stub to prove your source of income and your regular income or monthly salary.

It is important to note that these documents are used to verify your identity and demonstrate your financial status.

Toronto payday loans
Toronto payday loans

Toronto payday loans interest rates and fees

Payday loan interest rates and fees in Toronto can vary greatly depending on the lending institution. Credit scores play an important factor in determining the applicable rate, as each lender has their own set of policies and regulations. Alongside the interest rate, fees also are charged.

When considering Toronto payday loans, it is essential to investigate and compare the various lenders available to ensure you secure the most competitive interest rate and fees. Prior to signing any loan agreement, be sure to read it thoroughly and check that all applicable fees and interest rates are correctly stated.

The Toronto payday loans application process

If you can’t make it to one of the brick-and-mortar payday loan locations for a time of day during regular business hours, don’t fret about it. Toronto payday loans have an application process that can be easily completed through one of the many online payday lenders with payday loan online applications which can be completed with minimal effort. Simply provide one of these online lenders with your personal and financial information and they will assess your eligibility. Upon passing the approval process, access to funds can be accessed by way of transferring to your account in a timely manner.

Before beginning the application process for Toronto payday loans, it is essential to thoroughly familiarize yourself with all the applicable terms and conditions. Furthermore, it is highly recommended to plan and budget for the loan repayment in order to avoid any extra fees and charges.

Toronto payday loans
Toronto payday loans

Toronto payday loans: What if I am on ODSP?

A certain group of Canadians use the convenience of quick access to short-term funds. But for those receiving Ontario Disability Support Program (ODSP) payments in Toronto, the question becomes: is it possible to apply for and receive an online payday loan?

The answer is not so simple, as many lenders have restrictions against lending to individuals receiving ODSP.

Toronto payday loans: The Canadian government survey

The Financial Consumer Agency of Canada (FCAC) performed a study on payday advance loans, producing insightful and sometimes surprising results. The survey exposed that, while cash advances are a practical method for customers to gain access to credit, they are a pricey form of loan, with a common interest rate of 546%. Moreover, fewer than 43% of respondents recognized the loan terms for this kind of financing.

The findings also indicate that a large proportion of individuals lack the financial literacy needed to make sound borrowing decisions that are beneficial to their financial situation. It has been observed that the percentage of Canadian households using these forms of debt has risen significantly in recent years, reaching 4%. Furthermore, 45% of the respondents indicated that they commonly resort to such loans to cover unexpected expenses.

Survey results showed that 41% of respondents utilized temporary payday advance loans for necessary and also predicted costs. Consider that statement. Another way of phrasing it is that 41% of the people who participated in the study said that they use payday advances to get cash for budgeted costs (although I am certain none of those individuals actually put together a budget plan). That indicates that their anticipated regular monthly expenditures are greater than the money they earn each month.

According to the survey, the majority of users of these types of loans tend to have lower to moderate incomes, with over half reporting annual incomes of under $55,000. However, it should be noted that approximately 20% of users who answered the survey stated that their household incomes were above $80,000 and 7% of respondents said they had a household income in excess of $120K.

The survey results, not surprisingly, showed that most of the users rarely looked for financial advice even when it was needed.

Toronto payday loans
Toronto payday loans

Toronto payday loans: Are there alternatives?

For those with a bad credit history, a bad credit score or for whatever reason no access to traditional banking and financial institutions, payday loans are an expensive option but are normally the only option. Toronto residents have access to several alternatives which may provide a more cost-effective solution. Some of these alternatives include credit unions, installment loans and peer-to-peer lending.

Many times when people have to resort to Toronto payday loans it really means that they are experiencing serious financial difficulties. The best option, rather than taking on payday loan debt is to seek help from either a non-profit credit counselling agency or even seek a no-cost consultation from a licensed insolvency trustee.

The unfortunate truth is that Toronto is an incredibly costly city to live in. If a single person or a family is making only $55,000 a year, they are barely scraping by. No matter how much financial knowledge and understanding one has, the reality remains the same. Therefore, it is essential that we start educating children in school so they will gain an understanding of what I believe are the 3 main foundations of financial literacy:

  • the cost of credit;
  • the need for emergency savings; and
  • seeking professional advice for both financial opportunities or financial problems.

Tips for repaying Toronto payday loans

Payday loans can be a great way to manage your finances in a pinch, but it’s important to remember to pay them back on time. Here are five tips to help you successfully repay payday loans in Toronto:

  1. Set a repayment date and mark it in your calendar. Knowing when your payday loan payment is due will help you plan and budget accordingly.
  2. Make more than the minimum payment. Paying more than the minimum will help reduce the total amount of interest you pay over the life of the loan.
  3. Pay by direct deposit whenever possible. Setting up direct deposit for your loan payments can help ensure that you never miss a payment.
  4. Call your lender if you can’t make your payment. Most lenders will be willing to work with you to reschedule your loan payment if necessary.
  5. Create a budget and stick to it. Developing a budget and sticking to it will help you avoid taking out more payday loans in the future.

Toronto payday loans: Instant approval of instant problems?

I hope you enjoyed this Toronto payday loans Brandon’s Blog.

Income and cash flow shortages are critical issues facing Canadians, be they employees, entrepreneurs or companies and businesses. Are you now worried about just how you or your business are going to survive? Those concerns are obviously on your mind. Coming out of the pandemic, we are now worried about its economic effects of inflation and a potential recession.

The Ira Smith Team understands these concerns. More significantly, we know the requirements of the business owner or the individual that has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

It is not your fault you can’t fix this problem on your own. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy. We can get you debt relief now.

We have helped many entrepreneurs and their insolvent companies who thought that consulting with a trustee and receiver meant their company would go bankrupt. On the contrary. We helped turn their companies around through financial restructuring.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

We understand that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.

Toronto payday loans
Toronto payday loans
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Brandon Blog Post

CONSUMER PROPOSAL CALCULATOR: CONSUMER PROPOSAL GREAT SECRETS REVEALED!

consumer proposal calculator
consumer proposal calculator

Consumer proposal calculator: When should you think about a consumer proposal?

Debt can be a heavy burden, and it seems like there’s no end in sight. If you’re having a hard time making ends meet and debt is taking over your life, you may be asking yourself if a consumer proposal is right for you.

If you’re finding it impossible to pay off your financial debt, a consumer proposal could be a perfect choice for you. As soon as approved by your creditors and also authorized by the court, a consumer proposal is an enforceable deal between you and your creditors. You only need to pay off a part of your financial debt and in return, they write off the balance. This is an excellent method to pay off your debt as well as get your life back on course.

There are 2 main points to keep in mind when thinking of a consumer proposal. First, just an insolvency trustee (Trustee) can carry out a consumer proposal. They will first evaluate your situation and determine if this is the very best choice for you.

Secondly, you need to be able to make the promised payments to the Trustee. If you cannot, then a consumer proposal may not be right for you. There are also several non-insolvency debt relief options for people when looking at their unsecured debt and I describe them below.

Knowing how much you may need to pay in a consumer proposal in order to extinguish all of your unsecured debt is an important part of the decision-making. That is why I created this consumer proposal calculator located down below in this Brandon’s Blog.

Consumer proposal calculator: Option 1 – Pay off your debt on your own

If you have adequate savings and are in a financial situation to pay your financial obligations in a timely manner, excellent. Yet that is not every person’s circumstance. It’s not unusual for individuals to find themselves in a state where they have financial obligations coming due for payment, but, they do not have the cash. If you’re in this situation, you might be unsure about exactly how you can repay the money you owe but do not have.

There are a couple of things you ought to remember if you’re seeking to pay off the financial debt by yourself. First, you need to ensure you have a clear plan for exactly how you’re likely to pay off the money. This means establishing a budget plan and staying with it.

Second, you ought to keep communication open with the individual or company you owe the money. By doing this, they’ll understand what you’re doing to pay back the debt and can provide support if needed.

Finally, it is very important to be patient. Settling a financial debt can take time, however as long as you’re sticking to your strategy and seeing progress, you’ll ultimately get there to financial freedom.

consumer proposal calculator
consumer proposal calculator

Consumer proposal calculator: Option 2 – Debt consolidation

Combining your financial obligations, such as the total debt on all your credit cards, into one new debt consolidation loan can aid you to become debt-free faster and get your funds back on the right track. It can help you to repay your financial debts a lot faster and also right-size your finances. Before consolidating your financial debts and making debt consolidation payments, there are a couple of things you need to understand:

  1. Prior to you trying to settle your financial debts through debt consolidation, it’s important to recognize just how debt consolidation loan payments work as well as what type of impact it can have on your credit rating.
  2. See to it that you recognize what you’re getting into. Consolidating your financial debts through new loan funding to settle your existing financial obligations, ensure you recognize the terms of the new financing, including the rate of interest and how much the regular monthly payment will be.
  3. Search for the very best deal available. There are a variety of companies that provide financial debt consolidation funding. Shop around to find the best rates of interest as well as terms.
  4. Combining your debts will lead to a lower single monthly payment. Make sure it fits into your budget.
  5. Making your new loan monthly payments on time will work to improve your credit rating.

Consumer proposal calculator: Option 3 – Credit counselling

If you’re struggling with credit card debt, you’re not alone. It’s one of the most common types of debt in Canada. But there’s help available. Credit counselling can help you get your debts under control and develop a plan for you.

Credit counselling can be a very therapeutic process that assists people to address their debt obstacles as well as enhance their total financial health and wellness. Your best choice is to go for credit counselling offered by a nonprofit credit counselling agency.

Credit counselling commonly involves working with a credit counsellor to develop a spending plan, understand your economic alternatives, and produce a plan to settle your financial debts. More often than not the credit counsellor can get your creditors to agree to allow you to pay off the principal amount of your debt without adding any more interest charges.

Credit counselling can aid you to get out of debt, improve your credit score, and also teach you how to make better financial decisions in the future. If you’re seriously thinking about credit counselling as an option for you, it is very important to pick a reputable firm to deal with in order to produce a personalized plan to address your unique financial situation.

consumer proposal calculator
consumer proposal calculator

Consumer proposal calculator: Option 4 – Debt Settlement

If you’re struggling to make your financial debt settlements and are dealing with economic difficulty, financial debt settlement may be a great choice for you. This is where you work out with your creditors to resolve your debt for less than the amount of the individual debt amounts you owe.

  1. There are a couple of points to remember if you’re thinking about financial debt settlement:
    Your credit score will take a hit.
  2. Your creditors might send your debt to their lawyer to take legal action against you or they might send your debt to a collection agency to plague you with collection calls as soon as you divulge that you cannot settle them in full.

If you’re looking at this kind of financial debt negotiation, it is very important to evaluate the pros and cons and speak with a professional advisor to see if it’s the right option for you.

WARNING:

A for-profit debt settlement company charges fees, just like any other business. Before any of your money is used to settle your personal debts, you must pay their fees upfront. No fees are charged by the non-profit credit counsellor.

When you cannot pay anymore, the for-profit debt settlement company walks you over to their friendly Trustee for you to file either a consumer proposal or an assignment in bankruptcy.

Please stay away from for-profit debt settlement companies. I do not recommend for-profit debt settlement arrangements or debt settlement programs. These types of debt counsellors are not the debt-help professionals you should go to see.

Consumer proposal calculator: Option 5 – About consumer proposals

If you’re battling with a mountain of debt, do not worry, there is help and it avoids bankruptcy. A consumer proposal is a legal process that is the only federally-approved debt settlement process. A consumer proposal can only be carried out by a Trustee.

If you’re thinking about a consumer proposal, it is very important to understand just how the process works and also what it will indicate for your financial future. I have actually written several of Brandon’s Blogs giving a comprehensive on what consumer proposals are and how they work.

If you’re insolvent and owe $250,000 or less to your creditors (excluding any secured creditor debt like mortgages or lines of credit that are secured by registration against your personal residence), you can qualify for this government-sanctioned debt settlement plan.

This could be a good option for people who are employed and can budget their money to make the required monthly payments under this plan to the Trustee. It helps to avoid personal bankruptcy, and not have to deal with collection calls from agencies anymore. This is the best alternative to bankruptcy.

For more information, check out either one of the following Brandon’s Blogs:

consumer proposal calculator
consumer proposal calculator

Consumer Proposal Calculator: What will my monthly payments be in a consumer proposal?

Here is how a debt calculator calculates your total debt and estimates what your monthly payments will be in a consumer proposal debt management plan. Below you will be asked for all your unsecured debts, including any government debt or income tax debts.

Consumer proposal calculator$
What is the total of your credit card debt?
What is your income tax debt?
What is the total of any online loan?
How much is your other government debt?
Total of other unsecured debt?
What is your payday loan debt?
Total unsecured personal loan debt?
Your total unsecured debt
# of months you wish to take to pay (max 60 months)60
Monthly payment = (Your total unsecured debt
divided by # of months) X20%

Use this consumer proposal calculator method to compare what a monthly payment would be for you under a consumer proposal as compared to what your monthly debt payments are now. Keep in mind that in a consumer proposal, you are getting rid of all your debt if successfully completed. Right now, you may only be paying the interest charges and not making any dent in the principal reduction.

To figure out your exact monthly payment, give us a call.

Consumer Proposal Calculator: We can help you with a consumer proposal

I hope you enjoyed this consumer proposal calculator on Brandon’s Blog.

Income and cash flow shortages are critical issues facing Canadians, be they employees, entrepreneurs or companies and businesses. Are you now worried about just how you or your business are going to survive? Those concerns are obviously on your mind. Coming out of the pandemic, we are now worried about its economic effects of inflation and a potential recession.

The Ira Smith Team understands these concerns. More significantly, we know the requirements of the business owner or the individual that has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

It is not your fault you can’t fix this problem on your own. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy. We can get you debt relief now.

We have helped many entrepreneurs and their insolvent companies who thought that consulting with a trustee and receiver meant their company would go bankrupt. On the contrary. We helped turn their companies around through financial restructuring.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

We understand that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.

consumer proposal calculator
consumer proposal calculator
Categories
Brandon Blog Post

HOW TO FILE BANKRUPTCY ONLINE: OUR KNOCKOUT STEP-BY-STEP GUIDE

file bankruptcy online
file bankruptcy online

File bankruptcy online: You can file bankruptcy online in Canada!

Can I file bankruptcy online in Canada? This is a question we’ve been getting a lot lately. And the answer is yes, you can file bankruptcy online in Canada; just not by yourself.

The only ones the federal government authorizes in Canada to do bankruptcy filings are licensed insolvency trustees. Since March 2020, the process for meeting with a bankruptcy trustee to discuss bankruptcy has changed and can be done online. This may be helpful if you’re considering bankruptcy for your individual situation.

In this Brandon’s Blog, I explain how, with the help of a licensed insolvency trustee, you can meet all the legal requirements and file bankruptcy online for the Canadian bankruptcy process.

Why you can file bankruptcy online in Canada

There’s virtually nothing you can’t do online these days. The lockdowns increased our reliance on online shopping for things like groceries, clothes, office supplies, and even toilet paper.

The internet also includes a wealth of knowledge on any subject you can think of, including financial topics. I find that anyone contacting me who is struggling with their, or their company’s financial problems, has already looked into the various options available to them in dealing with debts like income taxes and credit cards.

Although people may not be familiar from their online research with all the ins and outs of insolvency and bankruptcy, this is to be expected. However, callers are generally well-informed about different options for dealing with secured creditors and unsecured creditors.

Nowadays, people expect to be able to do everything online – including filing for bankruptcy in Canada. Those who think bankruptcy might be a solution for them, are curious to understand if they can declare bankruptcy online. Thanks to the COVID-19 pandemic, online everything is a way of life.

file bankruptcy online
file bankruptcy online

Why you should file bankruptcy online

The Canadian government oversees the administration of the insolvency process in Canada through the Office of the Superintendent of Bankruptcy Canada (OSB). The OSB is part of Innovation, Science and Economic Development Canada (Industry Canada). They ensure that consumer proposals, corporate financial restructuring and bankruptcies are handled in accordance with federal law. This process protects the rights of both debtors and creditors and helps to ensure a fair and orderly resolution to financial difficulties.

The OSB is responsible for administering Canadian bankruptcy law under the Bankruptcy and Insolvency Act (BIA), as well as certain duties under the Companies’ Creditors Arrangement Act (CCAA). They license and regulate the insolvency profession, ensure an efficient and effective regulatory framework, and supervise stakeholders. The OSB is independent of the Government of Canada in carrying out its regulatory, administrative, and supervisory duties.

As a result of the outbreak of COVID-19, the OSB issued guidance to Trustees on how certain aspects of the Canadian bankruptcy and insolvency process have changed. This document, entitled Temporary Guidance for LITS During the COVID-19 Pandemic, provides direction on how to navigate these changes.

As concerns about COVID-19 grew in Canada, licensed insolvency trustees took action to reduce in-person meetings. The OSB supported the Trustee community in these initiatives while maintaining the stability of Canada’s insolvency system.

Many of the same temporary measures remain in place today. Most clients find it more convenient and less stressful to continue filing for bankruptcy online. So how do we file bankruptcy online in Canada?

Assessing your financial situation and considering bankruptcy alternatives

No matter what form of insolvency process we are discussing to deal with a specific debt situation calling for either financial restructuring with a debt settlement payment plan through a consumer proposal or Division I Proposal, or personal bankruptcy, the process always starts in the same way. It’s not important what type of bankruptcy or insolvency process we’re talking about if we are dealing with a limited liability company or with someone considering bankruptcy for individuals.

When it comes to corporate insolvency, it’s important to have a clear understanding of the company’s current financial position and what its chances are for a successful financial restructuring. In consumer insolvency cases, the first step is to assess the debtor’s individual situation.

When a person contacts me to discuss their personal financial situation, we would have our initial chat. If the person wished to explore their available options in more detail, I would need to collect additional information from them to enable a proper assessment. Before we discuss which actual filing may be appropriate, it is important for me to know things like their assets and liabilities, their monthly income, and their household size.

If they would like me to continue our no-cost consultation and provide them with a proper assessment, I email them our standard intake form called the Debt Relief Worksheet. I ask them to please make sure to fully complete it and include any backup documents that are requested.

The backup documents we typically request are quite standard – a copy of their most recent bank statement, their last filed tax return, and the notice of assessment. Once I have a chance to review everything and ask any follow-up questions, I’ll be able to provide tailored advice based on their unique situation.

The counseling before filing bankruptcy that we give is perhaps even more important than any counselling sessions after filing. So far, we’ve been able to do everything over the telephone and online.

file bankruptcy online
file bankruptcy online

Is filing bankruptcy online an option for getting rid of debt?

Now that I have all the necessary information, I can perform the rest of the initial assessment. There could be several options available for those struggling with debt, and filing for bankruptcy may be an option for some. However, it’s important to understand the process and what it entails before making a decision.

Continuing with the online model, I meet with the person and do the rest of the assessment by phone or video meeting. I explain what I see as the realistic debt relief options for the person, explain why and discuss what is involved with each option and answer any questions they may have.

At the end of the meeting, I provide the person with a list of resources that can help them make their decision. I’m always available to answer any questions they may have throughout the process. Filing for online bankruptcy may very well be an option for getting rid of debt, but it should be the last option.

Something else to remember is that an insolvency proceeding will lower your credit score as it appears on your credit report. Declaring bankruptcy will have a worse effect than a debt management plan through a BIA-approved financial debt restructuring program repayment plan.

What documents do you need in order to file bankruptcy online?

To discuss what documents you need for a bankruptcy application in order to file bankruptcy online in Canada, we will assume that the person chose the bankruptcy option. By now, I have enough financial information to prepare all the necessary bankruptcy documents.

Examples of statutory bankruptcy forms which are part of the bankruptcy paperwork include the:

  • statement of affairs, indicating both the person’s eligible assets and those exempt from seizure under provincial law with related bankruptcy schedules;
  • list of creditors that is used for the creditor mailing list to send out the notice to creditors;
  • person’s statement of monthly income and expenses;
  • bankruptcy assignment
  • notice to bankrupt of their bankruptcy duties; and
  • estate information summary.

We schedule a video meeting with the debtor once all the statutory and financial documents are ready for signing. We can either email the documents or upload them to our secure signing portal and provide the debtor with a private, secure link. We’re happy to use online technology to have our meeting and explain all the documents, witness their signing, and get the signed documents from them.

We take the signed documents and file them in the Industry Canada OSB electronic online filing system. The OSB issues the bankruptcy certificate once the electronic filing is accepted. The day and time of the certificate is the exact moment the person is officially bankrupt.

file bankruptcy online
file bankruptcy online

Duties during bankruptcy include credit counselling sessions

The duties of a bankrupt person are set out in section 158 of the BIA. They include:

  • to identify all of their property and allow the Trustee or anyone authorized by the Trustee to take possession of all the debtor’s property;
  • to give the Trustee all books, records, documents and papers related to their property or affairs, including, but not limited to, title papers, insurance policies, and tax records and returns;
  • providing full disclosure of all assets and liabilities;
  • helping the trustee when required with assistance from time to time;
  • if one or more creditor meetings are required, you must attend; and
  • attending the two mandatory bankruptcy credit counseling sessions run by the Trustee.

We can meet with the bankrupt person over video meetings to provide counselling sessions and help them to fulfil their online bankruptcy duties.

Is it always going to be possible to file bankruptcy online in Canada?

The OSB has extended the option to conduct online service delivery of the Canadian insolvency options available under the BIA. Licensed insolvency trustees can continue to use online methods. It has provided some peace of mind for many people.

The OSB has been consulting with the insolvency community on potential amendments to relevant directives, with the goal of implementing an online alternative to meeting in person. While allowing flexibility, the changes they are contemplating would emphasize that while trying to be flexible, the changes being contemplated would emphasize that debtors will have the choice to either meet in person or online.

It looks like the OSB is warming up to the idea that remote filing through online resources, whether we are talking about BIA-approved debt repayment plans or bankruptcy may very well be here to stay. The OSB is trying to balance the benefit to debtors as well as the bankruptcy process continuing to be for the benefit of creditors. Can it all continue to be accomplished by online resources and technology? So far the average person, be they Canadian debtors or Canadian creditors, seem to want to continue with the choice of having insolvency administration online.

file bankruptcy online
file bankruptcy online

Are you deep in debt? We can help!

I hope you enjoyed this Brandon’s Blog on how to file bankruptcy online. Are you or your company in need of financial restructuring? Are you or your company unable to survive the COVID pandemic and its aftermath? The financial restructuring process is complex. The Ira Smith Team understands how to do a complex restructuring. However, more importantly, we understand the needs of the entrepreneur or the person who has too much personal debt. You are worried because you are facing significant financial challenges.

It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief freedom.

The stress placed upon you is huge. We understand your pain points. We look at your entire situation and devise a strategy that is as unique as you and your problems; financial and emotional. We know that we can help you the way we take the load off of your shoulders and devise a debt settlement plan.

We realize that people and businesses in financial difficulty need practical advice and a workable solution in an easy-to-understand financial plan. The Ira Smith Team knows that not everyone has to file for bankruptcy in Canada. Most of our clients never do, as we are familiar with alternatives to bankruptcy. We assist many people in finding the relief they need.

Call or email us. We can tailor a new debt restructuring procedure specifically for you, based on your unique economic situation and needs. If any of this sounds familiar to you and you’re serious about finding a solution, let us know.

Call us now for a no-cost initial consultation.

file bankruptcy online
file bankruptcy online

 

 

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Brandon Blog Post

DEBT AND UNPOPULAR INTEREST RATE HIKES, HOW IS THE ECONOMY FARING?

What is the definition of debt?

Debt is the money that a person or company owes to others. That is the simplistic definition. It is really one of life’s most stressful parts. Some people grow up in debt. For them, it’s just part of their lives, and they can make it work. Others live from paycheque to paycheque and save little to nothing. For them, it is crippling and can consume their lives, making their existence a daily struggle. For others, it is a parasite, feeding on their mind and their body. It can destroy their life, pulling them down and limiting their options and choices.

Consumer debt and household debt come from a number of places. Some source of debt is from emergency situations, and some of it is from buying expensive things but useful and worth the cost. That is how people have viewed real estate over the last decade, especially during the unprecedented pandemic. However, I also see some situations where high levels are just from bad decisions.

Business loans and corporate debt come in handy for a number of reasons. Perhaps you need some extra cash to get your business up and running. Or, maybe you’re looking to expand your operations by opening a new branch or purchasing new equipment. In any case, a business loan can provide the funds you need to reach your goals. Or, like in the last 2 years, perhaps the bottom has fallen out of the economy due to the COVID-19 pandemic and in order to survive, the business has had to take on government-support loans to increase the business debt load substantially.

All of these are now coming together in a perfect storm, as the Bank of Canada attempts to battle inflation and high Canadian real estate prices by beginning a pattern of interest rate hikes.

In this Brandon’s Blog, I look at how interest rate hikes, higher Canadian household debt and more Canadian business bankruptcies are the most recent signs of the Canadian consumer debt burden, as well as the major indicator of the current state of business in Canada.debt

Policy Interest Rate – Bank of Canada

The Bank of Canada’s primary business is to conduct monetary policy for the Canadian economy. This means that the Bank uses its tools of monetary policy to try to hit its target for inflation, which it does by adjusting the Bank of Canada’s policy interest rate. The Bank of Canada’s policy interest rate is the rate at which it lends money to financial institutions.

At the beginning of March, the Bank of Canada increased its target for the overnight rate to 1%, with the Bank Rate at 1¼% and the deposit rate at 1%. This Fed interest rate hike was the biggest increase in two decades. The reason? To fight inflation.

The world’s biggest central bankers have long argued that ultra-low interest rates encourage spending and investment, helping to boost growth and employment. So at the outset of the pandemic with the world economies in tatters, all major central bankers, including the Bank of Canada, set borrowing costs at record lows. Those actions, amongst other things, contributed to the current state of inflation in the economy.

Macklem won’t rule out an inflation-driven, super-sized rate hike

The central bank predicts that inflation will remain high, averaging almost six percent in the first half of this year and remaining elevated in the second half of 2022. It is expected to ease in the second half of next year before returning to the two-per-cent target in 2024.

What are the factors causing this inflation? The global financial situation has become more difficult and unpredictable. Prices for oil, natural gas, and other commodities have risen sharply, contributing to inflation in many parts of the world. Supply disruptions resulting from Russia’s invasion of Ukraine have caused the prices of energy and other commodities to increase even further.

Looking to the future, Bank of Canada Governor Tiff Macklem stated that the Bank will be taking another 50-basis-point step which has already been baked into the financial markets. He believes that the economy needs higher rates and can handle them. It is evident that Macklem is dedicated to using Canada’s policy interest rate to bring inflation back to target. As inflation continues to surge to new highs, an even bigger interest rate hike may be on the horizon. Bank of Canada Governor Tiff Macklem indicated that further and faster rate hikes could be necessary to keep inflation in check.

The problem is that Canadian inflation is as much from a global impact as it is local. Raising interest rates may slow down home buying and mortgage growth. While it is true that mortgage debt is Canadians’ single largest obligation, increasing interest rates won’t fix the sky-high pricing at the gas pumps and the supermarkets.debt

As interest rates increase, so is household debt!

The latest figures from Statistics Canada, the agency responsible for collecting and disseminating statistics related to the economy of Canada, indicated that the total amount of household debt in the country increased by 0.5% in March 2022, up $14.4 billion to $2.69 trillion.

The increase of $13.2 billion came largely from debt related to the real estate market, such as mortgage borrowing and home equity lines of credit (HELOCs). This amount totalled $2.16 trillion outstanding. However, Statistics Canada also reported that credit card debt has increased for the second consecutive month, growing at a faster rate than mortgage debt!

Now as the Bank of Canada embarks on a hiking cycle that could go faster and further than before, and sky-high inflation squeezes household budgets, economists and capital markets are once again raising the red flag.

In a recent poll, 31% of Canadians polled say they already don’t make enough to cover their bills and required payments. Economists look at the rise in credit card debt and attribute it to a rise in personal spending. This is true. However, with prices rising much faster than wages, the increase could be a troubling sign that Canadians are spending on basics by using credit to replace the money they do not have and will not have to repay the new rising liabilities.

The rising cost of debt payments is already putting a strain on Canadians

If you’re borrowing money, interest is what you pay to your lender for using their money. It is your debt cost. If interest rates go up, the amount you have to pay each month for a mortgage, line of credit, or other loans with variable interest rates will increase. The minimum payment required each month on variable rate loan products will increase as interest rate hikes continue. At some point, you’ll also need to renew a fixed interest rate mortgage or loan. When interest rates are rising, the renewal rate on the fixed debt cost will be higher.

Raising borrowing costs to quell rising consumer prices may pose some risks, especially since Canada has a high level of household debt. In terms of household debt to income, Canada ranks 4th highest in the world.debt

What are the most effective ways to reduce your debt?

Paying down debt as much as possible will help counter the effects of a rise in interest rates and provide you with much-needed debt relief. Here are some of the best ways to reduce your debt burden thereby improving your credit score and credit rating:

  • Cut up your credit cards and only use cash for an extended period of time until things are back in control.
  • Make a budget and stick to it.
  • You should have an emergency fund to pay for unexpected expenses arising from external events out of your control.
  • Create a payoff plan. Look at your various categories of debt and make a plan that is most realistic for each type of debt.
  • Save money on interest by paying down the outstanding amount with the highest interest rate first.
  • Debt consolidation. Consolidate your liabilities with the highest interest rates into a single loan with a lower interest rate. By keeping your payments the same, and paying more than the monthly minimum payment, you’ll be able to pay it off faster and save money in the long run.
  • Avoid getting the biggest mortgage or line of credit that you’re offered.
  • Get a part-time job or begin a side hustle to boost your income.
  • Think first about how borrowing more money could impede your ability to save for future objectives.
  • Speak to a financial advisor or one from a wide variety of other financial professionals to find out how to teach you how to create a plan to be debt-free.

What will happen now with external debt and business bankruptcies?

As businesses continue to experience insolvencies, it’s important to note that the Canadian business bankruptcy rate is on the rise, according to a recent report by Statistics Canada and the Office of the Superintendent of Bankruptcy Canada. This increase underscores the importance of taking measures to protect your business from financial hardship.

Business bankruptcies in Canada increased by almost 34 percent year-over-year in the first quarter of 2022, which some experts warn could be the start of a growing wave of failures. This is closer to pre-pandemic levels. The number of business bankruptcies and proposals increased in the first quarter of 2022, with 807 cases compared to 733 in the previous quarter and 603 in the first quarter of 2021.

Business bankruptcies in Canada are increasing as government support comes to an end and businesses face a difficult post-pandemic recovery with high costs, supply chain problems and a shortage of workers. The financial support provided by the government through the COVID-19 pandemic assisted in delaying the surge in bankruptcies. Funding sources are becoming more expensive also.

Small business owners are feeling increased pressure from inflation in comparison to the average Canadian. With each budget line costing more, filing for bankruptcy is often the only option left. The data doesn’t capture the number of insolvent businesses that are forced to close without any formal filing, but the trend is now becoming evident.

Do you think that debt levels and bankruptcy filings will surpass pre-pandemic levels?

The state of the economy and how inflation and supply chain issues are managed will determine if the number of bankruptcy filings will rise in the coming months or not. As you can see, inflation, supply chain issues, interest rate hikes, household debt problems, business owners searching for more solutions and business bankruptcy filings are all now coming together in a perfect storm.

I hope this Brandon’s Blog on the current state of Canadian interest rates, household debt and business bankruptcies was helpful to you in understanding more about the corporate bankruptcy system in Canada.

If you or your company has too heavy a debt load, we understand how you feel. You’re stressed out and anxious because you can’t fix your or your company’s financial situation on your own. But don’t worry. As a government-licensed insolvency professional firm, we can help you get your personal or corporate finances back on track.

If you’re struggling with money problems, call the Ira Smith Team today. We’ll work with you to develop a personalized plan to get you back on track and stress-free, all while avoiding the bankruptcy process if at all possible.

Call us today and get back on the path to a healthy stress-free life.debt

 

 

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Brandon Blog Post

CONSUMER PROPOSAL TORONTO: THE COMPLETE #1 WAY TO ELIMINATE DEBT IN ONTARIO

Consumer proposal Toronto: What is a consumer proposal in Ontario?

If you’re drowning in debt and find you are falling further behind every month, there may be options available to help you regain total control over all aspects of your life and eliminate your stress. If you’re struggling with debt, a consumer proposal may be a good option for you. This guide will explain what they are, and the benefits, and answer some frequently asked questions. If you’re struggling with debt and live in the GTA, a consumer proposal Toronto may be a good option for you. This guide will explain what they are, and the benefits, and answer some frequently asked questions.

This debt settlement plan is a legal process administered under the Bankruptcy and Insolvency Act (Canada) (BIA). It allows you to pay back part of your debt over a period of time. The benefit to you of a consumer proposal Toronto is that once you finish paying back the portion that you agreed to, you will be totally debt-free.

Consumer proposal Toronto: Who can file a consumer proposal?

To qualify for this government-sanctioned debt settlement plan, you must be insolvent and owe $250,000 or less to all your creditors (excluding any secured creditor financial debts secured by registration against your personal residence such as mortgages or lines of credit).

This is a good option for people who:

  • are employed
  • can budget their money to make the required monthly payments
  • want to avoid bankruptcy
  • can’t stand all the collection calls from the collection agencies anymore

    consumer proposal toronto
    consumer proposal toronto

Consumer proposal Toronto: How to make a consumer proposal in Toronto

Under the BIA, a licensed insolvency trustee (formerly called a bankruptcy trustee) will administer the consumer proposal. In fact, the licensed insolvency trustee is called the consumer proposal administrator.

The licensed insolvency trustee will submit the required documents to the Office of the Superintendent of Bankruptcy (OSB). Your payment to unsecured creditors will stop as of the date of your filing. You will also have stopped paying any secured creditors if you have decided to do so because you could not afford to keep the secured assets and you, therefore, handed them over to the lenders.

When you file a consumer proposal Toronto, any legal action your unsecured creditors have started against you in the Greater Toronto Area will be stopped. If a creditor already has a judgment against you are issuing wage garnishees, that will also stop. This will give you some relief and the time to work out the debt settlement plan.

The licensed insolvency trustee will present your creditors with your proposal, a list of your assets and liabilities, as well as the reasons for your financial difficulties.

The creditors will have 45 days to decide whether to accept or reject the proposal. They can do this either before or at the meeting of creditors if one is held.

Consumer proposal Toronto: Why would my creditors be willing to agree?

To have a consumer proposal Toronto approved, a majority of your creditors by the dollar value of their unsecured debts, who have filed a proof of claim for their unsecured debts, need to authorize it. If creditors who have filed a proof of claim choose not to vote, that is considered a vote in favour.

Creditors who hold 25% or more of the total dollar amount of submitted claims may request a meeting, or the OSB may request one. If no meeting is requested, the proposal is considered accepted by the creditors.

There is not a whole lot to understand. As I mentioned, a simple majority by dollar value tells the tale. There is either a majority to accept or refuse your consumer proposal. Why would your unsecured creditors agree to your consumer proposal? Simple. The licensed insolvency trustee acting as the administrator in your consumer proposal has clearly shown them that it is a better deal than they will get in your bankruptcy.

If your proposal is accepted, then for the next 15 days, either the OSB or a creditor can ask to be put on the Court docket to seek Court approval. If no such demand is made, the proposal will be considered to have been approved by the Court.

consumer proposal toronto
consumer proposal toronto

If your consumer proposal Toronto is accepted

An accepted proposal is a legally binding agreement between you and your creditors. You have committed to making regular payments to the licensed insolvency trustee for a period of up to 60 months. You will fulfil your obligations under the proposal by making all the required payments on time.

If you attend two mandatory credit counselling courses run by the licensed insolvency trustee and make all the required payments, you will have discharged the balance of your debt. This also means you have successfully avoided bankruptcy as a consumer proposal Toronto is the best alternative to bankruptcy in Toronto.

Can you pay off a consumer proposal earlier than the specified timeframe?

A consumer proposal in Ontario is an interest-free loan that is much less than what you originally owed your unsecured creditors. So, it may be beneficial to you not to pay it off early to get the full benefit of the proposal.

However, we structure all of our proposals to give you flexibility. You can take the full 5 years if you need to. If you are able to pay it off early and you have good reasons for wanting to do so, then you can.

When we word it this way, we won’t have to go back to the creditors or the court to make any timeline changes. It’s all included. Also, with other loans, there’s usually a penalty for paying them off early. But with this loan, there’s no penalty for doing so.

If your consumer proposal Toronto is not accepted

If your proposal ends up being rejected, you have a few options:

  • Try again with different, improved terms
  • Look into other options for solving your financial issues
  • File for bankruptcy

In other words, if you finish making all the payments and attend the two financial counselling sessions, you will have paid off your debt in full. Additionally, you will have avoided having to declare bankruptcy.

consumer proposal toronto
consumer proposal toronto

Consumer proposal Toronto: A consumer proposal will have an impact on your credit rating

A person who files this kind of proposal is typically given the lowest credit rating.

The information that affects your credit report is typically removed after a certain period of time. In Ontario, the notation of your consumer proposal insolvency proceeding stays on your credit record for 3 years after you have completed all of your payments and received your certificate of full performance.

Once you are done you can then start to rebuild your credit. One way to do so is by demonstrating that you can handle credit responsibly. This will involve making timely payments on your debts and maintaining a good credit history going forward. Over time, these positive steps will help to improve your credit score.

Consumer proposal Toronto: Are consumer proposals a good way to get out of debt?

You had financial difficulties and your assets and employment income were in jeopardy. Perhaps you even had wage garnishments. You needed debt solutions and you chose the only government-sanctioned debt settlement plan available in Canada. You were successful in completing it and as a result, you were able to shed all your debt in return for paying only a portion of it. You also avoided personal bankruptcy.

Without a doubt, that makes it worth it.

consumer proposal toronto
consumer proposal toronto

Consumer proposal Toronto: Benefits of filing a consumer proposal making it better than bankruptcy

There are several advantages to filing this kind of proposal, including:

  • the elimination of all unsecured debt in return for paying only a fraction of what is owed;
  • filers are able to keep their home, vehicle, and other assets as long as they can afford to make any mortgage payments or other loan payments against them;
  • a successful consumer proposal will let you avoid bankruptcy;
  • your proposal payments will be spread out over a longer period of time, making them more affordable.

Consumer proposal Toronto: Potential drawbacks of filing a consumer proposal

Some potential drawbacks to consider before filing a proposal include:

  • you may not be able to borrow money for a few years after your proposal is completed;
  • your credit score will be negatively affected but not as bad as someone who files for bankruptcy;
  • if you cannot afford to keep up the debt payments on a secured loan, such as a car loan, you will have to give it up;
  • the BIA says that your proposal must be a better alternative for your creditors than in a bankruptcy, so, working with the licensed insolvency trustee, you have to make an offer that will be approved by a majority of your creditors, and they may not agree to the first set of terms you propose.

    consumer proposal toronto
    consumer proposal toronto

CRA income tax debt can be included in consumer proposals

Definitely. CRA is an abbreviation for Canada Revenue Agency, whose purpose is to manage Canada’s revenue by collecting income taxes and other taxes owing by Canadians. CRA is the government department responsible for collecting income tax and GST/HST. CRA Canada tax debt refers to any outstanding tax debt owed to the Canadian government. If you have CRA tax debt, then you can eliminate it through a consumer proposal with a licensed consumer proposal administrator.

I have helped many people with CRA income tax debt. Examples are people who:

  • were a Director of a company and became personally liable for unremitted HST
  • filed their income tax returns and paid their income tax every year, but who are now faced with a large income tax reassessment that they cannot afford to pay
  • did not keep up with their tax filings, and once caught up, realize that they have a huge debt they cannot afford to pay

For all these people, a consumer proposal Toronto was a better alternative for both them and their creditors than a bankruptcy. If you fall into one of these categories, then I can help you eliminate that debt.

Debt consolidation versus consumer proposals

You already know from this Brandon’s Blog what a consumer proposal in Toronto, Ontario is and can do for you.

A consolidation loan is financing that lets you consolidate numerous financial obligations and pay them off with one lower interest rate loan. This aids you to conserve cash because of the lower rate of interest. Your regular monthly payment on the one loan is now much more workable. To qualify, you’ll need to have a good credit score and demonstrate that you have the income and assets to repay the loan.

Financial debt consolidation can assist you to get your finances in order, however, a consumer proposal may be a much better option if you’re struggling with financial obligations.

What will happen if I am unable to make payments on my consumer proposal?

If you stick to the terms you agreed to, your creditors and collection agencies can’t hound you. If you break the terms of your proposal or miss 3 months of payments, the proposal becomes void. If that happens, you won’t be able to file another one.

This is another disadvantage of a consumer proposal. If it becomes annulled, the only thing left would be a bankruptcy filing.

Consumer proposal Toronto: What is the popularity of consumer proposals in Toronto?

Consumer proposals are the only government-approved debt repayment program. It has become quite popular in recent years. Consumer proposals are a great option for those who are struggling to meet their financial obligations and who want to eliminate their debt.

How popular are they? The OSB recently reported that across Canada, the proportion of proposals in consumer insolvencies increased to 70.2% of all consumer insolvency filings during the 12‑month period ending February 28, 2022. So consumer proposal Toronto filings and for the rest of Canada, represent the huge majority of consumer insolvency filings.

As I already stated, you can only do this if you are insolvent and your outstanding debts to creditors are less than the maximum allowed for a consumer proposal discussed above.

consumer proposal toronto
consumer proposal toronto

For those who owe more than the consumer proposal limit, we use another section of the BIA allowing them to restructure and eliminate debt.

What is the cost of a consumer proposal Toronto?

To see if this choice is best for you, you’ll need to weigh the costs. There are two different types of costs to take into account: 1. the amount you need to offer to get creditor approval; and 2. the professional fees that you will be responsible for.

During your free consultation with the licensed insolvency trustee, you will learn what your creditors could expect from your bankruptcy. As I have already said, the BIA requires your creditors to have a better outcome than they would in your bankruptcy. The licensed insolvency trustee will make the recommendation to you of what a successful debt settlement strategy would be.

The professional fee and disbursements that a licensed insolvency trustee is allowed for administering your proposal are fixed by the BIA regulations and are called a tariff. The tariff is the same whether you live in Toronto, Ontario or anywhere else in Canada. The proposal document reads that the licensed insolvency trustee is allowed to take its tariff from the total of the proposal fund that you will pay over time. As you have already read in this blog, what you need to offer your creditors is driven off of what they can expect from your bankruptcy. The cost of the proposal administration is not taken into account in that calculation.

In a successful consumer financial restructuring, the tariff is taken from the amount the creditors would otherwise receive. So your creditors are paying the cost, not you. Therefore, you do not pay anything for the professional fee and disbursements.

Consumer proposal Toronto: What happens after a consumer proposal?

After you have successfully completed your proposal, including the credit counselling sessions, you have hopefully learned proper budgeting skills. You are now better equipped to make wiser credit decisions and know that you cannot spend more than you earn, on an after-tax basis.

There are now ways for you to start rebuilding your credit:

  • Get a secured credit card. You put down a cash deposit and that amount is your credit limit. When you pay your secured credit card debt balance in full each month and do not let the credit card company take it from your cash deposit, this will be reported to the credit reporting agencies. This improves your credit score over time.
  • You can take out a small RRSP loan when you first get your certificate of full performance. You can then pay off the loan within the next 12 months. If you make your loan payments on time, it will be reported and this improves your credit score.

You don’t want to get into debt problems again. Be careful with credit.

consumer proposal toronto
consumer proposal toronto

Consumer proposal Toronto: How to avoid being ripped off

No one wants to be cheated, especially for something as important as picking from available debt management plans or debt-relief options, the best one for you for resolving your unmanageable debt problems. Here is what you can do to protect yourself from getting taken advantage of. Before making a decision on which debt settlement company to go with, be sure to do your research. This means reading online reviews and talking to people who have gone through a restructuring proposal, to get as much information as possible.

Keep in mind that there are a lot of debt settlement companies who will promise you that either they can eliminate your debt without using a BIA insolvency process or through a consumer proposal. They charge upfront fees. Check to see if such companies are actually licensed insolvency trustees. You can do so through the OSB website.

Anyone who charges an upfront fee is not a licensed insolvency trustee. As I said, an insolvency trustee like me provides a no-cost initial consultation. As I have also told you, in a successful restructuring, it is your creditors who pay the professional fee tariff. Remember, a licensed insolvency trustee is the only debt professional who is both licensed and supervised and is the only one able in Toronto or anywhere else in Canada to be the consumer proposal administrator.

For help with a consumer proposal Toronto, please contact us

I hope you found this consumer proposal Toronto Brandon’s Blog informative. Hopefully, you now see how a successfully completed proposal can eliminate their unsecured debt from their name. It is a legally binding agreement with your creditors that can only be filed through a licensed insolvency trustee.

We understand how stressed out and anxious you have become because you cannot fix your financial situation on your own. As a government-licensed insolvency professional firm, we can help you get your finances back on track.

Trustees, like we are, are the only government-licensed and accredited professionals who provide insolvency advice and debt relief solutions. A consumer proposal is a federal government-licensed debt settlement approach that can eliminate your debt. We can help you choose what is right for you.

If you’re struggling with money problems, call the Ira Smith Team today. We’ll work with you to develop a personalized plan to get you back on track and stress-free, all while avoiding the bankruptcy process if at all possible.

If you’re struggling with debt, the Ira Smith Team can help. We have the experience and knowledge to assist individuals and companies in restructuring their debt to prevent a bankruptcy legal proceeding. Everyone’s debt story is different. We offer a free debt assessment to help you identify the best solution for your personal debt issues. Call us today and get back on the path to a healthy stress-free life.

consumer proposal toronto
consumer proposal toronto
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