Tag: student loans

STUDENT DEBT COUNSELLING: ARE WE DOING ENOUGH TO REDUCE THE COST OF STUDENT LOANS?

Post author By Brandon Smith
Post date August 8, 2016

Amazon Prime getting into the US student loan business but not student debt counselling

As you will see from this blog, there is a huge need for student debt counselling, as new entrants into the student loan business are enticing students with new offers. The financial services industry in the United States is changing rapidly with many non-traditional companies getting into the game. The latest is Amazon Prime. They’re now offering discounted student loans to Amazon Prime Student customers through a partnership with Wells Fargo.

Although this type of program is now only available in the U.S., and while we typically discuss things that affect Canadians, we felt that anything that could cut the cost of a student loan was worth reporting. However, keep in mind that this does nothing for student debt counselling so that students are better able to handle debt. It is merely a financial opportunity with little risk as further described below.

Our previous student debt counselling and student loans blogs and vlogs

Student loan debt is such a serious issue that we’ve written a series of blogs and vlogs on the subject.

Canadian Federation of Students study

According to the Canadian Federation of Students (CFS), the impact of Canada student loan debt is that today’s students are the most indebted generation in Canadian history. They can certainly use student debt counselling.

The average student graduates with over $28,000 of debt. Tuition fees and living costs continue to rise, and there’s no solution in sight. The CFS has been lobbying the federal government for students, to no avail. And it’s not better south of the border where tuitions and the student loan debt is proportionally greater.

Perhaps CFS should also lobby the provincial governments to include student debt counselling as a mandatory grade 12 subject in high school!

Is Student Debt Counselling Being Offered to Amazon Prime Student customers?

Through the partnership, Wells Fargo is not offering any student debt counselling, but is offering student loans Amazon Prime Student Customers (not students whose parents have a Prime membership of their own):

A 0.50% interest rate discount
This can be added on top of a 0.25% interest rate reduction for enrolling in an automatic monthly loan repayment plan
In addition, any interest rate discount tied to another Wells Fargo global promotion

Students can apply for a new student loan or refinance existing student loans.

Why would Amazon Prime want to get into the student loan business

Of course this partnership benefits Amazon and Wells Fargo financially. However, it does not give any education to college students through student debt counselling. Amazon Prime will no doubt have many more sign ups and Wells Fargo will have access to many more potential borrowers. But the bottom line is that the student will benefit by having access to discounted student loans. Hopefully someone in Canada will also find a way to help lighten the student loan debt load.

However, there is even a greater reason. In Canada, a bankruptcy discharge will only end student loans if you’ve ceased to be a full or part-time student for more than seven years and either declare personal bankruptcy or make a debt proposal to your creditors, most likely through a consumer proposal. The only other option is to attempt to seek from the Court relief because of undue hardship, but this is very difficult, if not impossible.

If you think it is difficult under Canadian law to end student loans, it really is impossible under the US Bankruptcy Code. The leading case in the US, which subsequent decisions have followed, is, Marie Brunner v. New York State Higher Education Services Corp. (October 14, 1987, #41, Docket 87-5013). This case set a precedent for defining the concept “undue hardship” in bankruptcy discharges of student loans.

Suffice to say that if a bankrupt in the US is seeking a discharge of all of his or her debts, including student loan debt, the mere fact that they can afford to hire and pay an attorney can be used as evidence that if they have funds to pay legal counsel, then there is no undue hardship for them to agree to a repayment plan on account of the student loan debt after they get their discharge from bankruptcy and their non-student loan debts.

Since the debt will in almost every case always be owing and payable, it is a safe bet for Amazon Prime.

Are you in need of student debt counselling or credit counselling?

No matter the cause of your serious debt issues, The Ira Smith Team is here to help. Debt is not insurmountable; there are always options. With proper counselling, immediate action and a solid plan, we can help get your life back on track Starting Over, Starting Now. Our trustees are also certified in credit counselling. Give us a call today.

Tags Amazon Prime, Amazon Prime Student, canada student loan, discounted student loans, Ira Smith Trustee, marie brunner, starting over starting now, student debt, student debt counselling, student loan debt, student loan repayment, student loans, the impact of student debt

Brandon Blog Post

STUDENT LOANS DEBT: WILL BANKRUPTCY ELIMINATE IT IF YOU ARE NOT THE STUDENT?

Post author By Brandon Smith
Post date April 25, 2016

An interesting American case about student loans debt

Student loans debt is nearly impossible to get rid of in bankruptcy. A case winding its way through the US court system has piqued our intellectual interest. A father, who is a discharged bankrupt, is taking the lender who HE borrowed funds from for his child’s education to Court. The lender is continuing to pursue collection efforts against the father on the basis that the provisions of the Bankruptcy Reform Act of 1978, as amended, codified in Title 11 of the United States Code and commonly called the “Bankruptcy Code” (“Code”), does not release the father from what is in reality student loans debt. The father is taking the lender to Court for a ruling that by virtue of his discharge, he is released from that debt like all his other debts. It has raised the question whether the same student loans debt rules should apply in that case.

The Canadian perspective

We are not qualified to express any opinion on the US legal case before the US Court, but we are qualified to discuss the issue from the Canadian perspective. We started thinking whether this same situation could arise in Canada for student loans.

Last week we discussed student debt bankruptcy from the perspective of the student. Previously, we have written blogs and created a vlog about student loan debt, including:

So this week, we’re discussing student loan debt and bankruptcy from a very different and interesting angle. Could a Canadian lender take the position against a Canadian parent borrower who on the loan application described the purpose of the loans for the funding of his or her child’s Canadian post-secondary education, that the loans qualify as student loans under the applicable Canadian statutes, including, the Bankruptcy and Insolvency Act (Canada) (BIA). Stated otherwise, are such loans the same as student loans under Canadian law and can bankruptcy cut such loans if you’re not the student?

Are student loans necessary?

Many young Canadians need student loans to get a post-secondary education. To qualify as Canadian student loan debt, the loans must be issued under a specific Canadian student loan statute: the (i) Canada Student Loans Act; (ii) Canada Student Financial Assistance Act; (iii) Apprentice Loans Act; or (iv) any enactment of a province that provides for loans or guarantees of loans to students.

All students need financial help to be full-time university students. The only real places that such assistance can come from is either the parents, if they are willing and able to do so, student loans, or both. Many Canadian parents pay a hefty part of students’ tuition fees, even if it means sacrificing their financial stability, to help their children avoid a post-graduation life burdened by tens of thousands of dollars of student debt. Others may wish to, but they cannot afford to do so.

So are student loans and the resultant debt necessary? In most cases, yes.

Can a parent co-sign for or guarantee their child’s student loans?

The short answer is no. As I have already stated, to qualify as a student loan, the loan has to be made under the provisions of one of the Federal loan statutes mentioned above, or any such similar Provincial legislation. Nowhere in those student loans statutes is there a place for either a guarantor or cosigner. In fact, the Federal statutes all have similar language stating that upon the death of the borrower, the Federal government will repay the outstanding part of the loan. In addition to there not being any sections that allow for a guarantor or cosigner, the specific section dealing with the death of the borrower does not limit the government’s guarantee by using words like “….and if the lender is unable to collect in full from any guarantor or cosigner”. The reason is simple, student loans cannot be guaranteed or otherwise borrowed by anyone other than the student.

Will bankruptcy eliminate student loans debt?

Student loans are nearly impossible to get rid of in bankruptcy. Section 178(1) of the BIA states:

“(g) any debt or obligation in respect of a loan made under the Canada Student Loans Act, the Canada Student Financial Assistance Act or any enactment of a province that provides for loans or guarantees of loans to students where the date of bankruptcy of the bankrupt occurred:

(i) before the date on which the bankrupt ceased to be a full- or part-time student, as the case may be, under the applicable Act or enactment, or

(ii) within seven years after the date on which the bankrupt ceased to be a full- or part-time student;

(g.1) any debt or obligation in respect of a loan made under the Apprentice Loans Act where the date of bankruptcy of the bankrupt occurred

(i) before the date on which the bankrupt ceased, under that Act, to be an eligible apprentice within the meaning of that Act, or

(ii) within seven years after the date on which the bankrupt ceased to be an eligible apprentice;”

So if you’re a student, bankruptcy will only end student loans if you’ve ceased to be a full or part-time student for more than seven years and either declare personal bankruptcy or make a debt proposal to your creditors, most likely through a consumer proposal. The only other option is to attempt to seek from the Court relief because of undue hardship, but this is very difficult, if not impossible.

What is required to meet the burden of undue hardship?

If the Court is satisfied that you meet the two-pronged test, you’ll be discharged from your student loans obligations in bankruptcy only if the :

acted in good faith in connection with your obligation to repay your student loan debt; and (emphasis added)
have experienced, and will continue to experience, financial difficulty that will prevent you from repaying this debt

It’s then up to the bankruptcy court to decide whether they forgive your loans, either in full or in part. One of the difficulties in trying to prove undue hardship is that there is no clear definition for what makes up hardship; each bankruptcy court across Canada may use a slightly different interpretation. The only thing that’s clear is that you must prove that having to continue to pay the student loans after bankruptcy would be a financial hardship for you. If you try this route, the Court will look at ALL of your income and expenses.

The Court may decide you are not trying hard enough, or, may look at things like your small car you use to get to work, which you purchased used (instead of taking public transit), your cell phone and your internet expenses, and decide that these are luxuries you do not need. If you are a smoker, the Court may very well decide that if you were not addicted to tobacco, you could start to repay some part of your student loans.

If you think my examples are picayune or silly, just look up the case of Fournier (Re), 2009 CanLII 31606 (ON SC).

Will bankruptcy eliminate student loan debt if you are not the student?

I don’t know what the eventual disposition of the US case which I mentioned at the beginning of this blog will be, but based on all the above, in my view in the Canadian context, a parent, relative or friend cannot guarantee, cosign or borrow for a loan that qualifies as a Canadian student loan. If you borrow to fund your child’s education, then you are borrowing under an ordinary commercial transaction and the applicable student loan sections of the BIA do not apply.

So if you have borrowed for this purpose, only the normal provisions of the BIA apply, and you will get a discharge from that and your other debts upon your discharge from bankruptcy. However, if you pledged any of your assets in support of such borrowings, such as your home, the lender does have the right to enforce its security against such assets if you cannot repay, whether you are bankrupt or not.

What should you do if you have too much debt?

If you’re drowning because of your finances, we know we can help you. Although many people believe that bankruptcy is the only way of out serious debt, that’s not always the case. Ira Smith Trustee & Receiver Inc.can discuss other bankruptcy alternatives with you which include credit counselling, debt consolidation and consumer proposals.

If we get to see you early enough, at the first sign of trouble, you can use and carry out one of the bankruptcy alternatives, to free you from the burden of your financial challenges to go on to be a productive, contributing member of society and not be plagued by debt problems.

Bankruptcy law is very complicated and requires the expertise of a professional licensed insolvency trustee. Ira Smith Trustee & Receiver Inc. is here to help. With a cumulative 50+ years of experience dealing with diverse issues and complex files, we can get you back on your feet Starting Over, Starting Now. We can help. Call us today.

People consider us bankruptcy experts because we wrote the eBook which is sold on Amazon.ca, explaining the Canadian personal insolvency and bankruptcy system, specifically directed to the person stressed out with too much debt.

Brandon Blog Post

WHY GOOD DEBT HAD BEEN SO POPULAR TILL NOW

Post author By Brandon Smith
Post date June 23, 2015

Is there really good debt? Debt is a four letter word and it’s strangling many Canadians. Even if you have what people refer to as good debt, if you are having difficulty servicing it, then you have debt problems, no matter how you classify the debt itself. However, many believe that mortgages and student loans are good debt.

Let’s have a look at mortgage debt. Mortgages have been considered good debt because they allow you to buy an appreciating asset which you can then sell at a considerable profit. According to the Royal Bank of Canada:

Canadians have taken on $80-billion worth of mortgages, personal loans and credit card debt in the past year
Household debt totalled $1.82-trillion in January
Most of the growth came from new residential mortgages, which rose 5.4% per cent in January compared to a year earlier, to nearly $1.3 trillion
Non-bank lenders, which represent about one-fifth of mortgages, drove the residential housing market over the past year, with outstanding mortgage debt rising 6.3% compared to 4.3% cent among banks

The Globe and Mail received a memo from the Canadian Mortgage and Housing Corporation (CMHC) stating that it was “concerned about reduced household flexibility resulting from elevated debt levels as well as diversion of capital into residential housing investments.” Ten to twenty years ago Canadians were able to buy into an affordable housing market that greatly appreciated. However, with detached housing prices rising above $1-million in Toronto and Vancouver, it’s increasingly difficult to buy into the housing market and unlikely that level of appreciation will ever be seen again. So if you have a reasonable down payment and you can handle the monthly mortgage payments within your budget, then you can handle this debt and therefore it is good debt.

Let’s have a look at student loans. Student loans have always been considered good debt. In years past a university degree guaranteed you a good job upon graduation. However, in today’s world we have record numbers of unemployed and under-employed graduates with a mountain of student debt. Statistics Canada’s Survey of Financial Security reports that student debt grew 44.1% from 1999 to 2012, or 24.4% between 2005 and 2012. And, one in eight Canadian families is carrying student debt. The average student is having a great deal of difficulty paying off their student loans and according to the Canada Student Loans Program, most students take nearly 10 years to pay off their loans – with some taking the maximum 14.5 years. Under this scenario, is it really good debt?

The reality is that both good debt and bad debt can strangle you. Returning to financial health requires the help of a professional. Struggling from paycheque to paycheque is no way to live. Contact Ira Smith Trustee & Receiver Inc. With immediate action and a solid financial plan we can set you on a course to a debt free life Starting Over, Starting Now.

Tags Debt, debt problems, good debt, mortgage debt, paycheque to paycheque, starting over starting now, student debt, student loans, trustee

Brandon Blog Post

DEATH OF A DEBTOR: WHO’S RESPONSIBLE FOR THE DEBTS?

Post author By Brandon Smith
Post date March 24, 2015

When you think of death of a debtor, you can’t help but be reminded of Death of a Salesman, Arthur Miller’s Pulitzer Prize winning play written in 1949 and still timely today. The play was essentially an attack on the American dream of materialism as embodied by the central character, Willy Loman. His entire life he lived paycheque to paycheque, waiting for his big break that never came. All the while the debts kept piling up. One day Willy Loman was fired and as a result he took his own life leaving his family to deal with the death of a debtor.

From time to time, we are consulted regarding insolvent estates of deceased persons.

When the death of a debtor occurs, who is responsible for the debts?

Although some creditors may try to collect from the spouse or other family members, debts do not transfer by virtue of marriage or death unless the debt is “joint” in which case the survivor will be required to pay the balance of the account.
Debts are normally paid out of the assets of the estate of the deceased before distributions are made to heirs (before any money can be distributed to heirs, all the proven debts must be paid).
If the estate is insolvent (the assets of the estate are not sufficient to pay the debts), then the order of payment is normally prescribed by provincial legislation.
If warranted, the executors can make application to Bankruptcy Court for an order allowing them to assign the deceased’s estate into bankruptcy. In that event, then the Bankruptcy and Insolvency Act (Canada), the federal legislation, will prescribe the order of payment.
If there is no money in the estate to pay the debt and if the debt is only in the name of the deceased person, the credit grantor will be left with no option but to write off the debt as uncollectible.

Some debts may be extinguished upon the death of the debtor:

Insured mortgages
Insured loans
The Canada Student Financial Assistance Act provides for some student loans to be repaid by the federal government in the event of the student’s death or permanent disability.

Make sure you know and understand the state of your finances before you have to deal with death of a debtor. If you’re living from paycheque to paycheque and on the edge of financial disaster, contact a professional trustee today. The Ira Smith team can help you solve your financial problems with immediate action and the right plan so that Starting Over, Starting Now you can enjoy financial freedom.

Tags Bankruptcy, Bankruptcy and Insolvency Act, death of a debtor, Debt, debts, financial disaster, insolvent estates of deceased persons, paycheque to paycheque, starting over starting now, student loans, toronto, trustee

Brandon Blog Post

CANADIAN PARENTS PAYING STUDENT LOANS

Post author By Brandon Smith
Post date March 17, 2015

Canadian parents paying student loans is much more common than you’d think. That was never the plan. Your child was supposed to get a university degree with the help of student loans, graduate, land a good paying job and pay off their student loans. The reality of the situation is quite different. Firstly it’s a misconception that student loans cover the costs of a university degree. Student loans may cover a portion of tuition costs. Statistics Canada says undergraduate students paid an average of $5,772 in tuition fees in 2013 to 2014. But that average rises, depending on the field of study: law studies cost an average of $10,039 while undergraduate studies in dentistry cost $17,324 during that same year. This may seem manageable, but this only tells a small part of the story. When you factor in the costs of books, living expenses and transportation, according to a recent Bank of Montreal study the total current cost for an undergraduate university degree can exceed $80,000 and is expected to surpass $140,000 by the time a child born in 2014 is old enough to enroll.

The second misconception is that a university degree is a guarantee of a good paying job. The reality is that it’s a very competitive market out there and many students aren’t making enough to repay student loans. Instead Canadian parents paying student loans is becoming an all too common story. In addition they’re paying for books and living expenses, even if it means sacrificing their financial stability. They’re delaying retirement, working more and borrowing money, potentially putting themselves in financial jeopardy.

There appears to be very few options when it comes to repaying student loans and that is another reason that leads to Canadian parents paying student loans. Even bankruptcy doesn’t discharge student loans until seven years after you’ve left school. In exceptional cases after five years you can apply to the court for special consideration (e.g. a disability which prevents you from working).

Canadian parents paying student loans may be in a financial danger zone. If you’re experiencing serious debt issues as a result of student loans or any other reason, you need professional help today. Contact Ira Smith Trustee & Receiver Inc. With a cumulative 50+ years of experience dealing with diverse issues and complex files, the Ira Smith team delivers the highest quality of professional service. Starting Over, Starting Now we can help you solve your financial problems.

Tags Bankruptcy, Canadian parents paying student loans, Debt, starting over starting now, student loans, trustee

Brandon Blog Post

MILLENNIAL HOME OWNERSHIP: MILLENNIALS ARE STRUGGLING WITH DEBT

Post author By Brandon Smith
Post date November 18, 2014

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

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

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

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

Tags Bankruptcy, consumer proposals, credit card debt, credit counselling, Debt, debt consolidation, Gen Y, millennial home ownership, Millennials, starting over starting now, student loans

Brandon Blog Post

GEN Y TRAPPED: MILLENNIALS IN DEBT

Post author By Brandon Smith
Post date September 23, 2014

Millennials in debt is an important issue. There’s been a considerable amount of press surrounding the problems facing Baby Boomers in debt and seniors in debt and we’ve devoted quite a few blogs to these very serious issues:

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

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

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

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

Tags Baby Boomers in debt, Bankruptcy, credit card debt, Debt, financial plan, Gen Y, gen y debt, gen y in debt, Generation Y, Millennials, millennials in debt, professional trustee, seniors in debt, starting over starting now, student debt, student loans, trustee

Brandon Blog Post

CANADA STUDENT LOAN REPAYMENT: WHAT CAN YOU DO IF YOU CAN’T REPAY?

Post author By Brandon Smith
Post date September 2, 2014

Canada student loan repayment is and will continue to be a large issue. Student loan debt can be an enormous burden. Between 2012 and 2013, more than 400,000 students borrowed money to help pay for more post secondary education. (The Canadian Federation of Students). Accumulated federal student loan debt in Canada is now more than $15-billion. That doesn’t include obligations on lines of credit, credit cards or provincial loan programs – a total estimated to be as much as $8-billion. (Globe & Mail). This amount of debt affects our entire economy. Unfortunately many students can’t pay back their loans causing Canada student loan repayment to be a huge issue for both recent graduates and our economy. After trying unsuccessfully to collect for more than six years, the government writes off the loans. In total, $540 million worth of student loans has been written off over the last three years. (Human Resources and Skills Development Canada).

What happens if you don’t make your student loan payments? Your student loan will not be erased until you have paid it in full. If you don’t make your loan payments, you will be in default. Your Canada student loan repayment obligation continues, notwithstanding the above-noted government loan reserve and write-off policy.

What happens if I’m in default on my student loans? If you are in default of your Canada student loan repayment obligations:

Your debt will be turned over to a collection agency.
You will be reported to a credit bureau.
You could be ineligible for further loans until the default is cleared.
It can affect your ability to get a car loan, mortgage or credit card.
Your income tax refund and HST rebate can be withheld.
Interest will continue to build up on the unpaid balance of your loan.

Will bankruptcy erase my student loans? Bankruptcy will not discharge your student loans until you’ve been out of school for seven years. There are cases when student loans have been discharged after five years, but the borrower has to prove before a court that they would undergo extreme hardship if required to wait seven years. So depending on how long it has been since you were last a full or part-time student for which you received a student loan, bankruptcy may not clear you of your Canada student loan repayment obligations.

What can I do if I can’t meet my Canada student loan repayment obligations? One of your options is the federal government’s program called the Repayment Assistance Plan (RAP). There are eligibility requirements and your loan must not be in default. If you qualify:

You can make affordable payments based on your gross family income and family size. Your loan payments would never exceed 20% of your gross family income.
Your monthly student loan payments will either be reduced, or you will not have to make any payments.
You have a maximum repayment period of 15 years (or 10 years for qualified borrowers with a permanent disability).
Enrolment is not automatic and you would have to re-apply for this plan every 6 months.

Don’t wait for your Canada student loan repayment debt to become critical and don’t ignore any of your debt. It will not go away on its own. You need professional help from a trustee. Contact Ira Smith Trustee & Receiver Inc. and make an appointment today. We approach every file with the attitude that financial problems can be solved given immediate action and the right plan. Starting Over, Starting Now you can get back on the road to financial health.

Tags Bankruptcy, Canada student loan repayment, collection agency, credit bureau, Debt, Lines of Credit, RAP, repayment assistance plan, starting over starting now, student loan, student loan debt, student loans, trustee

Brandon Blog Post

NO CREDIT CHECK LOAN: FOR CANADA DAY?

Post author By Brandon Smith
Post date June 29, 2014

The no credit check loan and credit card industries are being used to fund holiday travel. The American Automobile Association reported that: “This year nearly 41 million Americans plan to celebrate the nation’s birthday with a getaway…” said AAA President and CEO Robert L. Darbelnet.

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

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

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

Some examples of good debt:

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

Some examples of bad debt:

Credit card debt
Car loans (if it isn’t to get you to and from work, but rather a “toy”)
Line of credit
Debt to take a vacation
No credit check loan debt

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

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

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

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

Brandon Blog Post

IS BABY BOOMERS DEBT PREVENTING THEM FROM GETTING MARRIED?

Post author By Brandon Smith
Post date June 24, 2014

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

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

Supporting children and/or aging parents
Grey divorce
Paying for children’s post secondary education
Pay off children’s student loans
Mortgage
Credit card debt

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

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

Tags baby boomers, baby boomers debt, boomers, credit card debt, Debt, mortgage, post secondary education, starting over starting now, student loans, trustee