Tips to Manage Rising Consumer Costs 

Increases in essential costs of living aren’t a new foe for British Columbians, with day-to-day expenses from rent to groceries to gas having noticeably risen in recent years. Although most people can’t substantially cut their living expenses, there are some things you can try to gain some financial breathing room.

Prioritize Your Household Budget

A monthly personal budget that’s balanced to your specific situation and goals is a cornerstone of having control of your finances. Whether you already have a budget, or you are putting one together for the first time, create a budget to plan:

• Anticipated regular income
  • If your income varies use your lower earnings as an estimate, and don’t bank on irregular cash injections such as tax refunds.
• Fixed expenses such as rent and vehicle payments
• Categorizing and managing monthly variable expenses like groceries and personal spending
  • Be sure to budget a monthly allowance to cover irregular expenses, such as annual insurance renewals.

Once your new budget is decided, track your actual income and spending to see whether adjustments should be made to get your budget plans and financial realities in-line. Also pay extra attention to your personal spending habits, and related emotional drivers. For example, you may want to unsubscribe from retailer emails that compel you to spend more simply because there’s a sale you don’t want to miss out on.

Book Your Free Consultation

Reconsider Your Non-Essential Costs 

Beyond your grocery cart, scrutinize expenses you have control over, and reconsider whether you will continue spending money on non-essentials you may decide no longer make the cut. Costs to evaluate might include:

• Tiers for services such as TV and digital streaming, shopping and app subscriptions
• Banking costs, including credit card fees, interest rates, and balance protection insurances
  • There are many options for free banking, and no-fee credit cards.
  • Depending on your circumstances, it may not be worth having balance protection insurance, as premiums are based on your balance and in many cases the coverage does little to reduce your balance.

Debunking Common Consumer Debt Myths – Learn More

It’s important to remember that budgeting is intended to be a tool used to your benefit, not a punishment – and deciding on your spending priorities, needs and wants, are important components that everyone should consider, regardless of income levels.

Book Your Free Consultation

Tips for Future and Emergency Financial Planning 

After weathering a global pandemic and aggressive inflation, many consumers are feeling weary about what they can do to future-plan. While we can’t control all the external influences, taking charge of what is within your power can help you mitigate unforeseen challenges that may come.

Keep Your Income Taxes Filed (and Paid) Up-To-Date

Even if you don’t expect to owe, it’s in your best interest to keep paperwork and personal tax filings up to date (and clear any balance payable as soon as possible). For example:

• Many government credits and benefits rely on Canada Revenue Agency (CRA) information
• Your Notice of Assessment from CRA is often the best way to easily prove your income for housing applications

Learn About Tax and Canada Revenue Agency Debt Forgiveness

Focus on Becoming Debt-Free

Paying down your personal debt is one of the most positive ways to improve your finances – and taking debt-stress out of the equation is doubly good for your wellbeing. Depending on your situation, you may consider strategies such as:

• Restructuring your debt, such as with a balance transfer or debt consolidation (consumers do also have options to consolidate without borrowing)
• If you’re stuck just making minimum payments on your debts each month, carefully review your account statements to understand if you are truly making progress. Sometimes as little as $10 from a $200 monthly payment actually goes to reduce the principal, the rest is eaten up by interest or fees
  • Making just minimum payments on even a $5,000 credit card debt can be a decades-long repayment plan.
• If you’re making only (or not much more than) minimum monthly payments on your debt and/or it will take you more than five years to pay off your non-mortgage debts, understand these are indicators that your personal debt situation is risky, and you may benefit from getting information and support from a Licensed Insolvency Trustee.

Do the “Rule of 60” Math

• Divide your total non-mortgage debts by 60 – does the number look like a monthly payment you could afford in order to pay your debts off in five years? If that five-year figure barely fits your budget (or doesn’t fit at all) then you can likely assume you will need a solution that will cut your debt.

Take 30 minutes to talk with a local Licensed Insolvency Trustee about your options and resources to help you get your debt paid off. Many consumers are surprised to learn about the solutions available to them, like a Consumer Proposal that both consolidates and reduces your debts, and it’s free to have a confidential consultation and get advice from a qualified professional.

Know that you are not alone – BC Licensed Insolvency Trustees are here to offer you resources and support. You can live free from debt and its overwhelming stress. Connect with a caring, non-judgmental Sands & Associates debt expert today to talk about your debt-free plan.

Book Your Free Consultation

The post How to Manage Personal Debt and Finances Through Economic Instability appeared first on Sands & Associates.

• Every day we provide debt advice and guidance to consumers with a range of needs, and a common thread is that “knowing is not owing” – people need to have the facts so they can make informed decisions about their unique situation.
• Even if you don’t consider your debt a problem, it’s important to understand your rights and responsibilities – owing money is stressful, there are many ins and outs when it comes to debt, and unfortunately what you don’t know can hurt you financially.

Read on as we break down 10 of the most common consumer debt myths and misconceptions. 

Myths About Debt You Owe

Myth: Creditors Can Always Sue You Over a Debt Owed

Fact: Canadian law sets out a statute of limitations on debt.

In BC, the Limitations Act caps the period of time a creditor has to take legal action against you (i.e. sue you) for a debt you owe. What this essentially means is that while the debt does remain payable, if it has been two years or more since you made a payment or acknowledged the debt in writing, then your creditor may not have further recourse to collect the debt from you, beyond putting notations on your credit history and sending you mail.

Myth: Co-signing Debt Makes You Responsible for Half

Fact: By co-signing a debt, you become equally responsible for repaying 100% of the unpaid balance to the lender.

When you co-sign a debt, if the original borrower doesn’t pay back the debt the lender can demand that anyone listed in the loan or agreement (i.e. the co-signer/co-borrower) repay the entire balance – not half. This type of liability is known as ‘joint and several’.

• Read your applications and lending agreements carefully to understand the terms of borrowing and who is responsible for what – these can change depending on the lender and whether they are considering an application/account for “additional cardholders” or “co-borrowers/co-applicants.” Always check the fine print!

Myth: Marrying Someone Makes You Responsible for Paying Their Debt

Fact: One spouse is not responsible for repaying the debts of the other spouse solely by virtue of marriage or cohabitation.

You are responsible for repaying debts you’ve co-signed for or taken on jointly (as discussed above), or debts triggered as marital debts by the act of separation under the Family Law Act. You cannot be suddenly made liable for a debt owed solely by your spouse just because you got married. Essentially, there is no way to “marry into” a debt.

Am I Responsible for my Spouse’s Debts? Learn More

Myth: You Should Always Buy Insurance Protection

Fact: Credit card balance protection insurance often isn’t “worth” its cost.

Some banks are quick to sell and aggressively promote various insurance products, and while some are worthwhile considerations, like life insurance for a young family, others provide little value in most circumstances – one of these Licensed Insolvency Trustees often caution against is ‘balance protection insurance’.

• Even if you don’t carry a balance each month you pay fees into this product, which can be as high as 1% of the purchases on the card. Over the course of one year, this could take a 20% credit card interest rate to more than 32%.
• The other issue is that in most instances where you’d expect the insurance to help, it does very little. For example, if you lose your job, it may cover the minimum payments for the period you are unemployed – but very little of these payments will reduce the balance you owe on the card.

Myth: Incorporating Your Business Fully Protects Owners Personally

Fact: While corporations may protect owners from their debts to some degree, there is still a personal liability created for certain debts that cannot be avoided.

This personal liability can include debts such as:

• Wages; GST and payroll remittances
• Debts you have signed a personal guarantee for

Many business owners are aware that essentially any debts a sole proprietor or partnership business accumulate are payable by their owners, since there is no distinction between business and owner, but unfortunately, some business owners have a false sense of security when it comes to protecting their personal assets and liabilities if they incorporate their business.

Myths About Managing Debt

Myth: There’s No Forgiveness or Renegotiation Option for Government Debts

Fact: You can have government debts reduced and cleared by filing a Consumer Proposal (or forgiven through bankruptcy).

A Consumer Proposal is a legal debt consolidation remedy that can be used to stop all interest, reduce amounts owing by up to 50-80%, and work out a payment plan for what you can afford to repay. Government debts like taxes, business GST, student loans, benefit overpayments and more – plus debts like credit cards, payday loans, lines of credit, etc. can all be dealt with using this powerful tool, which will also halt a wage seizure or bank account freeze.

Myth: Minimum Payments on Credit Cards are Enough

Fact: Making just minimum monthly payments may keep your account in good standing, but it’s not enough to get debt paid off without incurring considerable interest costs.

Many individuals fall into a trap of just making the minimum payments on their credit cards and assuming that they are making progress towards getting their debt paid off. The reality is that at 20% interest, making minimum monthly payments on a $10,000 debt could take more than 25 years to clear and will cost more than $12,000 in additional – and avoidable –  interest charges.

• Banks must disclose exactly how long it will take to pay off a debt if you make only the minimum payments, so you can see this breakdown on your own bill.
• If you can only afford minimum payments each month, you very likely have a debt problem and should talk with a Licensed Insolvency Trustee as soon as possible.

Compare Your Debt Options

Enter your total amount of debt (excluding mortgage and car loan) and we’ll show you a list of options.

Myth: Your Credit Score is a Reliable Indicator of ‘Financial Health’

Fact: A credit score is essentially a numeric rating used by lenders to determine whether they will loan money, and at what cost.

Part of the problem with taking a ‘good’ credit score as an indication of financial and debt health is that habits that drive a high rating are often at odds with habits that lead to financial success. Since a credit rating mostly measures whether you pay your bills on time it considers nothing about whether those bills are too high or if you have any savings or assets at all.

Myth: Debt Consolidation Must be Done by Borrowing

Fact: You can consolidate your debt without borrowing or interest by making a Consumer Proposal.

Many people considering how to manage their debts believe their options amount to consolidation loans, credit counselling programs, or bankruptcy – but these are not your only options!

• Consumer Proposals are an effective debt solution that allows you to consolidate your debts, repaying what you can afford, with the unpaid balance being forgiven by your creditors.
• This consolidation option requires no borrowing and interest charges (such as a consolidation loan), nor require you to pay added professional fees (such as credit counselling).

Myth: Canada has Government-Sponsored Debt Relief Programs

Fact: The Canadian government does not offer grants or programs for personal debt repayment other than the options provided by a Licensed Insolvency Trustee.

The Canadian government does not have government grants or debt programs available, but it does regulate legitimate legal debt relief options that are available through Canada’s designated debt help professionals – Licensed Insolvency Trustees – namely Consumer Proposals (to consolidate and cut debt) and bankruptcy (to get debt forgiveness), as well as some student loan relief administered through Canada Student Loans.

Get Information and Advice About Your Debt and Debt Options 

The best and safest way to get accurate information about debt, and your debt options and resources, is to reach out directly to a Licensed Insolvency Trustee local to your province and ask to have a free consultation – you don’t need a referral to talk confidentially with us.

• Sands & Associates is available for help seven days a week and we have options for in-person appointments, as well as full support over the phone and online videos.
• In about 30 minutes you should have a clear understanding of your situation and next steps in the debt solution you decide best fits your needs. Knowing is not owing! 

Get solutions, support, and a debt-free plan that’s right for you.

The post Debunking Common Consumer Debt Myths appeared first on Sands & Associates.

Having polled over 1,700 participants who recently restructured their debts using a legal debt solution, the 2023 BC Consumer Debt Study offers a unique view into consumer debt issues in the province. Blair Mantin, President of Sands & Associates, the firm of Licensed Insolvency Trustees who undertook the study, joined CTV News to discuss the study’s findings.

Watch the clips here and learn more below:

Recent BC Consumer Debt Problems – by the Numbers

• The 2023 BC Consumer Debt Study’s largest proportion of participants (36%) said they had $25,000-$49,999 of debt (excluding vehicle loans/mortgages) when they started a formal debt relief process.
• Almost 3 in 5 people (58%) said credit card debt was the main type of debt they had, nearly five times higher than the next debt type.
• Close to 1 in 8 individuals (12%) claimed payday or instalment loans was their main type of debt, and tax debt (personal income tax, GST, etc.) took the third spot at 11%.

Credit cards and payday loans can be considered interest-heavy credit, and consumers can easily develop a borrow-repay-borrow cycle that is often impossible to break with interest rapidly accumulating. 

Dos and Don’ts for Credit Cards and Managing Your Credit Card Debt – Read More

What Are Some Common Causes of Personal Debt Problems?

The common causes of debt revealed in the 2023 BC Consumer Debt Study expose the vulnerability of many consumers when it comes to their ability to financially weather personal and economic challenges. Five of the top six common causes of debt as reported by insolvent consumers relate to triggering events or circumstances that are likely beyond an individual’s clear control:

• Just over a quarter of BC consumers polled (27%) said their debt was caused by overextended credit due to general financial mismanagement.
• Closely following, the second-most reported cause of debt for 1 in 4 consumers (25%) was using credit for essential costs of living income could not cover.
• Following these, the remaining top six causes of individuals’ debt were attributed to: Illness, injury, or health-related problems (11%); Marital or relationship breakdown (7%); Job related issue (5%) and Pandemic-related job loss or reduction in work hours (5%).

95% of individuals participating in the 2023 BC Consumer Debt Study said their household has been impacted by recent inflation increases, with the largest proportion (88%) noting inflation has their household now spending more on necessities such as food and gas.

• Half (50%) also say their household is no longer able to accumulate as much savings, leaving consumers further exposed to difficulties in meeting unanticipated financial needs.

There was a bright spot in the findings; however, with over 4 in 5 people (87%) saying their insolvency filing (making a Consumer Proposal or declaring Personal Bankruptcy) has helped them manage day-to-day finances despite noticeable rising costs.

What Happens When You Can’t Pay Your Debt? Learn More

Steep Costs of Unmanageable Debt – Coping with a Debt Problem

Individuals participating in the 2023 BC Consumer Debt Study reported a range of ‘symptoms’ brought on by their unmanageable debt, including:

• 4 in 5 people (83%) said they had a constant worry about debt.
• Nearly 4 in 5 people (79%) said their mental health suffered by being in debt, and 3 in 5 (61%) said their self-esteem suffered because of being in debt. Almost half of respondents (49%) said debt caused their physical health to suffer.
• Over three-quarters of individuals surveyed (77%) said they experienced anxiety from the stress of debt; also 66% feelings of helplessness or hopelessness, and 61% depression.
• Almost 1 in 6 people (16%) said they experienced suicidal ideation because of their debt-stress.

Debt Warning Signs and Delays Seeking Debt Help

Over 7 in 10 people polled (71%) said overwhelming stress was how they knew their debts were becoming a problem – and despite this, more than 96% of survey respondents did not seek professional help right away. 

• Most respondents (64%) said they waited to seek professional debt help because I wanted to manage my debt on my own.
• Further top reasons individuals said they waited to seek professional support were: I felt ashamed I couldn’t handle the debts I had incurred (56%) and I was embarrassed to ask for help (51%).

Other top-identified signs of a debt problem reported by consumers were more transactional:

• Only making minimum payments (60%).
• Seeing debt balances remain almost the same every month, despite making payments (55%).

A lack of visibility around legal debt help resources was also a significant barrier that contributed to individuals postponing seeking professional support, with a third of survey respondents (34%) saying I thought there was no solution to my situation; more than 1 in 4 (27%) I didn’t know where to seek help and 17% I had misinformation about how the Consumer Proposal and/or Bankruptcy process worked.

Debt Forgiveness with Personal Bankruptcy: Step-by-Step

How Did People Attempt to Solve Their Debt Problems?

Despite the significant personal impacts of their debt issues, fewer than 4% of people polled said they sought help right away from a debt help professional, and, in this time, individuals attempted a variety of different tactics to solve their debt problems.

• Many people turned to more borrowing to try to manage their debt, with over a third of survey participants (36%) saying they applied to extend credit limits on existing debts and 34% who borrowed from family or friends to make debt payments.
• More than 1 in 4 individuals (26%) applied for consolidation financing; 25% used payday or instalment loans, and 4% asked family or friends to co-sign a consolidation loan.

Participants in the 2023 BC Consumer Debt Study overwhelmingly used a Consumer Proposal to legally consolidate and cut their debt (81% of study respondents), and over 90% of all individuals surveyed said they were satisfied with their decision to eliminate their debts with an insolvency process.

More people than ever before are choosing to use a Consumer Proposal to consolidate and cut their debt, rather than file for bankruptcy. 

Learn More About Consumer Proposals

Getting Debt Help – Where Consumers Can Get Qualified Support

Blair Mantin, President of Sands & Associates, says that, unfortunately, it can be frustrating and discouraging for consumers who attempt to self-manage their debt for too long, and that overwhelmed consumers are highly vulnerable to inferior, unregulated, and even illegal services sold by debt settlement agents or debt advisors.

• Consumers are encouraged to get impartial and accurate advice from a Licensed Insolvency Trustee at the onset of a debt problem.
  • Licensed Insolvency Trustees are Canada’s only established debt help professionals and are fully regulated, qualified, and endorsed to serve Canadians with a range of debt management services and advice.
  • You do not need to be dealing with an extreme situation to seek support from a Licensed Insolvency Trustee, and consumers can get free, confidential advice at any point.
• Connect directly with a local Licensed Insolvency Trustee to better understand your situation, get accurate information, and explore all possible options in a free, confidential debt consultation.
  • No referral, payments, or third-party agents are necessary. 

Non-judgmental debt support for individuals and a full suite of debt help services is available to you. Connect with a caring local debt expert by phone, video, or in-person – book your free, confidential consultation today.

The post New BC Study Explores Personal Debt Problems in the Province appeared first on Sands & Associates.

Read on to learn some of the ways being debt-free can change your life, and hear some expert tips to help you get there faster. As Canada’s only licensed debt experts, Licensed Insolvency Trustees help people every day who are looking for debt solutions, and we see many positive changes in our clients once they make the decision to take back control of their debt.

How Is Life Different, Debt-Free?

People often say that knowing what they do now, they wish they hadn’t waited so long to take charge and get help with their debt. Money isn’t the only thing that improves when you’re debt-free – your overall wellbeing can benefit too, including:

• The weight of debt-stress and worries or anxieties about your debt is lifted.
• You can stop feeling as though you are being controlled by your debt payments or creditors.
• Having dealt with your debt for good allows you to stop holding space for the debt and instead have space for your future, in your thoughts, plans and finances.
  • It’s almost impossible to think about your future goals when you’re juggling the financial pressures of daily life plus trying to manage high debt payments.
  • Taking debt out of the equation when you’re budgeting can hugely improve your cash-flow and make goals feel a lot more attainable.
  • Picture what even an extra few (if not several!) hundred dollars could do for you a month.
    • 30% of clients previously polled said being debt had previously caused them to put life events on hold.

Facing overwhelming debt can impact people in many negative ways, affecting our physical, emotional, and mental health, and even our relationships with other – and it can be very difficult to see there is light at the end of the tunnel when you’re weighed down by present challenges, or past misconceptions or self-blame.

Dealing With Debt

Your debt and the situations that may have caused it do not define you and are often due to circumstances or events outside your personal control. Money problems can happen to anyone at any time, regardless of your personal finances or financial literacy and money skills.

Many people “do all the right things” and still end up struggling financially, needing help to get out of debt – there is no shame in asking for help, you owe it to yourself.

You do have a future, and you are deserving of a fresh start, with life free from debt and its overwhelming stress. Please know that you are not alone – there are many other people facing similar challenges, and better still, there are solutions and professionals here to help you.

Debt Help Services for BC Consumers

Licensed Insolvency Trustees are Canada’s only debt help practitioners who are regulated and endorsed by the federal government to provide debt help. Sands & Associates is BC’s largest firm of Licensed Insolvency Trustees focused exclusively on debt management services and support for consumers and we offer our full suite of services in-person and online for residents across BC.

• At Sands & Associates it’s important to provide our expertise and advice in a way that’s clear and actionable, and to treat people with kindness, respect, and empathy always. We appreciate that it can feel overwhelming or intimidating asking for help, especially with such a personal issue.

8 Things Canadians Should Know About Debt Relief Services

Whether you know you have a debt problem or you’re hoping to find more effective ways of paying off debt, the best place to turn for debt advice is a Licensed Insolvency Trustee. Working with a Licensed Insolvency Trustee you can count on having a free, confidential consultation where you can get accurate professional advice, and an impartial representative that will help you weigh your full range of options. No referral or special qualifiers are needed – you can simply call or connect directly.

Consumer Proposals are Canada’s number one alternative to bankruptcy and can have many advantages over other solutions like consolidation loans and credit counselling programs. For example:

• The dual advantage of cutting debt and stopping interest makes the monthly payments in a Consumer Proposal often the lowest among debt management options.
• You’ll gain breathing room and legal protection from your creditors.
• With personal one-on-one financial counselling included in the process, you’ll have the opportunity to gain more confidence in financial literacy skills, improving your ability to control and manage your daily financial affairs, as well as gaining a better understanding credit and borrowing.
  • Many people also say they are more open in discussing money matters and even sharing their financial skills and knowledge with others after their experience working with a Licensed Insolvency Trustee.

We help with debt so you can move forward with your life; whether you need a total financial fresh start, debt forgiveness and creditor protection, or reorganization and structure to pay off your debt – we’re here for you.

Ready to get working on your debt-free future? Connect with a caring local Sands & Associates debt expert.

The post The Debt-Free Difference appeared first on Sands & Associates.

Read on to learn about the credit counselling and financial literacy resources available to individuals working with a Licensed Insolvency Trustee on a personalized debt-free plan.

Goals of Financial Counselling Sessions with a Qualified Insolvency Counsellor 

Licensed Insolvency Trustees help people deal with their debt, and if you’ve decided to work with a Licensed Insolvency Trustee on a debt solution like a Consumer Proposal (a special type of debt consolidation) or personal bankruptcy (a legal debt forgiveness solution), you’ll complete two one-on-one financial counselling sessions as part of either insolvency process – and there is no added cost to you for this service.

The “Insolvency Counselling Program” is intended to help people boost their financial literacy, gaining confidence in their ability to manage their personal finances, and provide tools and resources for ongoing future success in money matters. After completing a Consumer Proposal, or exiting personal bankruptcy, people have a financial fresh start and can move forward with their lives – debt-free.

Who is a Qualified Insolvency Counsellor?

The Licensed Insolvency Trustee who is ultimately responsible for your Consumer Proposal, bankruptcy, and related counselling sessions may lead your counselling sessions themself, but most often these private, one-on-one sessions are led by a Qualified Insolvency Counsellor who works closely alongside your Licensed Insolvency Trustee. This is a registered professional financial counsellor who has:

• Successfully completed a practical course for this unique type of counselling.
• Proven to and been registered by your Licensed Insolvency Trustee as possessing the necessary training, experience, knowledge, skills, and competencies to lead insolvency counselling.
• Completed ongoing professional development training every two years.
• Demonstrated that they are of good character.

Quality of care and service is of the utmost importance in these matters, and your Licensed Insolvency Trustee cannot register anyone as a Qualified Insolvency Counsellor who is involved with activities that may be a potential conflict of interest, or could potentially negatively impact the people they are counselling.

4 Questions to Ask When Choosing a Credit Counsellor

Financial Counselling Topics – Stage 1: Budgeting and Planning

Your first confidential counselling session with a Qualified Insolvency Counsellor will usually take place shortly after you file your Consumer Proposal or declare bankruptcy (somewhere between ten and 90 days), and this one-on-one session might be done in-person, or remotely via videoconference (or over the phone).

Budgeting is the focus of this conversation, and the goal here is that you’ll come away with information and support to help you create and maintain a functional household budget realistic for your personal situation.

• A balanced budget is an important financial tool, and every consumer should have one. Budgeting isn’t about restricting what you can and can’t do, it’s about making confident and thoughtful decisions about how you will use your income.
• No two situations are the same, and it’s important to consider and strategize the different components of your budget to find what works best for you and your household.
• In a Consumer Proposal your debt will be combined then cut into one consolidated (usually) monthly payment, (or in a bankruptcy most people pay a minimal administration fee), and this is typically a substantial reduction from the multiple payments you may have previously been trying to manage in your budget.

How Much Debt will a Consumer Proposal Eliminate? Learn More

This first financial counselling session is a great opportunity to work with a professional to fine-tune your new spending and saving plans, and maybe even learn some new tips and best practices. Your Counsellor will plan to review your budget together with you, and offer support such as:

• Mapping out a plan for record-keeping, and how you will track and check-in and evaluate your estimated VS actual income, expenses, and general budgeting in future.
• Developing strategies to adjust your budget, and for managing unexpected changes to your budget or impacts to your income.
• Addressing any other circumstances or financial difficulties you may want extra guidance on or support / resources for.

Financial skills take time for everyone to learn, and there are often some trials and errors along the way. Once you’ve got a solid understanding, you’ll be in that much better a position to make well-informed and confident decisions about money matters that impact you and your family.

Consolidating Debt with a Consumer Proposal: Step-by-Step

• As well as these two credit counselling sessions that are done as part of completing your Consumer Proposal or bankruptcy, there is an optional self-directed online learning program available to help you get the most out of this opportunity for individual learning and support.
• The online modules offer an introduction to the topics that will be covered in depth during these private sessions, and if you’re able to become comfortable with some of these materials before your sessions, you’ll have more time for tailored resources and support with your Counsellor.

Financial Counselling Topics – Stage 2: Goals, Spending and Credit 

Your second one-on-one session with a Qualified Insolvency Counsellor is done at least 30 days after the first, and again may be done in-person, or remotely. While the first session was all about budgeting stages, strategies, and tools, this second session focuses on your future planning and providing you support to continue moving forward with (debt-free!) success.

Your Counsellor will check in with you about how you’re doing with your Consumer Proposal (or bankruptcy), your new budget, and together you’ll review several other key financial literacy topics, which include:

• Financial goal setting
  • Why, and how to set SMART (specific, measurable, achievable, relevant, time-bound) goals.
  • Specific support in creating a plan to achieve these goals.
  • Strategies to help you meet your spending and savings goals.
  • Identifying, avoiding, and mitigating potential financial risks that could get in the way of your future financial success.
• Spending habits
  • Practical ways to prioritize spending, and spending systems.
• Using and managing credit as a tool
  • Best practices for using credit well.
  • Considerations and questions to ask lenders before borrowing.
  • Breaking down and comparing the costs of borrowing.
  • Types of credit that are considered high-risk.
• Understanding credit scores and reports
  • Establishing a responsible credit history and habits.
  • How and when to check your credit history reports.
  • Steps you will want to take after your Consumer Proposal (or bankruptcy) is complete.

A lot of people worry they have no way to get out of debt – or that by working with a Licensed Insolvency Trustee they may compromise their future financial goals or ability to get credit in future, but the reality is that with options like Consumer Proposals, or even bankruptcy, most people are able to get to debt-free much sooner than if they were to continue trying to chip away at their debt on their own.

The financial fresh start of these processes allows individuals a means to take back control of their finances and make the most of their income. Without the constant nag and weight of burdensome debt, not only to personal finances, but wellbeing, there is much more space to look to the future with optimism.

Meet some of the people whose lives have been changed working with Sands & Associates

More About Debt Help Services from BC Licensed Insolvency Trustees 

Getting confidential debt advice from a qualified expert couldn’t be easier – simply reach out and contact a Licensed Insolvency Trustee local to your area. All Licensed Insolvency Trustees offer a free confidential consultation where you’ll have opportunity to better understand your situation and explore ALL your options.

Sands & Associates serves all of BC and offers our full suite of debt help services in person at local offices throughout the province, as well as over the phone or video conferencing.

• Take an hour and talk with a Licensed Insolvency Trustee; we can give you a debt-free plan that works for you and your unique situation, and, as Canada’s only appointed debt help professionals, offer you additional resources and insights you may not otherwise be aware of.
• No referral is necessary to connect with a Licensed Insolvency Trustee. If you are asked to pay any referral fee this should be a warning you are not talking with a Licensed Insolvency Trustee.

You Are Not Alone in Dealing with Debt – We Are Here to Help You 

You do not need to be behind in your debt payments to seek professional debt solutions or use a Consumer Proposal to consolidate your debt. In fact, many people we work with have never missed a payment and hold a good credit rating, but realize that at their current rate of repayment, they will be facing years or decades of debt payments.

If, however, you are dealing with a serious or urgent financial issue such as a creditor who is threatening you with legal action for a debt, or already garnishing your wages, we can work with you to quickly implement a solution that will stop these collections immediately.

Learn More About Wage Garnishment

Some questions or concerns we commonly address include (but are certainly not limited to):

• Debts are generally worrying you, or your household is being negatively impacted by debt.
• Your monthly debt payments aren’t enough to pay off your (non-mortgage) debt within five years.
• Ways to consolidate and/or cut debt.
• What options exist to deal with a specific creditor or whether a debt is collectable?
• How you can get debt relief or forgiveness by your creditors.

You don’t have to try to interpret all your rights and remedies to deal with your debt, a Licensed Insolvency Trustee is your go-to resource, and we provide safe accurate advice and information to consumers every day.

Many people feel embarrassed about their financial situation, or worried about being judged or even scolded about having difficulty managing their debt; please, know that Sands & Associates is a judgment-free zone.

We believe that a money problem can happen to anyone at any time, and that everyone deserves the opportunity for help and a financial fresh start to move forward and live their best life! You owe it to yourself to get debt help, and we are here for you.

Connect with local debt experts who care – book your free, confidential debt consultation with Sands & Associates today.

The post Financial and Credit Counselling with a Qualified Insolvency Counsellor appeared first on Sands & Associates.

Watch the clip here, and read more below:

What is a Reasonable Amount of Personal Debt?

There’s no ‘magic number’ when it comes to understanding how much debt is too much; for some people their debt problem shows up as $20,000, for another $5,000 – or even $100,000 for someone else – and much depends on each person’s unique situation.

Rather than relying on a specific number, consider not just your ‘on paper’ finances, but also how well you are coping with managing your debt and whether you are making clear progress towards paying your debts off.

If you are experiencing any of the following, consider this a sign your debt may be reaching a problem stage, or is potentially on its way to an urgent crisis:

• Often feeling stressed or worried about your debt.
• Making only (or slightly more than) minimum monthly payments on your credit card debt.
• Carrying debts with payments that use up a large portion of your regular income or that would take more than five years to pay off (non-mortgage debt).
• Regularly relying on credit cards (or using payday loans) to meet costs of living, or taking on more debt. (This could be increasing credit limits or considering a consolidation loan to manage debt.)
• Owing a government creditor such as Canada Revenue Agency a balance you can’t afford to pay off.
• Having multiple years of unfiled tax returns, especially if you are self-employed.
• Uncertainty as to who you owe debt to and how much is owed or just avoiding account balances altogether.
• Having borrowed against most of your home equity to consolidate or manage debts.
• Receiving collection action, including calls, wage garnishments or pending court dates.

Debt can snowball over time and because people get used to adapting to cope and manage the situation, dealing with a debt problem daily can all too easily start to feel ‘normal’. It’s important for each of us to do a financial check-in periodically and be honest in how we’re doing.

Identifying and cutting off a debt problem before it’s severe can save you untold amounts of time, stress – and of course money! Take an hour to connect with a Licensed Insolvency Trustee and get some qualified advice about managing your debt, and a personalized debt-free plan.

Debt Options Calculator – Compare Four Ways to Pay Off Your Debt

I Think I Have a Debt Problem – What Should I Do?

The first thing to understand is that if you think you have a debt problem – you’re almost always right. And if this is the case, the second thing to know is that the problem is almost always going to get worse if you don’t take some action.

Talking with a local Licensed Insolvency Trustee in your province is the first and best thing to do.

• Avoid trying to ignore the problem, or assuming you don’t qualify for help.
  • Consumers can access a Licensed Insolvency Trustee directly for support any time at no cost, there are no eligibility requirements to seek advice.
• Be cautious about where else you seek debt advice. Licensed Insolvency Trustees are the only government-qualified debt help professionals.
  • Advertisements from debt consultants and credit counsellors can be misleading and may imply a company is part of a ‘government program’, which is not the case. The only ‘government programs’ to deal with debt are those accessible by working with a Licensed Insolvency Trustee.
  • Be on guard for high-pressure sales tactics, up-front fees, high-interest loans, and unrealistic promises.

Talking with a Licensed Insolvency Trustee

Every day Licensed Insolvency Trustees provide advice to people who are dealing with problem debt or looking to pay off their debt with less interest and/or in less time.

• There is no cost to talk confidentially with a Licensed Insolvency Trustee and get guidance on the options available to you.

When you connect with a Licensed Insolvency Trustee it is our responsibility to ensure you are aware of and understand all your options. We help people make informed decisions on how to address their financial difficulties and move forward. We’ll review potential solutions such as:

• Credit counselling programs, and negotiating directly with your creditors.
• Consolidation loans, and consolidation without borrowing using a Consumer Proposal.
• Bankruptcy, and other laws or resources that may help you resolve your situation.

Many people have a difficult time asking for help or feel embarrassed or ashamed to be struggling with their finances. Please know, you owe it to yourself to get debt help and you are not alone. Licensed Insolvency Trustees are your best allies – here for you with solutions and support, not judgment.

What would your life look like, without debt? Take an hour to learn about your options and get a debt-free plan that’s right for you. Book your free, confidential consultation with a non-judgmental expert at Sands & Associates.

The post How Much Debt is Too Much? appeared first on Sands & Associates.

There’s a lot to consider when you are deciding who best to help you with your debt. This decision is of course on top of any financial stress you’re coping with, and hesitations you might have in talking openly about your financial situation to someone who is essentially a stranger. Before speaking with any credit counsellors or debt agents, you should understand the main differences in debt services, and key questions to ask before proceeding with any debt management or restructuring plans.

Types of Debt Help Professionals in Canada

Although credit counselling and similar services may be offered under many different names, here’s an overview of the main three types of professionals offering debt help to consumers in Canada: 

Licensed Insolvency Trustees

Licensed Insolvency Trustees are Canada’s only federally regulated debt help professionals, fully qualified and endorsed to provide debt advice and services to consumers.

• A Licensed Insolvency Trustee can provide you unbiased help in understanding and weighing a full range of options to deal with your debt, work with you on specialized legal debt solutions, and manage communications with virtually all creditors on your behalf. 

Credit Counsellors

In Canada credit counselling agencies may be private companies or non-profit organizations. Legally there is no specific training or education required to call yourself a credit counsellor or perform credit counselling services.

• Credit counsellors typically offer debt services such as: informal plans or programs where, for a fee, you can get help managing eligible debts, private financial coaching, resources around budgeting and managing your money. 

Debt Consultants

Debt consultants operate under many different titles in Canada and may work as individual agents or part of a for-profit company. Like credit counsellors, they are not legally required to have any specific training or qualifications.

• The main service most debt consultants offer is to negotiate a lump-sum payment to settle your individual debts for less than you owe. If you’re willing to pay their fees they may offer this service (which may be called debt settlement, debt pooling or similar) with eligible creditors.

Questions to Ask Your Credit Counsellor About Their Services and Plans

Asking the following key questions will help you better understand how any debt repayment plan you’re considering will work for you and your specific situation. Particularly when it comes to informal options such as credit counselling and debt pooling, many people find that with the limitations and uncertainties of these services, they don’t meet all their needs.

1. What Training or Licensing Do They Have?

You want to be sure that any advice you receive is from someone knowledgeable about Canadian credit and debt.

Since only Licensed Insolvency Trustees hold an official government-qualified designation as debt help professionals, any training and certification credit counsellors or debt consultants have will be through self-regulated organizations which may vary significantly in quality and rigor. In addition, since there are no legally required training programs, many people operating as credit counsellors or debt consultants may not have any formal training at all!

At minimum you should ensure that anyone you consider working with has:

• A good standing with a legitimate provincial or national credit counselling association.
• Registered with Consumer Protection BC.
  • Anyone who charges a fee to act for or represent you to your creditors must be licensed with Consumer Protection BC.
  • Licensed Insolvency Trustees are exempt from this requirement because they hold a specific, Federally regulated, legal standing and designation.

2. How Will They Be Paid for Their Credit Counselling (or Other) Services?

It should never cost you money to discuss your debt options or have a consultation, but there will be costs if you decide to go forward with any type of financial restructuring plan.

Always be clear on what your monthly payments will get you, what out-of-pocket costs you will be charged, and whether you are expected to pay upfront fees before any work will be done on your behalf. Here are a few examples of the different types of payments you could encounter:

• With some credit counsellors you will be expected to pay for monthly monitoring, consulting fees and other levies in addition to what you are expected to pay for the debt repayment amount.
  • Not-for-profit credit counsellors charge administrative fees when you use their repayment programs, on top of what you pay to your creditors.
  • In addition to charging you administration fees, some credit counsellors also get a percentage of the debt they recover paid to them by your creditors.
• In a debt repayment plan lasting 90 days or more, a debt consultant in BC may charge fees as much as 15% of the gross debt amount you are repaying, plus a one-time charge equal to the average monthly payment being made to an individual creditor.
  • Many debt consultants also tack on additional referral and consulting fees.
• Working with a Licensed Insolvency Trustee, in a Consumer Proposal all administration costs are included, so the payment amount you offer to your creditors is all you pay.

How Much Debt Will a Consumer Proposal Eliminate? Learn More

3. Will Creditors Work with Them?

Before committing to any plan or repayment program, be sure it will cover all the debts for which you need help. For example, government debts including income tax debt, student loans, or CERB overpayments can only be managed (and reduced, or forgiven completely) by working with a Licensed Insolvency Trustee.

It’s also important to find out what will happen if any creditors are not in agreement with the repayment plan you propose. Here are some key differences to consider:

• In a Consumer Proposal, acceptance by 50% (by dollar value) of your creditors means that all creditors are bound to your offer, and you are legally protected. Once accepted by this simple majority of your debts, creditors cannot change their mind or choose not to participate.
• With a credit counselling plan, you must separately repay creditors who do not agree to (or are ineligible for) your plan.
• A creditor who doesn’t accept a debt settlement offer through a debt consultant will need to be repaid in full, and you may still be asked to pay the consultant’s fees even if they weren’t able to successfully make a deal on your behalf.

4. What Can You Do if You Have a Dispute? 

Many people find out too late that there are few measures to keep debt consultants and credit counsellors in check. With debt repayment agents there is no federal regulatory body, no complaints or dispute processes, but there are some provincial regulations in BC that provide basic standards for licensing conditions and fee guidelines.

• BC’s debt collection and repayment regulation requires that collectors and debt repayment agents have a license to conduct business in BC, and Consumer Protection BC oversees this licensing.
• Most consumers have little recourse if there is a dispute; however, and if you choose to work with an agent outside the province (or outside Canada), you may have virtually no resources to appeal to.

Licensed Insolvency Trustees though, are overseen and regulated by the Federal Government, and there are built-in safeguards for consumers at the highest levels possible.

• The Office of the Superintendent of Bankruptcy (part of Industry Canada) is the government branch in charge of qualifying and overseeing Licensed Insolvency Trustees, and there are procedures in place for regular compliance checks, and addressing dispute or requests for mediation.

There are many factors to consider when it comes to credit counselling solutions, and these are only a few of the questions you may need to ask. You should only move forward once you have a clear, confident understanding of your options.

Learn About Your Options for Debt Forgiveness in Canada

What You Should Ask Yourself About Credit Counselling and Other Debt Solutions 

It’s important to keep your specific situation and needs in mind, so before you sign consider:

• Will I be saving money once I add in the fees and/or program costs?
• Which of my debts will this solution cover?
• Do I need (or want) protection from any of my creditors?
• Can I consistently afford the required monthly payments?
• What do I have to do throughout the process?
• Do I fully understand all the ins and outs?
• Am I feeling pressured or “sold” something that I am uncomfortable with?

Sands & Associates works with consumers across BC, and we pride ourselves on our empathetic and non-judgmental approach to helping people, understanding that in addition to the financial strains, there are many emotional layers to dealing with a debt problem.

Learn about your options and choose the debt-free plan that’s right for you. Get started with a free, confidential debt consultation – telephone, online and in-person services are available across BC.

The post 4 Questions to Ask When Choosing a Credit Counsellor appeared first on Sands & Associates.

Watch the clip here and read on to learn more expert advice for dealing with personal debt:

Why is it Important to Get Out of Debt?

Debt can cause a real strain, financially and to our personal selves. Here are a few key reasons why clearing your debt is important:

Debt-Stress is Real Stress

Licensed Insolvency Trustees work every day with people who are looking for support in dealing with their debt and express how overwhelming their debt-stress is. BC Consumer Debt Studies have consistently found that the impacts of debt can be considerable, including causing individuals to:

• Constantly worry about their debt.
• Have degraded self-esteem.
• Feel alienated and alone, even straining family and other important relationships.
• Experience health impacts, including anxiety, depression, sleeping poorly, heart problems and more.

The emotional toll of debt – overwhelming stress – was how almost 7 in 10 people polled in a recent BC Consumer Debt Study said they knew their debts were becoming a problem.

Debt is Expensive – for You and Your Future-Self

• Day-to-day costs of living are high as it is, and any time you carry a balance on credit that comes with costs too (interest charges, financing fees and more) – making debt outright unaffordable, especially if it becomes long-term.
• What’s more, the funds going towards the cost of your debt are taking money away from your future self, hindering your ability to save – and make the best use of your future income.
  • Think of all the different ways you could use even a few extra hundred dollars a month now!
• Many people also express feeling as though being in debt hindered them from pursuing milestones like starting a family or purchasing a home.

Can I Get a Mortgage After a Bankruptcy or a Consumer Proposal?

Getting Debt Under Control

Once your debt is under control this can help you to:

• Stop the nagging thoughts about debt and remove the strain this worry may be causing to your peace of mind, physical health, and relationships.
• Have space to enjoy more of what you want (to do or to have), without feeling guilty.
• Focus on the future and other financial wants, needs and goals.

Tips for Making Your Debt-Free Plan Work

To have a successful debt-free plan you need to make sure your monthly payments are manageable, and that they will allow you to make progress in your final goal of being debt-free – consider the following:

Get Your Budget Onboard

Budgeting isn’t about restricting yourself – it’s about being in control of your money, prioritizing and decision-making. Your budget doesn’t have to be complicated to work well either.

• Start by mapping out your income and where/how it’s going to be spent, then keep close track on where it’s actually spent so you can compare planned VS actual and adjust your plans from there.

Is a Consumer Proposal Right for Me?

Avoid the Minimum Payment Trap

To make progress paying off debt you have to pay more than the minimum required payment each month, since most of that payment simply services interest charges. If you can only afford to pay the required minimum monthly payment (or close to it), this is a warning sign of a debt problem.

• Seeing your debt balances remain almost the same every month despite making payments – and accumulating more debt on credit accounts are two other common signs of debt trouble.
• Look for the “minimum payment warning” on your monthly credit card statement to see how long it will take you to fully repay your balance if only minimum payments are made each month.

Ideally you want to plan to have your (non-mortgage) debts paid off in five years or less, but you need to be realistic in how much you can pay each month, otherwise you may just end up in a constant borrow-repay-borrow cycle to meet your daily living expenses.

It’s important to understand that You Have Options!

• Connect with a BC Licensed Insolvency Trustee to explore solutions that can help you, including debt repayment plans that don’t require ongoing interest or financing fees, and other benefits like protection for your income and assets.

Don’t Procrastinate Seeking Debt Help

Many people put off seeking professional debt help because they feel heavy responsibility for their debts or embarrassment or shame reaching out for help. We understand it can feel difficult to take the first step of talking to someone about your personal financial matters.

You Owe it to Yourself to Get Debt Help

As much as you value your financial commitments, you and your wellness are invaluable and irreplaceable. If debt-stress feels ‘normal’ stop and take a closer look at your situation. Many people don’t realize they are stuck or going further in debt because they keep their accounts paid up or have a high credit score.

Whether you already know debt is affecting you, or you want to find out about options to get better organized and future-focused, connect with a Licensed Insolvency Trustee for qualified support in understanding your situation, and a debt-free plan that works for you.

You deserve support and to live your best life, free from the overwhelming stress of debt.

For non-judgmental advice and a plan to be debt-free, book your free, confidential debt consultation with a caring Sands & Associates expert today.

The post Expert Debt Advice for a Debt-Free Plan appeared first on Sands & Associates.

The Problem with Credit Card Debt

Any debt can turn into a problem, but credit card debt in particular is often particularly troublesome. In recent studies of our client base published in the BC Consumer Debt Study credit card debt has in fact been called out as a client’s main debt concern five times more than other types of problem debt by insolvent consumers.

Not only do many people regularly use this type of revolving credit for day-to-day purchases, where there’s an immediate need to bridge the gap between cost of living expenses and income (even just between paydays) or cover an unplanned cost, credit cards are often seen as quick, easy solution.

• Consider, if you faced a sudden drop of income even just for two or three months – how would you pay your bills and household costs?
• Debt problems commonly start or are aggravated by things outside a person’s immediate control. A job disruption in your household, a marital breakdown, an illness – those are just a few examples of challenges that can have a devastating financial ripple effect.

The major issue with credit cards is that every time you don’t pay your balance in full by the due date you are going to be charged interest. Even for a small balance, the interest means the cost of everything you’ve purchased has increased.

Is My Credit Card Debt a Problem?

If you regularly carry a credit card balance, here are some warning signs that your credit card debt is (or is becoming) a problem that you should address immediately:

• You’re carrying a balance month after month on your credit card
• You use your credit card for cash advances
• You can’t get through the month without relying on your credit card
• Your balance keeps getting bigger (especially if you’re making payments at the same time)
• You only make the minimum payment required, or just slightly more than
• You’re close to hitting your credit limit
• You are also using payday or ‘fast cash’ instalment loans
• You’re generally feeling stressed about your credit card balances

Read More Signs You Should Deal with Your Personal Debt – Now

Strategies to Control Credit Card Debt

There are a few plans to consider if you want to try a DIY (“do-it-yourself”) approach to managing your credit card bills. However, if you’re struggling to make your payments or have to use credit to get your bills paid, connect with a Licensed Insolvency Trustee right away – a DIY solution is likely to prolong or even aggravate the problem.

Choose a Card to Pay Off First

One place to start with a self-directed plan it to make a list of all your current debts and balances, then decide what makes sense to pay off first. You would make the minimum required payments on all your debts and use extra money (as allocated in your budget) to pay down the account you’ve chosen. Once it’s paid off, move your extra payments to the next, and so on.

You might choose based on one of the following:

• Pay off your debt with the highest interest first, so you’re mitigating the accumulating interest costs
• Pay off your debt with the lowest balance first, to build momentum and keep motivated (though this may cost more in accumulated interest over time)

You may also want to take additional measures such as:

• Using a secured credit card instead of a regular credit card
• Implementing a cash-only spending rule for yourself
• Talking with your creditors to inquire about lowering your interest rate
• Creating a schedule for paying back money you may owe to family or friends
• Closing credit accounts as they are paid off

How to Better Manage Credit and Debt, and Mistakes Not to Make

As you tackle your credit card debt it’s important to think about how it accumulated in the first place so you can take steps to prevent the same thing happening again (where possible):

• Are you overspending because your budget isn’t aligned to your actual income and expenses? In which case you’ll want to invest some time sorting out your budget (being sure to account for funds to pay off your credit cards) and regularly tracking your incoming/outgoing money.
• Making sure your budget is in check and controlling spending will be a key step in any strategy to getting – and keeping – your credit cards paid off.

Refinance Credit Card Balances

Some people may consider applying for consolidation loans to pay off multiple debts under one combined monthly payment. This may be helpful in organizing your debt, and can assist you in paying it off if:

• You can get a loan with an interest rate better than you’re currently being charged on the debts you’re consolidating
• The loan’s monthly payment is lower than your current combined monthly payments
• All (or most of) the debts you owe can be covered in the consolidation
• You can avoid accumulating new debt (through the credit you’ve freed up or otherwise)

Whether you are interested in a loan, balance transfer, line of credit or other borrowing product, you need to be careful to fully understand the terms and what is needed for you to have it paid off.

Try the ‘Rule of 60’ Math

Qualifying for borrowing, being able to afford your payments, staying motivated, having your budget disrupted by outside factors, and staying ahead of accumulating interest can all make paying off your debt difficult when you’re refinancing or using a self-directed repayment plan.

One easy way to spot potential challenges is doing a quick ‘Rule of 60’ calculation: Add up your total (non-mortgage) debt then divide by 60.

• Is the result a monthly payment you could consistently afford to have your debt paid off in five years (60 months)?
• If not, or you feel payments may not be sustainable, a plan such as a Consumer Proposal that has a debt reduction component may be good debt solution to consider. Connect with a Licensed Insolvency Trustee in your province to explore your options in a free confidential consultation and work out a detailed plan that’s right for you.

For many people a Consumer Proposal offers a secure and affordable way to pay off their credit cards and other debts for good.

Learn More About Why Borrowing Isn’t Always Best for Consolidating Debt

Consolidate and Cut Credit Card Debt with a Consumer Proposal

If you can afford a partial payment on your credit card debt AND want a boost in getting to debt-free with less cost or time, a Consumer Proposal is a unique and powerful debt solution you can access by working with a Licensed Insolvency Trustee. Here’s how it works:

Consolidate virtually all your debts totalling up to $250,000 in a Consumer Proposal, a non-borrowing option that will offer your creditors repayment of only the portion of your debt that you can afford to repay.

• Most people offer a monthly payment for a set period (of up to five years), which you’ll make to your Trustee who will then send those payments on to your creditors.
  • Your creditors will agree to write-off the unpaid balance. Total debts can often be reduced from up to 50-80%.
• Almost every type of debt can be included in a Consumer Proposal – from credit cards to income taxes, payday loans to student loans and beyond.
  • You also have the option to keep up financing arrangements for secured debts like your vehicle loan or mortgage.
• There is no borrowing, credit check, or co-signer required to do a Consumer Proposal and your creditors will not be allowed to continue charging you interest (or any collection actions either).
  • No added fees or hidden costs. All you pay is what you’re offering to your creditors.
• Monthly payments are usually substantially lower than bank-based consolidation that requires you to pay all your debts in full with interest – and lower than credit counselling plans that charge fees for services (yes, even non-profit plans) and still require you to repay 100% of your debt, with an interest-freeze on certain debts.

Consumer Proposal Example: You owe $40,000 total in credit cards and other debts and offer your creditors $9,600, paid by way of $200/month for 48 months – cutting your debt over 75%, with a clear date as to when you’ll be debt-free. You can also pay off your Proposal early any time, without penalty.

Preparing for Your Debt Consultation with Sands & Associates

Free Professional Debt Advice

It’s important to get accurate advice and debt services provided by a qualified professional. When you work with a Licensed Insolvency Trustee you can be confident you are dealing with the professional best equipped to help you get out of debt.

Licensed Insolvency Trustees are the only Federally regulated professionals who offer debt management advice and services to consumers. We help people evaluate their financial situation, understand their current and future needs, and explore ways to pay off their debt and ultimately achieve their goals.

The thought of speaking with a professional of any kind about your financial situation can feel intimidating for many people, and we understand that opening up to someone who is essentially a stranger might feel uncomfortable at first.

Sands & Associates offers a non-judgmental and supportive approach to helping people with debt.

• We believe that a debt problem can happen to anyone and that everyone to deserves to be treated with dignity and respect.
• We aim to make our full suite of debt help services accessible for people across BC, with options for in-person or online services – whatever is most comfortable and convenient for you!

There is no cost to connect with one of our qualified BC debt help experts to talk about your situation and find out about your options – knowing is not owing.

Get the debt-free plan that’s right for you. Connect with a friendly, non-judgmental expert from Sands & Associates, book your free confidential debt consultation today.

The post Ways to Deal with Credit Card Debt appeared first on Sands & Associates.

Read on to learn more about why prioritizing a debt management plan is important for both financial benefits and for our overall personal wellbeing, and some expert tips on how you can get out of debt faster.

4 Reasons to Get Out of Debt Now

Whether you need inspiration for action, or motivation to keep going – here are some key reasons why focusing on addressing debt should be a high-priority goal for almost everyone:

1. Debt is Expensive

Any time you carry a balance on credit there’s going to be a cost, and when you factor in interest charges, financing fees and more, debt can become outright unaffordable (especially in the long-term).

What’s more, when you owe money it can feel as though your creditors are in charge of your financial wellbeing since you can be impacted by interest rate hikes, policy changes, or even have your rates bumped-up if you miss a payment.

Debt gets particularly expensive if you’re carrying balances from:

• Credit cards
  • Be especially aware of the added expense of using cash advances and/or enrolling in balance protection insurance.
• Payday loans
  • A 2-week payday loan can equate an annual percentage (interest) rate of almost 400%!
• Canada Revenue Agency debt
  • Daily compounding interest plus penalties can add up fast on things like outstanding tax debt.

Learn About Solutions to Deal with Government Debt

2. Maximize your Income

Borrowing means taking money away from your future self, and carrying debt prevents you making the most of your income. Think of all the different uses you could have for your money that is unfortunately going to pay even a few hundred dollars’ credit card balance each month.

Unpaid balances (especially on credit cards) can lead to everything from tight budgets to seriously strained challenges in meeting costs of living, and the claim on your future earnings might stop you from moving towards other goals that would require that cash commitment (like investing in retraining or education or saving for a home or retirement).

3. Improve your Credit Score

Although many debt experts caution that your credit score shouldn’t be your major focus, if you have a future financial goal such as getting a mortgage in the next few years, it is worth noting the benefit of being debt-free as it relates to your medium-term financial plans.

Clearing your debt can make it easier to borrow for important things you want – and can enable you to do so at “best” interest rates and terms. Being debt-free helps by:

• Freeing up your ‘credit utilization’ ratio (essentially the proportion of your credit limit you are regularly using – lower is better).
• Giving you the time and ability to boost savings.
  • Although savings aren’t reflected in your credit score, having sizable savings can certainly improve a lender’s consideration when you apply for credit.

Remember, your credit history is regularly updated and scores are simply calculations at a moment in time that can change dramatically in a relatively short period. Credit scoring is not an exact science nor reliable as a measure of financial health – and sometimes what can lower your score temporarily is a beneficial strategy in the long term.

Why are Credit Ratings the Wrong Indicator of Financial Health? Learn More

4. Stop Debt-Stress

Whether you’ve experienced a cash-crunch moment or regularly have finances on your mind, being in debt can create a near-constant undertow of anxiety and/or worry; money matters can impact us tremendously, financially, emotionally, even physically. Getting to debt-free can help us to:

• Stop constantly thinking about debt, improving peace of mind and even our overall health and relationships with others.
• Allow us space to enjoy and get more of the things we want (whether to do or to have), without accompanying guilt.
• End debt-stress and the mental nag of monthly payments.

When Isn’t Paying Off Debt a Priority?

There are of course exceptions to every rule, and there may be a (very) few instances where a person would want to continue making their debt payments but focus some of their extra cash into other areas, even temporarily.

This strategy may be the case in scenarios such as where:

• Your debt is essentially down to just your mortgage and you need to focus on retirement funds.
• Where the interest rate on your debt is very low and you have no emergency savings.

Save Money or Pay Down Debt?

Having savings is important – and at minimum we recommend consumers should generally aim to at least have a modest emergency fund set aside. Without even a small cushion of savings many people end up relying on credit to cover unexpected costs that inevitably come up.

• Start small – if you can – even having $1,000 in savings can make a difference in a cash-crunch (car repair, dental emergency, unexpected day off work, etc).

Unfortunately, having a surplus cash-flow that allows you to even temporarily set money aside to accumulate savings can be almost (if not completely) out of reach for some people. If you’re in a situation where your debt payments are leaving you straining to meet your costs of living, or unlikely to pay off your debt in the next 5 years, seek a Licensed Insolvency Trustee to get some debt advice and learn about your options for debt management.

For example: If you can afford to repay part of your debt, a Consumer Proposal can be a great way to substantially cut your monthly debt payments, freeing up room in your budget for savings and more.

Try the “Rule of 60” math:

• Divide your total non-mortgage debts by 60 – does the number look like a monthly payment you could consistently afford to pay so that you can have all your debt paid off in 5 years?

Compare the Monthly Payments of 4 Common Debt Options

A Common Debt Payment Trap to Avoid

Many people end up essentially trapped in a debt cycle of borrowing, paying, then re-borrowing.

It may not be obvious, but sometimes simply keeping up with your debt payments won’t be enough to successfully pay off debt or keep a debt problem at bay. One common area of concern we often see people stalled in is “the minimum payment trap”.

• Getting comfortable with making just your minimum monthly payments, especially on credit card debt, is risky and many people can get stuck in decades-long debt repayment cycles, not really making meaningful progress towards being debt-free.
• Your minimum payments on a credit card could be contributing very little per month to reducing your debt load, with the rest of your payment going to (ongoing) interest charges and fees.
  • Be aware that new interest charges can easily outpace your payments and even push balances past your credit limit – from there finances can unravel quickly.
  • Check your credit card statement to see how long it would take you to pay off your balance only making minimum monthly payments.

Over 3 in 5 Sands & Associates clients surveyed said “overwhelming stress” was how they eventually knew their debts were a problem. “Only making minimum payments” and “Accumulating more debt” were two other top-reported signs of a debt problem. – 2020 BC Consumer Debt Study

Strategies and Solutions to Get Out of Debt

If you have an income-to-debt ratio that is favourable (ie. higher income with lower debt levels), you may consider one of these first two payment strategies to help you pay down your debt:

• Focus on Highest Interest Debts First – The idea with this strategy is to save money by reducing interest charges where possible.
  • List all your debts, with the highest interest debt at the top.
  • Make all your monthly payment requirements across all your accounts but focus extra money you’ve identified in your budget towards the debt at the top of your list.
  • Once it’s paid off, move your extra payments on to the next one.
• Focus on Smallest Balance Debts First – If you do well being motivated with adding up all the small victories, this might be a different debt strategy to consider.
  • List all your debts, with the smallest balances at the top.
  • Again, make all your payments but focus extra funds on the smallest balance debt first.
  • Once it’s paid off, keep the ball rolling…

For those who want or need to take a more proactive approach to debt management – consider consolidating with a Consumer Proposal so you can:

• Consolidate virtually all types of debt without borrowing
• Save money by cutting debt by up to 50-80%
• Get breathing room from creditors and protect your assets and income
• Simplify your finances AND generally have the lowest monthly payments possible
• Have a definite date of being “debt-free”

How Much Debt Will a Consumer Proposal Eliminate? Learn More

As debt management professionals we are all too aware that unfortunately some strategies and actions can end up creating additional challenges, and often simply drag out the overall stress of the situation.

Many people pursue various debt strategies on their own such as:

• Borrowing from friends or family
• Applying to extend credit limits or get consolidation loans
• Using assets to pay down debt

It’s important for Canadians to know there is no cost to connect with a Licensed Insolvency Trustee for a confidential debt consultation so you can make an informed choice about how to deal with your debt.

• We can help you regardless of your credit score, and consultations to talk about your situation, answer all your questions, and assess your options are always free. We’re here to help you find your best solution to get on track, meet your goals and become debt-free for good.
• Sands & Associates can even work with you over the phone or via video conference, so you can get support from a qualified professional without leaving the comfort of home.

Whether you’re facing a difficult situation with your debt, want to explore options to cut debt, or pay off your debt with a guided debt-free plan – connect with a Licensed Insolvency Trustee to have a confidential debt consultation and get unbiased professional advice about all your options.

Got an hour? It could take less time than to get a debt-free plan that changes your life. Connect with a caring Sands & Associates debt expert today – book your free, non-judgmental debt consultation.

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