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.

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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.

Having polled over 2,100 people from around the province who recently made an insolvency filing, the 2024 BC Consumer Debt Study offers unique insights into consumer debt issues across the province, exposing the realities of dealing with a personal debt problem and the serious impacts of debt issues on consumers’ health.

Sands & Associates President and Licensed Insolvency Trustee Blair Mantin joined CTV News to share key findings from the 2024 BC Consumer Debt Study.

Watch the clips here and learn more below:

• The 2024 BC Consumer Debt Study’s largest cohort (36%) said they had $25,000-$49,999 of debt (excluding vehicle loans/mortgages) when they started their debt relief process.
• Over half of individuals polled (56%) said credit card debt was the main type of debt they had – 4.5 times more than the next leading type of debt.
• Payday (or instalment) loans were the second-most reported (12%) type of problem debt for consumers, as well as tax debt (12%).
  • Payday loan usage has almost doubled as the main type of problem debt for BC Consumer Debt Study participants since 2020’s study (6.3% of respondents attributed their main type of debt to payday loans in the 2020 BC Consumer Debt Study).
• 72% of people surveyed said overwhelming stress was how they knew their debts were becoming a problem.

Common Issues Driving Consumer Debt in BC

Four of the five top-reported causes of problem debt for consumers polled in the 2024 BC Consumer Debt Study may be related to issues outside the individual’s immediate control:

• Almost 1 in 4 people surveyed said the direct main cause of their debt was using credit for essential costs of living income could not cover (24%).
• Illness, injury or health-related problems (11%), marital or relationship breakdown (7%) and job-related issues (7%) were also direct main causes of debt identified by survey participants.
• 27% of British Columbians polled in the study attributed the direct main cause of their debt to overextended credit due to general financial mismanagement.

Debt Problem Warning Signs

An emotional cue was the top warning sign of a debt problem for most people:

• Over 7 in 10 individuals surveyed (72%) said overwhelming stress was how they knew their debts were becoming a problem.
• Other top signs of a debt problem reported by consumers included: Only making minimum payments (58%) and seeing debt balances remain almost the same every month, despite making payments (55%).

4 Budget Issues That Point to a Debt Problem

Impacts of Problem Debt on Consumers

The BC Consumer Debt Study series reveals the devastating effects that money problems can cause consumers, with impacts experienced far beyond financial transactions. The effects of dealing with problem debt as reported by individuals polled included:

• Almost 4 in 5 people (79%) said their mental health suffered because of being in debt, and 3 in 5 individuals (60%) said their self-esteem suffered by being in debt.
• Over 4 in 5 people (84%) said they had a constant worry about debt.
• 78% had anxiety, 69% feelings of helplessness or hopelessness, and 61% had depression because of debt stress.
• Close to half (48%) of respondents said being in debt caused their physical health to suffer.
• Roughly 1 in 7 individuals said they experienced suicidal ideation because of their debt-stress.

Consumers Delaying Seeking Debt Help

Almost 4 in 5 people (79%) said their mental health suffered because of being in debt and despite this, only 6% of individuals said they sought help as soon as they knew they had a problem.

• 41% of consumers polled in the 2024 BC Consumer Debt Study said they waited more than two years before seeking help – a 51% increase since the 2018 BC Consumer Debt Study.
• Most survey respondents (62%) say they waited to seek professional debt help because they wanted to manage debt on their own.
• More than half (54% and 51% respectively) said they waited because they felt ashamed they couldn’t handle the debts they incurred or were embarrassed to ask for help.

Misinformation remains a concerning barrier for individuals dealing with overwhelming debt:

• More than 1 in 4 consumers surveyed (27%) said they delayed seeking help for their debts because they didn’t know where to seek help.
• Nearly a third of individuals polled (32%) said they waited to seek professional debt help because they thought there was no solution to their situation. 

Learn About Debts You Can Include in a Consumer Proposal 

Solving Debt Problems

• Roughly 1 in 3 people surveyed (34%) tried to deal with their debts by applying to extend credit limits on existing debts.
• 26% of consumers said they applied for consolidation financing, while 25% used payday or instalment loans, and 5% asked family or friends to co-sign a consolidation loan (5.2%).
  • 33% of people said they borrowed from family or friends to make debt payments.

Individuals who recently used a legal debt relief process were surveyed for the 2024 BC Consumer Debt Study, with 85% of respondents who ultimately reorganized their debts using a Consumer Proposal, and 15% who sought debt forgiveness through Personal Bankruptcy.  The debt relief option of choice for consumers has changed remarkably in recent years, with Consumer Proposals now far outpacing bankruptcy.

• Over 90% of individuals polled in the 2024 BC Consumer Debt Study expressed satisfaction with their choice to file a Consumer Proposal or Personal Bankruptcy to deal with their debts.

Real Stories – Learn More from BC Consumer Sharing their Personal Stories

Where to Get Safe, Professional Debt Help

Blair Mantin, President of Sands & Associates, the firm of Licensed Insolvency Trustees who perform the debt study series, says that solving a debt problem independently can be nearly impossible for many people, and that unfortunately many consumers become overwhelmed and are unaware of the support available to them.

As Blair explains, BC residents are encouraged to seek support and solutions from a Licensed Insolvency Trustee at the onset of a debt problem, and consumers should know that:

• You can connect directly with a Licensed Insolvency Trustee local to your area to seek free, confidential debt advice and explore all your options for dealing with debt.
  • No referral or payment is necessary to have a free consultation, and there are no pre-qualifiers to meet.
• Consumers should be on guard against debt settlement agents and third-party referral sources that attempt to sell inferior or unregulated debt help services.
  • Licensed Insolvency Trustees are Canada’s only official debt help experts, fully qualified and endorsed to provide guidance on dealing with your debt, and a range of debt management services.
• You don’t need to be facing an extreme financial situation to seek information from a Licensed Insolvency Trustee – anyone can get free, confidential advice about their situation and options.

Sands & Associates believes that open conversations and non-judgmental support are key to removing barriers for people struggling with debt. If you are feeling worried or stressed about your debt, or want to explore debt management solutions and resources, connect directly with a Licensed Insolvency Trustee local to your area for a free confidential consultation.

Sands & Associates is BC’s largest firm of Licensed Insolvency Trustees focused exclusively on non-judgmental debt help for consumers and our full suite of services is available by phone, video, or in person at a local BC office near you.

The post New Debt Study Uncovers How Debt Problems Impact BC Consumers appeared first on Sands & Associates.

Findings from Sands & Associates’ 2024 BC Consumer Debt Study were released today, offering insights into consumer debt issues across the province. The twelfth annual study polled over 2,100 people from around British Columbia who recently made an insolvency (formal debt relief) filing, inviting individuals to share their personal insights and journey when dealing with a debt problem.

As Blair Mantin President of Sands & Associates, BC’s largest firm of Licensed Insolvency Trustees focused on consumer debt help explains, the annual study series aims to highlight the causes and effects of problem debt on British Columbians:

“Consumers are waiting longer than ever before to seek help, and as leaders in BC’s debt management sector, we feel it’s one of our key responsibilities to bring these issues – and solutions – to light.

Licensed Insolvency Trustees see firsthand how deeply financial challenges impact people, in virtually every aspect of their lives – and one of the most frustrating things is that so many consumers feel they are alone and don’t know they have resources available to help them solve these issues and move forward with their lives.”

Click here to read the full 2024 BC Consumer Debt Study report.

Click here to view and download the 2024 BC Consumer Debt Study infographic.

Key Takeaways from the 2024 BC Consumer Debt Study

• 79% of British Columbians polled in the 2024 BC Consumer Debt Study said their mental health suffered because of being in debt.
• Debt-stress resulted in: constant worry about debt (reported by 84% of consumers); anxiety (78%); poor sleep (70%); alienation from family or friends (30%).
• 72% of individuals surveyed said overwhelming stress was how they knew their debts were becoming a problem.
• 41% of survey participants waited more than 2 years before seeking help with their problem debt.
• 56% of people said credit card debt was the main type of debt they had, and the top two direct main causes of debt reported by all consumers were: overextended credit due to financial mismanagement (27%) and using credit for essential costs of living income could not cover (24%).

How British Columbians Are Accumulating Debt

Consistent with past BC Consumer Debt Study statistics, the largest cohort (36%) of 2024’s study participants had between $25,000-$49,999 of debt (excluding vehicle loans/mortgages) when they started their debt relief process, and 29% of consumers polled described their credit rating as ranging between ‘good’ to ‘excellent’ at the time of their insolvency filing.

Four of the five top-reported causes of problem debt may be connected to conditions or events outside consumers’ immediate control:

• Almost 1 in 4 people surveyed said the direct main cause of their debt was using credit for essential costs of living income could not cover (24%).
• Illness, injury or health-related problems (11%), marital or relationship breakdown (7%) and job-related issues (7%) were also direct main causes of debt identified by survey participants.
• 27% of British Columbians polled attributed the direct main cause of their debt to overextended credit due to general financial mismanagement.

Three types of debt that Licensed Insolvency Trustees often categorize as high-risk due to the costs of borrowing and likelihood of balances becoming unmanageable were highlighted in the 2024 BC Consumer Debt Study:

• Over half of individuals polled (56%) indicated credit card debt was the main type of debt they had – 4.5 times more than the next leading type of debt.
• Payday (or instalment) loans were the second-most reported (12%) type of problem debt for consumers, as well as tax debt (12%).

Most participants in the 2024 BC Consumer Debt Study (94%) said their household has been impacted by recent inflation increases:

• The largest cohort (85%) said inflation has their household now spending more on necessities such as food and gas.
• 53% of participants said their household is now spending more on shelter and utilities, and 51% said their household is no longer able to accumulate as much savings.

How Problem Debt is Affecting British Columbians

Individuals who participated in the 2024 BC Consumer Debt Study reported a devastating range of impacts from debt, affecting virtually all aspects of everyday life:

• Over 7 in 10 people surveyed (72%) said overwhelming stress was how they knew their debts were becoming a problem.
• Other top-reported signs of a debt problem that consumers identified included: Only making minimum payments (58%); seeing debt balances remain almost the same every month, despite making payments (55%).

Close to 4 in 5 people (79%) said their mental health suffered because of being in debt and 84% of individuals surveyed said they had a constant worry about debt:

• 3 in 5 of all individuals polled (60%) said their self-esteem suffered by being in debt; 78% had anxiety, 69% feelings of helplessness or hopelessness, and 61% depression because of debt stress.
• Roughly 1 in 7 people said they experienced suicidal ideation because of their debt-stress.

Nearly half (48%) of individuals polled also said being in debt caused their physical health to suffer, while close to one-third (32%) of consumers said their relationships suffered as a result of being in debt, and 29% said they had to put life events on hold being in debt.

What Consumers Did to Solve Problem Debt

Prior to seeking professional debt help from a Licensed Insolvency Trustee, consumers attempted to manage their debt with a range of actions, including many that required additional borrowing:

• Over 1 in 3 people surveyed (34%) tried to deal with their debts by applying to extend credit limits on existing debts.
• 26% of individuals said they applied for consolidation financing, while 25% used payday or instalment loans, and 5% asked family or friends to co-sign a consolidation loan.
  • Over a third (33%) said they borrowed from family or friends to make debt payments.
• 10% of British Columbians polled said they attempted to deal with their debt by working with a credit counsellor, and 7% by working with a debt repayment agent.

Individuals who recently made a formal insolvency (debt relief) filing were surveyed for the 2024 BC Consumer Debt Study, with 85% of respondents who ultimately reorganized their debts using a Consumer Proposal, and 15% who sought debt forgiveness through Personal Bankruptcy, reflecting that debt relief for consumers has changed remarkably, with Consumer Proposals now far outpacing bankruptcies as the debt solution of choice.

Why People Are Waiting to Seek Debt Help

Only 6% of consumers polled in the 2024 BC Consumer Debt Study said they sought help as soon as they knew they had a problem, and sadly the largest portion of individuals (41%) waited for more than 2 years before seeking help – a 51% increase since the 2018 BC Consumer Debt Study.

• Most survey participants (62%) say they waited to seek professional debt help because they wanted to manage debt on their own.
• More than half of consumers polled (54% and 51% respectively) said they waited because they felt ashamed they couldn’t handle the debts they incurred or were embarrassed to ask for help.

Misinformation remains a significant issue in reaching individuals to offer support and solutions:

• Over 1 in 4 BC consumers surveyed (27%) say they delayed seeking help for their debts because they didn’t know where to seek help and 15% said they delayed because they had misinformation about how the Consumer Proposal and/or Bankruptcy process worked.
• Nearly a third of people (32%) said they waited to seek professional debt help because they thought there was no solution to their situation.

How Insolvency Has Influenced Financial Outlooks

Over 90% of the individuals polled in the 2024 BC Consumer Debt Study expressed satisfaction with their choice to file a Consumer Proposal or Personal Bankruptcy to deal with their debts, and most individuals say that their experience receiving professional debt help also improved their finances and overall financial literacy:

• Two-thirds of survey respondents (67%) said getting professional debt help allowed them to improve their budgeting and/or savings skills.
• More than half of individuals polled (55% and 53% respectively) say they are now more confident in day-to-day financial management and have a better understanding about credit and borrowing.

Click here to read the full 2024 BC Consumer Debt Study report.

Click here to view and download the 2024 BC Consumer Debt Study infographic.

View the BC Consumer Debt Study series here.

For further details about BC Consumer Debt Studies or media inquiries contact Sands & Associates President Blair Mantin.

About Sands & Associates and the BC Consumer Debt Study Series

Since founding in 1990 Sands & Associates has grown to become a leader in BC’s debt help industry, now the province’s largest firm of Licensed Insolvency Trustees dedicated to debt services for consumers and small business owners. Sands & Associates’ “debt smart with heart” approach is at the core of our award-winning service, and we believe this is crucial to providing support to individuals in need.

It is our goal to promote open, honest conversations and increase awareness and support for consumers experiencing financial challenges and the BC Consumer Debt Study series offers a unique opportunity for understanding these deeply personal and often private struggles.

You are not alone in dealing with a debt problem, and you have options to clear debt and move forward with a financial fresh start. Connect with a local Sands & Associates expert today to take back control of your finances – book your free, non-judgmental debt consultation now.

The post Consumers Delay Seeking Debt Help Despite Drain on Mental Health – Latest BC Consumer Debt Study appeared first on Sands & Associates.

If you’ve been turned down for a consolidation loan you may feel discouraged and as though you don’t have any other options, but there’s good news – what many Canadians don’t know is that it is possible to consolidate your debt without borrowing. Read on to learn about some common reasons individuals are denied consolidation financing, and what you can do instead.

Why Debt Consolidation is Helpful in Paying Off Debt 

Often people who want to consolidate their debt are looking to get a handle on a financial situation that may be getting stressful or overwhelming, and gain better control over growing balances and payments. There are usually several benefits people try to achieve in consolidating their debts, such as:

• Making one monthly payment to cover all debt instead of trying to manage multiple payments.
• Having a clear plan to pay off debt rather than making inconsistent payments.
• Getting a lower interest rate on the balance owing, reducing the overall cost of carrying debt.

Debt consolidation with a lender means you’re taking out a new loan, not just changing an existing debt, and this means you must meet the lender’s qualifiers. Many consumers first turn to their bank or another lender when they want to consolidate their debt, and, as many discover, getting a consolidation loan can be a lot more difficult than they thought.

Reasons You Might be Denied a Consolidation Loan 

There can be several reasons you might have an application for credit rejected by a lender, and while not all lenders will have the same checks and qualifiers in place, here are some of the common reasons why you might not be able to get a consolidation loan (or other financing):

1. You have a low credit score due to a credit history that shows difficulty maintaining your payments, or a lack of credit history.

Your credit score is an ever-changing number ranging from 300 (low) to 900 (high). To get a consolidation loan with good terms, borrowers generally want you to have a credit score in at least the mid-600’s. Higher scores can qualify for you for ‘best terms’; less than this and you might only qualify for borrowing with a sub-prime lender, which typically comes at a higher cost.

2. You don’t have a major asset to use as security against your loan.

A lender may deny you a consolidation loan if you don’t have a significant asset such as home equity or a vehicle to pledge as collateral for the loan. Lenders will often ask to have an asset as security for borrowing so they have additional means to recover their money – if you stop paying they can seize and sell the asset.

Lenders may also ask you to bring in a co-signer to back up your loan. Much like using an asset as collateral, this gives your creditor other avenues to collect their debt, but carries significant financial risks to your co-signer, not to mention any relationship risks, if you have difficulty making your payments.

What You Should Know About Co-Signing Debts

3. Your income is deemed too low or inconsistent to meet the lender’s threshold.

Lenders want to be assured that you can afford to repay your loan within the amortization period and, from their perspective, the higher your payments are compared to your income, the riskier it becomes that you’ll default on your loan. This can be particularly problematic if you have a lot of debt, have seasonal or part-time income, are self-employed, or lack employment history.

4. Your debt load is too high to qualify for borrowing.

If your debts are high in comparison to your income lenders are likely to deny you a consolidation loan. Lenders may interpret a lot of debt as symptomatic of you having issues controlling spending or they may consider your debt-to-income ratio simply too unbalanced for you to be able to reliably repay a new loan.

How Much Debt is Too Much?

What Are the Alternatives to a Consolidation Loan?

Fortunately, borrowing isn’t the only way to consolidate your debt to get relief from accumulating interest and never-ending payments. In Canada consumers have a few options to consider that can serve to streamline multiple payments, ease interest charges and relieve pressure on your monthly budget.

Consumer Proposals – Consolidate and Cut Debt (up to 80%)

A Consumer Proposal is a unique option in Canadian law and is one of the best ways to consolidate – and cut – your debt, without borrowing, interest, or added fees. This is a legal debt consolidation solution you can access only through working with a Licensed Insolvency Trustee.

• A Consumer Proposal can be used to consolidate virtually all types of debt – credit cards, payday loans, lines of credit, government debts such as income tax balances, business GST, CERB overpayments and more.
• You’ll offer to repay your creditors the portion of your balance you can reasonably afford to pay over a period of up to five years, and they will agree to forgive the rest. It’s not uncommon in a Consumer Proposal for debts to be cut by up to 50-80%.
• Your debts are frozen and because there is no borrowing needed, there are no interest charges.
• A Consumer Proposal will stop interest charges as well as collection actions, even government wage garnishments or bank account freezes.
• The administrative costs for your Licensed Insolvency Trustee are calculated by government-set tariff and are paid from the funds your creditors receive – there is no added or out-of-pocket cost for you – you simply pay what you’re offering your creditors.

A Licensed Insolvency Trustee can talk with you about your situation and whether a Consumer Proposal is your best option. For many people a Consumer Proposal is the ideal solution, allowing you to repay what is affordable and giving you a clear debt-free date.

Credit Counselling – Repay 100% of Your Debt

These informal debt repayment plans are coordinated by a credit counsellor who will try to negotiate an interest reduction or freeze with your eligible creditors, and you’ll make your consolidated monthly payment to the credit counsellor.

• Credit counselling doesn’t reduce your debt and can only consolidate basic debts.
• Because you’re not reducing your debt and will pay a fee to the credit counsellor on top of what you pay to your creditors, credit counselling plans can have high monthly payments, making them an unaffordable and unreliable option in many cases.

Unqualified Debt Advisors – What Consumers Need to Know

Can I Afford a Consolidation Loan? 

It’s important to understand that if you’re considering a consolidation loan or have been turned down for one, your debts may have already reached a point where simply combining them into one new loan is not going to be a significant enough solution to allow you to get out of debt without considerable cost or time.

• If you add up all your debts, divide this number by 60 and couldn’t afford the resulting number as a realistic monthly payment, this is a very simple way to know that a consolidation loan would likely only delay a later cash-crunch and prolong debt-stress you may be experiencing.

If you think you have a debt problem, are worried about managing your debts, or want to find a better way to pay off your debt within five years, the best thing to do is talk with a Licensed Insolvency Trustee to get qualified expert advice about your situation and all your options.

Get Help with Debt Consolidation – Talk with a Licensed Insolvency Trustee About

Licensed Insolvency Trustees are Canada’s only designated debt help professionals, and we are the only experts qualified to offer debt advice to consumers, including solutions that can help you get forgiveness for virtually all types of debts.

• If you live in BC you can talk with a Licensed Insolvency Trustee from Sands & Associates, we serve the entire province from local offices and you can also access our full suite of debt help services over the phone or online – whatever is most comfortable and convenient for you.

When you need guidance on dealing with debt, a Licensed Insolvency Trustee is your best resource, and all Licensed Insolvency Trustees should offer you a free, confidential debt consultation. This is your opportunity to get specific advice about your unique situation and explore all your options, including debt consolidation financing, Consumer Proposals, credit counselling plans and more.

• We’ll spend the time to understand your concerns, needs, and goals and at the end of your consultation you should have all the information you need to make an informed decision about how you want to move forward – and a clear outline of your next steps.
• You don’t need any to get a referral to talk with a Trustee, and there are no qualifiers for you to meet. Just reach out to a Licensed Insolvency Trustee local to your province directly.

You owe it to yourself to get debt help, and we’re here to support you. No judgment, just solutions!

Talk with a non-judgmental debt help expert at Sands & Associates to get a debt-free plan that works for you, and move forward with your life.

The post Turned Down for a Consolidation Loan? Here’s What You Can Do appeared first on Sands & Associates.

What Does it Mean to File for Bankruptcy in Canada?

Bankruptcy is a legal solution to help people get relief from and resolution for their debt. In completing the process of bankruptcy in Canada, a person who previously was unable to manage their debt can get a financial fresh start.

• Working with a Licensed Insolvency Trustee (the professional who will handle the bankruptcy administration and guide you through the process) you may be able to have virtually all your debts forgiven, including but not limited to debts from credit cards, payday loans, taxes, CERB overpayments, student loans and more.
  • No creditor or other party can prevent you from seeking the protection and relief of bankruptcy if you are unable to pay off your debt.
• Most often people complete the process of bankruptcy in only nine months, paying an administrative fee over this time, and completing some basic duties as part of the bankruptcy process.

Once you’ve officially filed for bankruptcy, this triggers what is called a ‘stay of proceedings’ which prohibits creditors from continuing to pursue you for payments, charging ongoing interest, taking collection actions, etc. Because of this stay of proceedings, bankruptcy offers immediate and powerful protection from your creditors, including stopping wage garnishments and other legal actions that can put your assets and income at risk.

Your Assets in Bankruptcy – Bankruptcy Exemptions in BC 

It’s true that most people filing personal bankruptcy in Canada keep all their assets, and this is because each province and territory has laws that specify assets that are legally exempt and therefore safe from seizure by creditors. Here in BC, asset exemptions set through the Court Order Enforcement Act entitle you to claim exemption amounts on the following assets, even when you can’t pay your debts:

• $4,000 for household furnishings and appliances (at resale or liquidation value, like what you could expect to get at a garage sale)
• Clothing and medical aids – up to an unlimited value
• $5,000 for a motor vehicle (this is reduced to $2,000 if you have an outstanding debt owing under Family Maintenance Enforcement Act)
• $10,000 for tools or other personal property used to earn income from your occupation, also known as tools of the trade (again, at a resale or liquidation value – not new or replacement value)
• $12,000 equity in your principal residence if you are within the Metro Vancouver or Greater Victoria area ($9,000 elsewhere in the province)

Inheritances and lottery winnings that you acquire before being released (discharged) from bankruptcy are examples of property that would not be exempt.

Compare Your Debt Options

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

Claiming Bankruptcy and Keeping Your Car (or Other Assets)

When it comes to larger assets like homes and vehicles, not only the value of the asset is considered, but also whether there is a secured debt owed against it and the resulting equity the person has in the asset (essentially the difference between the value of the asset and the value of the loan owed against it).

When it comes to a home or vehicle, many people don’t own these assets free and clear, and if the asset is subject to a secured debt, there are a few options to consider in bankruptcy:

• If you want to keep the asset you could decide to continue with the ongoing payment arrangement (or try to negotiate new terms) with your secured creditor.
  • If your mortgage (or other secured debt) payments are up-to-date and you want to continue with the agreement in place, these are not usually impacted at all by filing for bankruptcy.
    • If your current mortgage is in good standing, generally lenders will honour mortgage renewals that come due during the period of your bankruptcy.
• Or you could decide to walk away from the asset and ongoing financing arrangements altogether, and any equity above and beyond your exemption would be paid into your bankruptcy estate.
  • You may decide to sell the property through the bankruptcy, and each homeowner would be entitled to receive their exempt equity amount (up to $12,000 each) from the sale proceeds.
  • If foreclosure proceedings were underway and the secured creditor was taking possession, any shortfall from the subsequent seizure and sale of your home would be written-off as part of the bankruptcy.

What Do You Lose When You Declare Bankruptcy?

Bankruptcy isn’t meant to be a punishment, it’s a solution to help you solve unmanageable debt, and while assets that are outside the exemptions are intended to form part of your bankruptcy ‘estate’ and be available towards satisfying your debts – the reality is that even if you own something beyond the exemption allowances, non-exempt assets are often kept by individuals and there are a few ways of achieving this, such as by:

Paying in the non-exempt value of your assets to your bankruptcy estate – this is sometimes referred to as ‘repurchasing an asset’ even though you will physically retain it the whole time. For example:

• You own free and clear a vehicle appraised at a value of $8,000, and are entitled to a $5,000 exemption allowance, leaving you with $3,000 non-exempt equity. You could choose to keep the vehicle and pay in $3,000 to your bankruptcy estate by way of monthly payments.

Alternatively, the most common (and often best) way to keep virtually all your assets, while still getting protection from your creditors and a legal solution to manage your debt is to file a Consumer Proposal rather than bankruptcy.

• You will not automatically lose your home or other assets if you file for bankruptcy or make a Consumer Proposal. If you move forward with bankruptcy or a Consumer Proposal, the biggest (and often only) thing you have to lose is your debt!

What is a Consumer Proposal?

A Consumer Proposal is a unique legal debt solution that is considered an alternative to both consolidation loans and bankruptcy. Filing a Consumer Proposal allows you to consolidate your debt without borrowing and cut the amount of debt you must repay down to what you can reasonably afford.

• By making (usually) monthly Consumer Proposal payments administered by your Licensed Insolvency Trustee, many Consumer Proposals are successful in cutting debt by up to 50-70% – with no borrowing costs or added administration fees.
• With a Consumer Proposal you keep all your assets unless you specifically decide to end the ongoing financial commitment through the Consumer Proposal.
  • Like bankruptcy, when it comes to secured debts (a mortgage, vehicle loan, etc.) you have the option of keeping the payment arrangements in place if you want to keep the asset, or you could surrender the asset to end the ongoing obligation. (And if there’s a shortfall this could be included in the Consumer Proposal.)

How Much Debt will a Consumer Proposal Eliminate?

Confidential Debt Advice 

Understanding your situation and ways to deal with debt is best done with the help of a Licensed Insolvency Trustee. We are Canada’s only qualified debt help professionals and can assist you in exploring ALL possible solutions. If you’re struggling with unmanageable debt, or finding it difficult to pay down your debt, connect with a local Licensed Insolvency Trustee to have a free, confidential consultation about your options.

• There are many ins and outs to consumer debts and your rights, responsibilities, remedies can be complex. Avoid troubleshooting what can be a complicated legal subject, incorrectly disqualifying yourself from getting support and solutions, or unknowingly enlarging the problem – take an hour to find out the facts.

Licensed Insolvency Trustees are dedicated debt help professionals who offer impartial expert advice, and we understand how stressful financial troubles can be.

• Sands & Associates serves the entire province of BC, and you can get free, qualified advice and support from a non-judgmental professional in person at one of our local offices, over the phone, or over video chat – whatever is most convenient for you. No judgment, just support and solutions.

Talk with a friendly, local debt expert who cares. Book your free, confidential debt consultation with Sands & Associates today.

The post What Assets Can I Keep if I Declare Bankruptcy? 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.

What is the Bank of Canada, and What Do They Do?

The Bank of Canada is the country’s central bank; it is a special type of Crown corporation belonging to the federal government that exists “to regulate credit and currency in the best interest of the economic life of the nation” with their primary role being “to promote the economic and financial welfare of Canada”.

Monetary policy is a core Bank of Canada function, and two main instruments used in this are its inflation-control target and the key policy rate:

• Inflation is the persistent rise in average price levels over time, and the Bank of Canada aims to maintain a stable price environment – a low, stable, predictable inflation is their goal. With price stability and low inflation, prices change so slowly there’s no major effect to how people spend, save, or invest.
• The Bank of Canada adjusts its key policy interest rate up or down as needed to achieve its inflation target. Doing so influences financial institutions’ interest rates, borrowing and spending, and pressure on prices.

What Does the Bank of Canada’s Interest Rate Mean for Other Banks?

Financial institutions borrow from each other and can also use the Bank of Canada, and by setting their policy rate the Bank of Canada encourages financial institutions to borrow and lend amongst themselves near the policy interest rate too. What this means is that although the public doesn’t borrow with the Bank of Canada, their policy rate affects interest rates on products such as:

• The prime rate for loans and lines of credit
• Mortgage rates
• Interest on savings and deposits

When the Bank of Canada changes their rate, lenders will generally adjust their prime rates shortly after.

• Prime rate is the annual interest rate our major banks and financial institutions use to set their interest rates for variable credit products, including loans, lines of credit and mortgages with a variable rate.

How Interest Rate Increases Impact Common Consumer Credit Products

Depending on which products (types of debts) you have, and whether your debts have fixed or variable interest rates, the impact of an interest rate increase can vary widely, from very significant to having no impact at all.

• When you have a fixed-rate debt you agree to pay the same interest rate over the course of your repayment term, regardless of shifts in the economic market.
  • One benefit with this type of borrowing is that you’ve got stability in paying the same interest rate (until you need to renew, such as with a mortgage at the end of a set term).
• With variable interest rates, as the prime rate goes up or down, so does the interest you’re being charged on your debt. When you apply for credit with a variable interest rate the lender will offer you an annual interest rate tied to the bank’s prime rate.

Below is a breakdown of different types of common consumer debts, and how they may be impacted (or not) by interest rate changes:

Mortgages

The biggest impact of interest rate increases is likely to be felt by homeowners who are carrying variable interest rate mortgages.

• On a variable rate mortgage, quite simply, most payments will see an increase because of rate hikes. Most banks adjust quite quickly – people might see the impact even by the next month.
• Just a small interest rate hike can be very impactful. For someone with a variable mortgage of 2-3%, even a 1% increase in interest rates can translate up to a 50% increase in the interest being charged on the mortgage.

Conversely, on a fixed rate mortgage, your payments will not increase as you have ‘locked in’ the rate you will be charged over the term of the mortgage. At renewal time however, you can expect that the rates you locked in at previously may no longer be available and your new interest rate upon renewal could be significantly higher.

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

Lines of Credit and Home Equity Loans

Most lines of credit (whether secured against your home or not) are offered with a variable rate, which means there is a direct impact of an interest rate increase.

• Higher payments will be required immediately, and this can be very significant – especially if you are financially stretched and are capable of paying just interest only on your line of credit.

Vehicle Financing

Most vehicle loans are structured with a fixed interest rate, meaning that payments wouldn’t change at all.

Although an interest rate hike won’t cause a direct increase on your monthly vehicle financing payment with a fixed interest rate, individuals with vehicle financing should be aware that:

• If you decide to trade-in your vehicle before the end of your financing contract, you may absorb the ‘negative equity’ (i.e., the value of your vehicle, less the amount you still have to pay on the original loan contract).
• New loans applied for following an interest rate hike will most likely have higher interest rates, and as a result will come with an increased cost to borrow.

If you do have a vehicle financing contract with a variable interest rate component, normally a rate-hike will mean extending the time you’ll make payments so that the additional interest rate costs are paid. 

An Overview of ‘Seize or Sue’ and Vehicle Loans in BC – Learn More

Student Loans

If you have a fixed-rate student loan you won’t be impacted with increases in your interest rate or monthly payments, but following increases in prime rates, future student loans can become more expensive.

However, if your student financing is using variable rates, both your interest rate and minimum payments will increase with interest rate hikes.

Are Credit Cards Impacted by Interest Rate Changes?

Most credit card terms are set without regard for prime interest rates and if your only debt is on credit cards then your monthly payment requirements are unlikely to be impacted by an interest rate increase.

With standard credit card interest rates hovering near 20%, the very real danger of interest when it comes to credit card debt is that the interest charged is always expensive, regardless of fluctuations in the Bank of Canada rate.

• If you’re not paying off your credit card in full each month you accrue interest charges – a cost of borrowing – and then only a portion of your payment goes towards paying down the amount you actually charged on the card.
  • In some cases, just $10 of what you pay each month goes to reduce the balance; the remainder covers interest and finance charges that reoccur each month.
  • Check your monthly credit card statement to see a breakdown of how long it will take you to pay off your credit card balance if you only pay the minimum payments each month. The number might surprise you!
• If you miss a payment, you could find your bank raises your credit card interest rate because of the ‘delinquency’. Increases of up to 5-10% are not unheard of.

Dos and Don’ts for Credit Cards and Managing Credit Card Debt

What Can I Do About Rising Interest Rates?

The single biggest and best thing you can do to prevent or mitigate being impacted by interest rate increases is to pay down as much of your debt as possible – and even if you’re mainly carrying debts not likely to be impacted by rate hikes, the sooner you get out of debt the better.

• Calculate your “Rule of 60 Math”: Add up your total (non-mortgage) debt then divide that number by 60.
  • Is that figure a monthly payment you could afford to pay so that you’ll have your debt paid off in five years (60 months)?
  • If that hypothetical payment is not affordable for you, or you think it would be difficult to consistently manage, connect with a Licensed Insolvency Trustee about your options for dealing with debt – especially if you’re already in (or are approaching) a position of being over-extended.
• If you’re a mortgage holder, you may want to research options for locking in your mortgage to a fixed rate. Though often more expensive in the long-term, a fixed rate mortgage can give you certainty for your budget.
  • Be sure to shop around for the best rates and consider using a mortgage broker.
• Proceed with caution if you’re considering restructuring your debts with consolidation loans or balance transfers – it’s important to fully understand the full costs of borrowing before signing any documents.
  • If your credit history has been impacted by an unfavourable debt to income ratio you may find it difficult to qualify for a line of credit or consolidation loan at a low interest rate, or at all.
  • Make sure you can realistically stick to the budget needed to get your debt paid off and are not simply delaying an inevitable cash-crunch.

Learn More About Credit Reports and Scores in Canada

Consolidate and Cut Your Debt – Without Borrowing

Although you might consider a new loan or line of credit, a Consumer Proposal provides a welcome alternative to consolidate your debt without turning to more borrowing and paying interest charges:

• A Consumer Proposal allows you to pay off your consolidated debts without any further interest charges, and your creditors will agree to accept repayment of typically as little as 20-50% of your balance due, in full settlement of your accounts.
  • Virtually all types of debts can be consolidated and reduced with a Consumer Proposal – from credit cards to lines of credit, overdrafts, income tax debt, CERB overpayments, student loans and more.
• Your credit history or credit score are not factors for eligibility, and no co-signer is needed.
• You can pay off a Consumer Proposal early at any time without penalty.

Connect with a local BC Licensed Insolvency Trustee to learn more about Consumer Proposals and explore your options.

Licensed Insolvency Trustee Blair Mantin Talks Interest Rates and Debt Solutions

Sands & Associates President and Licensed Insolvency Trustee Blair Mantin joined Global News and Breakfast Television Vancouver to discuss what Canadian consumers should know about interest rates and debts, including what you can do to deal with problem debt. Watch the clips here:

Sands & Associates’ local office network serves communities across BC, and our full suite of debt help services is available online, by phone, or in-person. Connect today at no cost to discuss your situation and learn about your options.

The post Understanding Interest Rates – and Why They Matter if You Have Debt appeared first on Sands & Associates.

The team of professionals at Sands & Associates is deeply committed to making a positive difference in communities across the province, providing resources, guidance, and expertise in a non-judgmental space and communicating with kindness in a straightforward approach. We believe that everyone deserves to make informed decisions and receive the necessary support to manage their finances confidently.

Our concept of supportive and empowering debt help services has been described as “Debt Smart with Heart” and it is our privilege to provide a safe space for people to talk about their financial challenges and help solve those issues. You owe it to yourself to get debt help – connect with a local Sands & Associates debt expert now.

Learn About Your Options with a Qualified Professional

Licensed Insolvency Trustees are Canada’s only debt help professionals fully qualified and federally endorsed to assist and guide consumers and business owners in assessing all their options to deal with debt, from debt consolidation services to debt relief solutions and more.

By connecting with a Licensed Insolvency Trustee local to your province you can safely get accurate advice about your situation and solutions to deal with your debt and move forward with your life.

• No referral is required to speak confidentially with a Licensed Insolvency Trustee and get advice about your situation, and information about solutions and resources to help you manage your debt.
• All Licensed Insolvency Trustees offer a free one-hour consultation for you to get one-on-one support and answers to your questions.

Many people struggle with asking for help, or don’t know where to turn for support, and we believe that normalizing conversations about debt and money problems is an important piece of taking the shame and stigma away from debt-stress. If you are feeling the strain or stress of debt – know that you are not alone, and that there are solutions.

Meet people who changed their lives working with Sands & Associates and hear their real stories

Who Do Licensed Insolvency Trustees Help?

Your financial situation does not need to be ‘bad’ to qualify for help from a Licensed Insolvency Trustee. Sands & Associates helps people across BC – any BC resident can have a free, confidential consultation to talk about their situation, needs, and get a plan to become debt-free.

Some common situations we help people resolve include, but aren’t limited to:

• You’d like general information about how you can pay off your debt.
• You need guidance about your legal rights or remedies in dealing with a specific debt or creditor.
• You are concerned about escalating collections or legal action by a creditor, such as a wage garnishment or bank account seizure.
• You feel trapped in a debt cycle or can’t make substantial progress in paying down your debt.
• You think you may need debt forgiveness or formal debt relief.
• You’re considering debt consolidation or some type of debt restructuring solution.

If you decide to move forward with a Consumer Proposal or personal bankruptcy, we can work with you throughout these processes, and if you prefer to work on a self-directed plan, we will provide you with information on any additional resources that can help you be successful.

What to Expect at a Debt Consultation with Sands & Associates

Whether you have a specific goal, concern, or general questions – your meeting will focus on reviewing your financial situation together and providing you with all the information you need to make a fully informed decision about a range of options to deal with your debt.

At Sands & Associates our goal is for you to understand the options that are available, assess which feels like the best fit for your situation, and together build your plan to get out of debt. Some of the possible debt management solutions we’ll discuss will include, but are not limited to:

• Focused do-it-yourself approaches such as: budgeting, prioritizing specific debts, utilizing available assets, resources such as BC’s statute of limitations, etc.
• Refinancing solutions and strategies.
• Debt repayment plans offered by credit counsellors and other types of informal debt agents.
• Consolidating and cutting debt with a Consumer Proposal.
• Personal bankruptcy, where full debt forgiveness is appropriate or other options unsuitable.

In under an hour you’ll get a personalized debt-free plan and have a clear outline of your next steps.

Debt doesn’t have to last forever – move forward with a debt-free plan that works for you. Book your free debt consultation today.

The post Office Spotlight: Sands & Associates Prince Rupert appeared first on Sands & Associates.

Watch the clip here, and read more below:

Potentially Risky Consumer Debts

Although these two common types of credit can offer a short-term benefit, use caution when taking on these debts, where payments can easily become unmanageable:

Long-Term Vehicle Financing: Many people finance a vehicle, which is not necessarily a problem – but financing terms are now longer than ever. Even though committing to a five, seven, or even eight-year financing term is becoming more common, consider the risks of doing so:

• Making an unaffordable vehicle ‘affordable’ by stretching out payments over a longer term.
• Investing in an asset that will rapidly depreciate (the exact opposite of a mortgage, where your investment is expected to increase in value).
• Extended car payments can take up a big portion of your household income that could be used for savings, retirement, or even paying off other debts.

Credit Card Balances: Your credit has already been used and now you’re committed to the payments – and the worst part about credit card debt – the high interest that accumulates on often long forgotten purchases.

• If you’re not able to pay your balance in full each month it’s easy for credit card debt to add up over time, and this often happens through frequently overspending, sometimes as a direct result of having insufficient income to meet both your household costs AND debt payments.
• The ‘borrow-repay-borrow’ cycle can be almost impossible to break.
• With an interest rate of 24% (a mid-level rate for most bank and department store cards) your debt will double every three years!
• Making only minimum monthly payments (or slightly more than) means even a relatively small balance can take years to pay off. For example, a $6,000 debt could take 40 years+ to pay off making only your minimum monthly payments and you would pay several times more in interest charges than the actual amount that you originally borrowed.

Compare Monthly Payments with Our Debt Options Calculator

Most Risky Consumer Debts

These types of debts can point to an urgent debt problem, either present – or waiting to reveal itself:

Payday or ‘Fast Cash’ Loans: Payday loans are usually a ‘last resort’ type of debt used to meet daily living expenses in a hurry. Because the borrowing fees and interest charges on payday loans are extremely high, using payday loans or ‘fast cash’ advances creates a major risk of kicking off a borrowing cycle that can be even more difficult than credit cards.

• This type of borrowing often leads to people carrying multiple payday loans. It’s not uncommon for people to become trapped in a cycle of payday loans, to have up to a dozen different loans outstanding at the same time.

Canada Revenue Agency Debts: Whether an unpaid balance for income taxes, business GST, or CERB overpayment – an outstanding government debt is not to be taken lightly.

• The government has powerful collection actions at their disposal, and, unlike many other creditors, Canada Revenue Agency can start collection action virtually overnight. You may not learn of pending action until it is already in place, including wage garnishment/seizure, a bank account freeze, or a lien placed on your property.

If you find yourself unable to repay your government debt, or in a situation where collection action is escalating, talk with a Licensed Insolvency Trustee as soon as possible.

Learn More About Solutions for Having Government Debts Forgiven

Consumer Debts to Be Cautious Of

There are two additional types of consumer debt to be cautious of, particularly when it comes to trying to manage debt you already have:

Co-Signing Debt: As Licensed Insolvency Trustees we’re regularly asked when it would be advisable to co-sign a debt for someone else – our answer: almost never!

• Co-signed debts are not a 50/50 liability as many people believe – each person on the account is responsible for 100% of the unpaid debt if the other person does not pay.
• Getting a co-signer when you’re already struggling financially often just introduces additional layers of stress and emotional responsibility – you’ve now given that creditor another responsible party to pursue for payment.
• Conversely, if you’re considering co-signing for someone else, understand that you are potentially letting someone else impact your monthly financial commitments and credit rating.

Read More About Co-Signing Debts

Using Assets as Collateral: Particularly if you are seeking to consolidate debt by borrowing, lenders may require you to pledge to them security over an asset to get a loan.

• Like co-signing, in the event you are unable to meet your repayment terms, your creditor now has additional recourse to collect upon the debt, which could include seizing and forcing the sale of the pledged asset.
• Be especially careful before taking on additional charges against your home equity – you only have so much to borrow against, not to mention potentially leaving yourself vulnerable to an interest rate increase or downturn in the housing market.

Learn More About Options to Consolidate Your Debt

Where to Get Debt Help in BC

If you have concerns about any of your debts or are considering what you can do to manage your debt, reach out to a local Licensed Insolvency Trustee in your province. You can safely get confidential support from a qualified and unbiased professional by contacting a Licensed Insolvency Trustee for a free debt consultation.

Sands & Associates’ team of debt help experts work with people across British Columbia and our full suite of debt help services is available in person from local offices around the province, over the phone, or online – whatever is most comfortable and convenient for you.

Your debt-free future IS possible and may be closer than you think. Connect with a caring, non-judgmental Licensed Insolvency Trustee today – book your free, confidential consultation now.

The post Risky Consumer Debts – and What to Watch For appeared first on Sands & Associates.