• 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

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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.

President of Sands & Associates and BC Licensed Insolvency Trustee Blair Mantin joined Global News BC to address some frequently asked questions about managing debt and share information consumers should know when dealing with some common types of personal debt.

Watch the clip here, and read on to learn the answers to some common personal debt questions, with debt expert insights to help you meet your debt-free goals:

Frequently Asked Questions About Personal Debt 

Every day Licensed Insolvency Trustees connect with people seeking information about debt who may be facing a variety of financial challenges and concerns – from urgent situations with wage garnishments, to looking for ways to streamline debts and make monthly payments more affordable. Here are answers to questions that are among the most common:

“Am I responsible for my spouse’s debt?”

The short answer is – no! You’re not personally responsible for repaying the debts of your spouse or partner simply by being related, married, living together or even their death. It is a common misconception, but rather than through marriage, responsibility for ‘spousal debt’ may be triggered by:

• Debts being deemed as ‘family debt’ under BC’s Family Law Act following separation or divorce, or
• Co-signing or co-borrowing on debts together.

This conversation often leads to an insight that many Licensed Insolvency Trustees wish was better understood by people: Co-signing debt with anyone is usually riskier than you think – so much so that we almost never recommend it.

• Besides adding layers of emotional stress to your finances, by co-signing or co-borrowing with someone (related or not), you become equally responsible for paying back 100% – not half, of the full balance due if the other party does not pay.

What You Should Know About Co-Signing Debts – Learn More

“Do unpaid debts expire eventually?”

In BC there is a Limitation Act, under which the length of time a creditor has to sue you for a debt owing is capped with a two-year basic liability limitation period. You technically will owe the debt, and creditors can continue to call you or report delinquent accounts to credit bureaus for some years to come, but the creditor cannot take legal action against you if it’s been two years since:

• The date the unsecured debt was incurred; or
• The date of your last payment on the debt; or
• The last written acknowledgement of the debt by the person who owes the money (yes, emails count).

It’s important to know certain things can ‘reset’ the clock, and there are exceptions; judgments, child support and debts owed to government bodies are examples of debts not covered.

But – there is another fact people often don’t (but should!) know about debt: There are options to restructure and get forgiveness for government debts – including Canada Revenue Agency balances for taxes, business GST, federal and provincial student loans, CERB overpayment, ICBC debts and more.

• Canada has two solutions for relief and even 100% forgiveness of consumer and government debts: a Consumer Proposal (a legal non-borrowing debt consolidation option) or personal bankruptcy.
• These also stop Canada Revenue Agency from wage garnishments, account freezes and putting a lien on your property.

Debt Solutions for Having Government Debts Forgiven – Learn More

“What can I do to deal with my debt without impacting my credit score?”

Virtually every debt strategy can have some effect to your credit history and score, but simply carrying a bunch of debt can affect your credit score too. Any time you don’t pay your debts off in full in a timely way and according to the original lending agreement, your credit history may be impacted. For example:

• Making only minimum monthly payments on your credit card will keep it up to date (good of course), but it takes a long time to clear debt this way and depending on your balance this could cause you to have a score continually impacted by a high credit utilization rate.
• New credit applications (such as from seeking consolidation financing) result in a ‘hard hit’ that temporarily affect your credit score.
• If you pay off any debts using a credit counselling plan this will be reflected on your credit history for two years; three if you consolidated and cut your debt with a Consumer Proposal; six if you file for bankruptcy (which can result in full debt forgiveness for all your debts).

The anxiety of credit score VS paying down your debt is real. For people concerned both about how to maintain your credit score and pay down debt, it’s helpful to understand that:

• Even if you maintain a ‘good’ credit score, without a major asset, high income, and/or a co-signer, it can be difficult (if not impossible) to get more credit such as a consolidation loan at a ‘best rate’.
• By addressing your debt, you will be doing more for your credit score and yourself; scores are always changing, and you can productively change your score in a relatively short period.
• The sooner your debts are paid off, the faster you can benefit from (often dramatic) improvements to finances. Imagine how different things would be in your household without the burden of debt!

How to Better Manage Credit and Debt, and Mistakes Not to Make – Learn More

What the Experts Want You to Know About Dealing with Debt 

There’s a lot to know about debt and debt strategies, but two things many debt experts (and certainly Sands & Associates’ Licensed Insolvency Trustees) would agree we wish people knew are:

1. You do not have to pay to get honest professional debt advice

Bring your questions to a Licensed Insolvency Trustee and get advice before you make moves in dealing with your debt. You want to be certain you get complete and accurate information from a qualified professional. At Sands & Associates consultations are confidential, without judgment – and always free.

2. A debt problem can happen to anyone at any time, despite “doing all the right things”

You do deserve support, and to be treated with dignity and respect. You are not alone, we are here to help you move forward with your life.

As Licensed Insolvency Trustees one of the main services we provide to people is helping them better understand their personal debt situation, and all their options for dealing with debt. We’ve outlined just a few common questions here, but everyone’s situation is unique and you should never be afraid to seek support from a Licensed Insolvency Trustee so you can make informed decisions about how to move forward.

Sands & Associates is here for you with support and solutions. Get advice from experts who care, and a plan to be debt-free – book your free confidential debt consultation today.

The post Learn the Answers to Top FAQs Debt Experts Hear appeared first on Sands & Associates.

With another year’s tax deadline to pay now passed, Licensed Insolvency Trustee and President of Sands & Associates Blair Mantin joined Global News to share some key facts Canadians should know about tax debt, and what you can do if you can’t pay your taxes and need help.

What if I Can’t Pay my Taxes?

Learn some key facts about having a debt with Canada Revenue Agency that you should know if you’re unable to pay your income tax balance.

1. Not Filing and Paying Taxes on Time Can Cost You…Daily!

If you were among the filers unable to pay their income tax balance in full before this year’s deadline, unfortunately your balance is going to grow. CRA’s add-ons to tax debt can make even a modest balance balloon very quickly with:

• Compounding daily interest on the unpaid latest balance owing.
  • Interest can also be applied to unpaid instalment requirements, GST remittances and more.
• Late filing penalties if your return is not filed on time and you have a balance owing. For example:
  • In 2021 most people had until April 30^th to file and pay their 2020 returns, with self-employed individuals having until June 15 to file, although they still must have paid the balance owing by April 30^th.
  • Late filing penalties started at 5% of your 2020 balance owing plus an additional 1% for each full month you filed after the due date, to a maximum of 12 months.
  • Late filing penalties may be charged at double the rate if you’re a habitually late filer – a 10% penalty plus 2% interest per month – making this tax debt even more expensive than many credit card interest rates!
• Even if you’re unable to pay your balance in full, filing as soon as possible still helps you avoid ongoing late-filing charges.

If you don’t owe anything on your income tax return, it’s always in your best interest to file. Being able to prove your income for credit or housing applications, and receiving benefits such as GST, GIS, Canada Child Benefit etc. are all reasons (besides fulfilling what CRA views as your obligation) to get your tax return filed on time.

2. Your Tax Debt Does Not Expire

Although you may be able to avoid your balance owing for a period, for most people unpaid income tax debt will catch up to them eventually!

Unlike some types of common consumer debts that are subject to a statute of limitations you can’t “wait out” money owing to government bodies like CRA for tax debt or student loans. These debts are not subject to the basic two-year liability limitation period that stops other creditors (such as credit card issuers) from taking legal action against you for unpaid debts under BC’s Limitation Act.

Learn More about BC’s Statute of Limitations on Debt

3. Your Employment Income and More is at Risk

Normally CRA will not start legal action until 90 days after the mailing date of your Notice of Assessment / Reassessment, and CRA’s legal warning about action being started against you normally consists of:

• 1 attempt for a verbal legal warning by telephone
• 1 written legal warning letter being sent

In some cases however, CRA is not required to inform you of actions it is taking. Whether you have advance notice or not, CRA is a powerful creditor and if you have unpaid tax debt (or even unfiled tax returns), they can implement severe collection action virtually overnight.

Other types of creditors may not be able to impact certain income sources when it comes to wage garnishments or asset seizures but CRA can resort to attachments on wages due to you from your employer (as much as 100%!) as well as:

• Self-employment or sub-contractor earnings from your clients.
• Pension and EI benefits (CPP, OAS).
• Rental or lease income from your tenants.
• Personal property such as your bank accounts, home, investment and insurance proceeds.

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– Jayvee Lester De Castro

I highly recommend Sands and Associates especially Jennifer Thom. If you have problem with you debt. She will give you the best options and support throughout the process. – Jayvee Lester De Castro – 1 day ago 

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– Jarrod Barratt

I’ve been having financial hardship for quite some time now and I am pleased I reached out to Sands & Associates recently. They were very quick to get started on helping me with relief and I never once felt judged in the process. Omer and Jennifer were very polite and informative in the process and I thank you very much for your help and support. I would recommend Sands & Associates to anybody looking for some flexibility in their financial struggles. – Jarrod Barratt – 2 days ago 

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– All the good things

I found Jennifer Thom to be very helpful and friendly going over my options to get my debt dealt with. I felt welcomed without judgment and she made my stress and anxiety lessen which was huge for me. Thank you for your help and I look forward to a new future where I can be in control and not worried about how I’m going to survive debt. All the best. Will recommend. – All the good things – 2 days ago 

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– Saba N.

Sandra was amazing from start to finish with my consumer proposal. From answering questions and getting back to me in a timely manner when I knew she was very busy, the process was quick and painless. Paying this off will be great and then I can build up my credit again! Thanks again, Sandra ♥️ – Saba N. – 2 days ago 

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– Ali D

I went to Sands & Associates because I was overwhelmed with my debt and had no idea what to do. Camille helped me set up my consumer proposal, and honestly, she made the whole process so much easier than I expected.

She explained everything clearly — what a consumer proposal is, how it works, what my monthly payment would look like, and what debts would be included. She never made me feel embarrassed or judged, just supported.

Because of her, I finally feel like I have control over my finances again. She walked me through every step, answered all my questions, and made sure I fully understood what I was signing up for. I’m so relieved and grateful.

If you’re thinking about a consumer proposal or just don’t know where to start with your debt, talk to Camille. She’s patient, caring, and really knows what she’s doing. Highly recommend! 🙌 – Ali D – 2 days ago 

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– Shubham Batra

I had an exceptional experience with Sands & Associates during one of the most stressful periods of my life. I was overwhelmed, anxious, and unsure of where to turn, but the team treated me with genuine care and understanding from the very first moment.

Helen was absolutely amazing, patient, compassionate, and incredibly knowledgeable. She made everything easy to understand and helped me feel supported at every step. Hashan was also extremely helpful and kind, always quick to respond and guiding me with professionalism and empathy.

Thanks to both of them, I finally felt relief and clarity during a really difficult time. I’m truly grateful for their support and highly recommend Sands & Associates to anyone who needs trustworthy help and real compassion. – Shubham Batra – 2 days ago 

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– Emilee Stonehouse

I am very happy I got to work with Sand & Associates. It has been making life so much easy dealing with the debt I had. Plus working with Dana, and everyone there has been a delight to move things forward and easier. Thank you Sands & Associates! – Emilee Stonehouse – 3 days ago 

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Great and quick communication
Selina helped me with my case.
Was so stressed, quick responses from her helped me calm down.
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– Jenna Sullivan

Working with Carolyn was an absolute relief. From our very first conversation, she made what could have been a stressful situation feel manageable and even hopeful. She explained everything clearly, answered all my questions with patience and understanding, and made sure I felt supported every step of the way. Her professionalism and compassion made a huge difference, and I’m incredibly grateful for her help. I would highly recommend Carolyn and Sands & Associates to anyone who needs guidance and wants to feel truly cared for through the process. – Jenna Sullivan – 4 days ago 

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– Deep Brar

I can’t thank Sands & Associates enough, especially Jagdip Dial, for helping me through one of the most stressful times in my life. I was buried under debt and didn’t know where to turn, but Jagdip treated me with genuine kindness and respect from day one.

He walked me through every detail of the consumer proposal process, explained everything clearly, and never once made me feel judged. Because of his patience and guidance, I finally feel like I can breathe again and start rebuilding my life with confidence.

If you’re struggling with debt and feeling hopeless, please reach out to Jagdip and the team — they truly care, and they’ll help you find a way forward. – Deep Brar – 4 days ago 

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4. Tax Debt Forgiveness is Possible

There is hope for those dealing with tax debt! Contrary to what many Canadians may believe, if you find yourself facing an unmanageable CRA debt there are in fact two solutions that can allow you to have virtually all types of CRA debts forgiven/written-off, including income taxes, business GST and more – in addition to any other consumer debts you may have.

Both options can effectively help you deal with your debts and stop actions such as wage garnishments and accruing interest and penalties:

• Consumer Proposals: A unique consolidation and settlement solution that allows you to cut your consolidated debts down to an amount you can afford to repay, with the unpaid balance written-off by your creditors. No borrowing is required, and no further interest charges are applied.
• Bankruptcy: If your situation leaves you unable to afford any meaningful repayment towards your debts, filing for bankruptcy can allow you to have full forgiveness for virtually all your debts. The process often lasts as little as 9 months and is generally quite private and straight-forward.

In Canada, these debt management strategies are accessible only by working with a qualified Licensed Insolvency Trustee. There is no cost to connect to discuss your situation and evaluate all your options, and no referral is necessary.

Additionally, BC residents can get help from a qualified Licensed Insolvency Trustee and request services and support remotely, without needing to leave the comfort and convenience of home.

Get your plan to be debt-free, connect with a caring, non-judgmental debt help professional from Sands & Associates – book your free confidential debt consultation today.

The post 4 Facts About Tax Debt – Where to Get Tax Debt Help appeared first on Sands & Associates.

If you have received correspondence indicating you may need to repay some, or all the emergency benefits received, or you are worried you may need to repay these benefits, read on to learn about what you can do if you are unable to afford repayment.

About Canada Emergency Response Benefit (“CERB”) Repayments

There are a few scenarios that could result in you returning or being required to repay the Canada Emergency Response Benefit you previously received:

• You resumed your employment earlier than anticipated
• You received retroactive pay from your employer
• You received CERB via both Employment Insurance (Service Canada) and Canada Revenue Agency (CRA) for the same period
• You were not eligible to qualify

From discussions with our clients thus far, confusion over the minimum amount of income needed to qualify for CERB is emerging as a prevalent cause for potential repayment. The main requirement of $5,000 of income earned either in 2019 or in the 12-month period prior to receiving CERB payments appears to not have been widely understood.

We’ve heard from self-employed individuals who mistakenly believed that their “gross income” (i.e. before deducting business expenses) was the key metric to qualify. Subsequently, some individuals have found that their “net income” (i.e. after deducting business expenses) did not exceed $5,000 which made them ineligible to receive CERB payments.

In addition, it’s important to understand that there are certain types of income that are excluded in the qualifications criteria for CERB such as investment income, pension income, Canada Child Benefit, and others.

The Canadian Government took a deliberate approach of prioritizing speed of issuing payments above performing checks to ensure eligibility. The result is that an unknown amount of CERB was issued to individuals who may not have met the qualifying criteria and CRA is now examining each case to see if repayment is warranted, several months after the final cheques were issued to Canadians.

What Should I Do if I Have to Repay CERB?

Finding out that you may have to repay CERB, or any other unexpected debt, can feel overwhelming and incredibly stressful, particularly as most people do not have the ability to simply repay an unanticipated balance outright. CERB was intended to provide a short-term replacement of income during the COVID-19 pandemic to cover immediate living expenses – it’s no surprise that just about everyone we speak to spent these funds in the month they were received to cover the necessities of everyday living.

Although Canada Revenue Agency has begun sending letters that include a request to repay ineligible CERB payments, they have stated that they:

• Will have flexible payment arrangements, determined on a case-by-case basis.
• Will not charge penalties or interest on repayments, “where errors were made in good faith” – unlike with other types of government debts.

Learn About Other Types of Government Debts, and Having Them Forgiven

If you have discovered that you must repay CERB amounts received but are unable to repay the full amount you owe immediately, you may wish to contact CRA to discuss repayment arrangements that are manageable for your specific situation. You can reach a CRA representative about a repayment plan at: 1-800-959-8281 (9AM-5PM – local time).

If you are concerned about the impact of having received CERB on your taxable income for 2020, it is important to know that taxable amounts will be adjusted if repayments are made, regardless of the reason for the repayment.

What if I Can’t Repay my CERB?

If you find yourself in a position where you are unable to repay CERB there are a few key points to be aware of historically when it comes to CRA balances owing:

• Although CERB repayments are still very new, we anticipate that it will be treated the same as other government debt that are not considered debts that will expire under BC’s Limitation Act (the provincial statute that limits the time in which a creditor may take legal action against you).
• Attempting to avoid outstanding CRA balances by non-filing of income tax returns is not an effective long-term strategy.
  • If you have unfiled income tax returns CRA may resort to actions such as placing holds on your bank account or issuing “arbitrary assessments” of your tax returns, creating tax debt based on estimates of your income.
• Besides repaying the balance in full, accessing legal debt resources such as a Consumer Proposal or bankruptcy working with a Licensed Insolvency Trustee is the only method CRA will accept to negotiate or forgive government debts.
  • It is the professional opinion of many Licensed Insolvency Trustees across Canada that “honest but unfortunate” CERB repayments will be classed as dischargeable (forgivable) debt, as is the case with most types of government debts.

How Does the Government Collect on Debt?

CRA is a forceful creditor who can quickly take steps to collect on unpaid debts that are more difficult for other types of creditors access. Common remedies that CRA may apply when collecting on government debts may include:

• Wage garnishment
  • Garnishments can be applied to many types of earnings, not just employment income
• Seizure of future income tax refunds
• Seizures or holds on bank accounts
• Registering a lien on your home or other property

Learn More About Wage Garnishment, and How to Stop it

If you are feeling the stress of debt or pressured to find a solution, understand that you are not alone. A Licensed Insolvency Trustee can help you assess your overall situation and options that are available to you that can help you effectively eliminate virtually all types of debts and move forward with your life. When you connect with a Sands & Associates representative we will take the time to understand your concerns and goals and offer non-judgmental, caring support throughout the process.

In Canada Licensed Insolvency Trustees are the only debt help professionals fully empowered, qualified, and endorsed by the federal government to assist individuals with legal debt help services.

Solutions to Manage Government Debts

Many people are surprised to learn that they have rights and remedies available to them that can allow for legally reducing or fully forgiving even government debts. In addition to options that can deal with consumer debts such as credit cards, lines of credit or payday loans, debt solutions (such as those noted below) offered by Licensed Insolvency Trustees can also cover government debts, including:

• Repayment of government benefits
• Provincial, federal (and private) student loans
• Income tax debt
• Business GST and payroll debt
• ICBC debt
• Outstanding MSP debt

Consolidate with a Consumer Proposal: Consumer Proposals are a unique but little-known debt management tool for Canadians that allow you to consolidate your debt into one reduced balance with a manageable monthly payment, without borrowing, paying interest, or even added administration fees. Making a Consumer Proposal can be a powerful solution that drastically cuts your debt, with the unpaid portion being written-off by your creditors.

Declare Bankruptcy: In BC the personal bankruptcy process is very private, straight-forward and may last as little as 9 months. If you are unable to make progress towards repayment of your total debts, you may find advantages to declaring personal bankruptcy as a means of having your debts fully forgiven by your creditors.

Access Debt Help Services Online

Debt management and bankruptcy services provided by Licensed Insolvency Trustees are a designated essential service, and as BC’s largest firm of Licensed Insolvency Trustees focused exclusively on debt help for individuals and small businesses, Sands & Associates is committed to ensuring residents throughout the province can access reputable professional debt help conveniently and safely. Working with Sands & Associates, BC residents can access our full suite of services including but not limited to:

• Free, confidential debt consultations and a full assessment of all available debt options, conducted over the phone or video conferencing.
• Making a Consumer Proposal to consolidate debt without borrowing; filed, served to your creditors and completed online.
• Filing bankruptcy to gain protection from your creditors and have debts forgiven; with the full bankruptcy process being completed online.

Get started with your debt-free plan today – book your free confidential debt consultation with a qualified BC debt expert now.

This content is not intended to be specific legal advice; it is intended to be a simple guide in layman’s language to provide a basic overview only. E. Sands & Associates Inc accepts no responsibility for its use other than as intended. The law is an ever-changing body of statutes and decisions, and the reader is advised to seek legal counsel for specific matters relating to their situation. 

The post What You Should Know About CERB Repayment Debt appeared first on Sands & Associates.

Many people are surprised to learn that you can work with a Licensed Insolvency Trustee to declare bankruptcy or file a Consumer Proposal that can include government-related debts. This is due to the specialized qualifications and regulation of Licensed Insolvency Trustees, giving them the ability to help you access solutions available under Canada’s Bankruptcy and Insolvency Act.

Read on to learn more about common government debts that can be forgiven using these debt resolution methods:

Tax Debt

If you are facing Canada Revenue Agency (“CRA”) tax debt it’s important to understand that interest and penalties can compound very quickly, making even a small initial balance difficult to pay off – CRA is also a powerful creditor who can begin aggressive garnishments, which could include wage and asset seizures, virtually overnight. Furthermore, unlike many other types of debts, these government debts are not confined by BC’s Statute of Limitations, meaning that they do not expire and you cannot “wait them out”.

Outstanding debts you have with CRA can be included in a personal bankruptcy or consolidated in a Consumer Proposal. This includes balances due for personal income taxes, GST or PST, as well as corresponding interest and penalties. All accruing interest is halted, as are wage garnishments or bank account seizures that may already be in place.

A Consumer Proposal or personal bankruptcy can both effectively stop the priority nature of CRA debts and collections, reducing them to the same importance as common consumer debts such as an unpaid credit card.

Other than filing bankruptcy, making a Consumer Proposal is the only method that can be used to negotiate a reduced balance owing with CRA:

• Declaring bankruptcy can permanently write-off CRA tax debt.
• Filing a Consumer Proposal can consolidate and reduce your CRA tax debt down to what you can afford to repay, with the remaining balance being forgiven.

Learn More About Managing Tax Debts in a Consumer Proposal or Bankruptcy

Medical Services Plan (MSP) Debt

BC MSP premiums were eliminated January 1, 2020 however, if you were required to pay MSP premiums and still have an unpaid balance, this remains payable and collection actions on overdue accounts may still be taken.

MSP premiums were based on your previous years’ income tax returns. If you were behind in tax filings this may have resulted in you being ineligible for premium assistance and charged the full premium amounts. MSP’s Retroactive Premium Assistance provides adjustments for previous premiums and may be available to help reduce your balance.

Regardless of premium assistance standings, both your outstanding MSP balance and any compounding monthly interest charges can be eliminated and written-off through filing a bankruptcy or Consumer Proposal in BC.

Connect with a Licensed Insolvency Trustee from anywhere in BC without leaving the comfort and privacy of your home – book your confidential free debt consultation today.

Employment Insurance (EI) Debt

An overpayment of Employment Insurance benefits can occur from a few different causes such as application and reporting errors, or decisions made regarding insurability. The Canada Revenue Agency provides collection services for money owed for EI overpayments and if you are unable to repay the balance you may be subject to the same consequences that CRA takes for collecting tax debts.

Income garnishments as well as asset liens and seizures by CRA can occur if an EI overpayment is not repaid. You could also expect to have any tax refunds or personal GST credits you were otherwise anticipating be withheld by the CRA and applied to your balance owing.

Social Assistance Overpayment Debts

Provincially governed, social assistance overpayment debts are generally forgiven under a bankruptcy or Consumer Proposal.

Does Including Government Debts in a Bankruptcy or Consumer Proposal Mean I Can’t Access Future Benefits?

It is important to understand that even if you declare bankruptcy or make a Consumer Proposal to eliminate government debt, you will not be prevented from receiving future government benefits.

Your eligibility for EI benefits, emergency benefits, housing benefits, pensions and more will not be impacted by a prior government debt being included in or written-off as part of your bankruptcy or Consumer Proposal.

Learn About Debt Forgiveness with Personal Bankruptcy: Step-by-Step

Student Loans

Whether your student loans are private, provincial or federal, these debts and related interest charges can also be part of the debts included in a personal bankruptcy or Consumer Proposal filed in BC. Two key considerations that determine how your student loans are ultimately resolved depend on the date your studies ended, as well as the type of student loans you have.

• If more than seven years have passed since your last study date, you can be released from your government student loans using a bankruptcy or Consumer Proposal.
• In the event you have not been out of school for seven years you would get relief from making payments on government student loans during the period that your bankruptcy or Consumer Proposal is active. Once your bankruptcy or Consumer Proposal is finished you would then begin repaying these surviving debt balances (less any amounts received through your Consumer Proposal) and any accumulated interest.
  • Some people choose to continue making payments on their surviving student loans even while their bankruptcy or Consumer Proposal is in progress. This is your option.
• If only five years have passed since you last attended school, it may be possible for you to apply under a hardship provision to BC court to have your government student loans discharged like the other debts included in your bankruptcy or Consumer Proposal.
  • Under this provision your student loans may be released where you can satisfy the court that you acted in good faith in your obligation to repay your student loans, and you have experienced, and will continue to experience, financial difficulties that would prevent you from repaying these debts.
• Privately (bank) held student loans and other student financing debts will be treated as any other type of general consumer debt (such as a credit card) and can be eliminated in both a bankruptcy or Consumer Proposal.

In situations where your recent government student loans only form part of your overall debts, declaring bankruptcy or making a Consumer Proposal can still be beneficial debt options since all your other debts (tax debt, credit cards, overdrafts, etc.) may be wiped out, making the surviving student loans much more manageable.

Read More Tips for Repaying and Discharging Student Loans

ICBC Debt 

ICBC debts may be categorized in a number of different ways such as: claims, “motor vehicle indebtedness” including outstanding AutoPlan insurance payments or unpaid Driver Penalty Point Premiums, Driver Risk Premiums, unpaid fines for offences, or motor vehicle related offences under the Criminal Code such as unpaid speeding tickets.

A Licensed Insolvency Trustee can help you investigate the type of ICBC debt you have and how each may be dealt with if you decide to make a Consumer Proposal or file bankruptcy – both of these options can result in ICBC debt forgiveness or having the overall balance cut.

Most ICBC debts will be forgiven under a Consumer Proposal or bankruptcy – even in a motor vehicle accident where you are found to be at fault and ICBC pays a settlement to another party, you may still be able to get relief from the resulting debt.

There could be portions of your overall balance owing to ICBC that fall into categories of debts that can survive these processes; if your Licensed Insolvency Trustee suspects this may be the case they will (with your permission) communicate with ICBC directly to clarify how a debt is categorized and determine any portion that might survive before you commence your debt relief process.

Temporary restrictions may be placed by ICBC, such as:

• Temporary denial of license, insurance renewal or subsequent license plates:
  • During the period of your bankruptcy prior to your discharge ICBC may retain their right to prevent you from licensing or insurance (generally renewals). Some of the criteria by which ICBC may review your individual circumstances includes:
    • The circumstances under which the debt arose.
    • Whether your ICBC debt was a significant portion of your overall debt load.
    • Hardships that may result from the refusal of these renewals.
    • The impact of a refusal on your employment, education, or ability to obtain medical treatment.
      • In situations where your employment is dependent on you holding a driver’s license, your employer may be able to write an official letter to ICBC stating such – this may result in a reversal of ICBC’s decision.
• Temporary denial of access to AutoPlan monthly insurance payments, resulting in you needing to renew insurance in prepaid 3, 6 or 12-month increments.

ICBC generally will not refuse licenses and insurance after your eligible debts have been discharged through your bankruptcy, or your filed Consumer Proposal has been accepted by your creditors.

Sands & Associates Licensed Insolvency Trustee Blair Mantin discusses dealing with Canada Revenue Agency debts on Global News.

Facing an unmanageable balance owing from the provincial or federal governments of Canada can be overwhelming and stressful. While some types of government debts are simple to resolve, others involve complex and ever-changing bodies of law – it is important to find out the facts and options for your situation as soon as possible. If you are struggling, the best course of action is to contact a Licensed Insolvency Trustee to get advice about how to manage government debts, as well as any other types of debts you may have. Licensed Insolvency Trustees are the only Canadian professionals legally able to provide debt solutions to work with all creditors on your behalf; consultations are always free, confidential – and at no obligation.

Stop debt-stress and get a plan to be debt-free today. Book your free confidential debt consultation to connect with a caring non-judgmental BC Licensed Insolvency Trustee.

_{This content is not intended to be specific legal advice; it is intended to be a simple guide in layman’s language to provide a basic overview only. E. Sands & Associates Inc accepts no responsibility for its use other than as intended. The law is an ever-changing body of statutes and decisions, and the reader is advised to seek counsel for specific matters relating to their situation.} 

The post Debt Solutions for Having Government Debts Forgiven appeared first on Sands & Associates.

Local BC Licensed Insolvency Trustee and Senior Vice-President of Sands & Associates Blair Mantin joined Breakfast Television Vancouver to talk about some of the free resources he and his staff often share with their clients, and feel more people should know about when they are working on managing their debts.

Watch the clip here and read more below:

BC Debt Management Resources

1. Check Your Credit History

Although you can access your credit history and score quickly online – this comes with a fee. Whether you’re checking your credit history periodically to keep up on paperwork and stay ahead of potential inaccuracies or theft, or need to find out more about the debts you have, you can get a copy of your long-form written credit report once a year from both credit bureaus in Canada for free simply by faxing or mailing in a completed “Credit History Request Form”.

If you need to access a basic list of your credit accounts right away, you can alternatively view your “Consumer Disclosure” online.

2. Statute of Limitations

If you have old debts and you’re in a position that leaves you with no vulnerable income or assets, you may be able to “wait them out” at no cost via BC’s Limitation Act. The basic two-year liability limitation period means that if it has been two years or more since you incurred, made payment on or acknowledged the debt in writing, the creditor who is owed can no longer take legal action against you to force payment.

Although this “expiry” does not mean the debt has been forgiven, it can add a substantial layer of protection between you and your creditors. It’s important to know that some debts are not subject to this limitation period, and certain actions taken within the 2-year period can reset the clock.

Read an Overview of BC’s Statute of Limitations on Debt 

3. Stop Collection Calls

If you’re suffering non-stop debt collection calls, there is a way to stop them – a “Request for Communication in Writing Only”. This free resource under BC’s consumer protection laws gives you the legal right to require your creditors to contact you in writing only. Many people find it much easier to deal with a written collection notice than round-the-clock interrogations with collection agents, who often seem aggressive or even threatening.

Be sure to continue opening your mail regularly – just because a creditor is no longer calling does not mean they will not escalate other actions against you.

4. Consolidate Without Borrowing

Many people think if they want to consolidate their debts this can only be done by borrowing from a bank or other lender and paying the corresponding interest – this is not the case! A Consumer Proposal is an effective debt management option that allows you to consolidate your debts (from credit cards to tax debt and virtually everything in between) and cut them down to what you can afford to repay, with the unpaid portion being written-off by your creditors.

This specialized consolidation tool requires no borrowing or added interest payments, and the costs of administration are borne by your creditors – you only need to pay what you are offering them in the consolidated settlement.

Learn about Consumer Proposals in British Columbia 

5. Debt Advice

In Canada only Licensed Insolvency Trustees are granted the authority, endorsement and licensing to help consumers deal with their debts – and all Licensed Insolvency Trustees will offer you a free and confidential consultation to discuss your situation and assess your potential options to address your debts. In less than an hour you can gain insights into strategies and further resources that can allow you to stop debt-stress and get a plan to be debt-free.

To learn more about these debt management resources or connect with a BC Licensed Insolvency Trustee from the comfort of your home, book your free confidential debt consultation today.

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Debt help professionals across the country were already seeing increases in consumers needing debt help and are predicting that the current global situation will push even more Canadians towards financial hardship. If you are one of the thousands of people in BC being impacted financially, read on for some tips and insights to help navigate debt management during the COVID-19 crisis.

Blair Mantin shares financial tips to help navigate the COVID-19 crisis with CTV News:

1. Stay Informed and Aware
   • Current affairs across the country (and world) are changing daily – be sure to keep up to date with news about federal and provincial assistance measures that may impact you:
     • Federal announcements are updated here.
     • Provincial announcements are updated here.
   • Be on the lookout for scams – many Canadians are being targeted by scammers hoping to take advantage during this difficult time:
     • Always get your information from a reliable source such as official government websites.
     • Carefully review communications and offers before taking any action.
     • Be especially vigilant for phone-based scams – it’s easy and common for caller IDs to be impersonated by scammers.

2. Keep Calm and Carry On
   • Avoid panic-buying and selling.
     • Take a hard look at your budget and try to pare down non-essential expenses as much as possible to avoid overspending your available funds or relying on credit any more than you must in order to purchase day-to-day necessities.
     • Don’t be tempted to rush into selling assets or redeeming your RRSPs to pay off your debts – BC laws protect many of your assets from creditors in the event you are unable to pay your debts. The current crisis won’t last forever, and you will need those retirement funds down the road.
   • If you can’t make your debt payments and are concerned about the legal action your creditors may take, or are being pressured by collection agents, know that at this time courts across Canada are closed – meaning you cannot be sued right now.
   • Don’t put too much emphasis on your credit rating – credit scores can change dramatically in just a short amount of time and are a poor metric of overall “financial health”. Under normal circumstances there are many people who have great credit scores who are unable to obtain consolidation loans or other financing simply due to being overextended or not having enough assets to offer lenders as collateral.
     • Even consumers who get debt relief by filing bankruptcy move on and recover financially, getting new mortgages, vehicle loans, credit cards etc. often in as little as two years following the conclusion of the process.

Compare the Pros and Cons of 5 Debt Solutions

3. Take (the Right) Action
   • Communicate with any creditor to whom you are certain to miss payments. Don’t be afraid to ask for a deferral on your rent, mortgage, debt payments or otherwise even if your particular financial institution hasn’t made any public statement about their position – it doesn’t hurt to ask and find out what options you may have.
     • Only apply for the available financial relief you need and be sure you understand all terms and conditions before agreeing.
     • By deferring credit card payments, your mortgage, rent or otherwise – you are essentially adding to your overall balance – with interest. This does not mean the payment is forgiven forever, only that it is being postponed until the deferral period is over.
   • Change your bank account if you hold an account where you also owe a debt.
     • Many people are unaware that banks and other lenders have the “right of offset”, allowing them to recover money you owe them for an outstanding debt by seizing money you have in your account with them. The right of offset can also be applied to money you have in joint or business accounts, as well as accounts with an affiliated bank.
     • Your safest plan, and what we advise all our clients, is to never borrow from the same bank where you deposit your monthly income.
   • Be kind to yourself. We help people in all sorts of difficult situations that were unexpected; we know that money problems can happen to anyone at any time.
     • Don’t feel ashamed or beat yourself up that you “didn’t have savings” or “could have been better prepared” – whether divorce or separation, health issues or job-loss, there are many unanticipated “everyday circumstances” that lead people to seek debt help.

4. Reach Out for Help
   • Be sure to stay connected with family and friends even when social distancing. You are not alone, and a virtual visit can go a long way in keeping our spirits up during these challenging times.
     • Access online and telephone resources for mental health if you need additional support managing stress and anxiety, and make time for self-care in your daily routine.
   • When it comes to understanding your rights if you can’t pay your debts, how to deal with bill collections or options for debt forgiveness, connect with a Licensed Insolvency Trustee for a free and confidential debt consultation – right from the comfort and privacy of your home.
     • You may have several methods to get debt relief – some of which you may only need knowledge of to implement, such as:
       • “Communication in writing only” notices for collection agencies
       • BC’s statute of limitations on debt
       • BC’s “seize or sue” provisions
     • Licensed Insolvency Trustees are the only professional endorsed and authorized by the Canadian government to assist you with debt solutions.
       • Some of the solutions we offer can allow you to consolidate virtually all your debts (even government debts like taxes and student loans) without interest and additional fees, or have debts fully forgiven – while ensuring you are protected from your creditors.

You are not alone – we are here to help you.

Get debt help and advice from the comfort of your own home – book your free debt consultation via telephone or video conference and connect with Sands & Associates’ non-judgmental knowledgeable debt help professionals. We have a large network of local offices and are proud to serve BC residents residing anywhere in the province.

The post Debt Management Tips to Help Navigate the COVID-19 Crisis appeared first on Sands & Associates.

With this year’s tax season upon us, Senior Vice-President of Sands & Associates and Vancouver Licensed Insolvency Trustee Blair Mantin joined BT Vancouver to dispel some common tax debt myths for individuals. According to debt help expert Blair Mantin, these are 5 things every Canadian should know about tax debt.

Watch the clip here and read more below:

5 Tax Debt Myths Debunked

1. Myth: You Only Need to File if You Owe Money

There are very few circumstances where an individual isn’t required to file an income tax return – and in nearly every case it’s in your best interests to file, even if you don’t owe any extra money. Besides wanting to claim a refund (and fulfilling what Canada Revenue Agency (CRA) essentially views as your civic obligation), you’ll also need to file in order:

• For you or your spouse to receive credits such as GST, Canada Child Benefits, GIS.
• To create contribution room in an RRSP.
• To carry forward or transfer tuition amounts.

Having unfiled returns can also create challenges for you in situations where you need to prove your income, such as applying for credit or housing.

2. Myth: Incorporating Fully Protects Business Owners

Debts a sole proprietor or partnership accumulate are payable by their owners, since there is no distinction between business and owner. While corporations may protect owners from their debts to some degree, by being a director of a corporation there is still a personal liability created for certain debts you cannot avoid becoming personally responsible for, such as GST and payroll remittances, wages and debts you have personally guaranteed (i.e. committed to pay in the event the company cannot).

It’s extremely important for business owners to understand their responsibilities for tax compliance and what they need to file with CRA; CRA debt is one of the top reasons we see business owners needing debt help.

 Learn More About Debt Solutions for Business

3.  Myth: Tax Debt Can Expire

Although BC’s Limitation Act provides a two-year basic liability limitation period that prevents creditors from taking legal action against you for unpaid debts – debts owing to government bodies like CRA (or student loans) will not be subject to this limitation.

Consumers who don’t have any income may be able to avoid balances for some time, but for most people their unpaid tax debt will catch up with them eventually.

4. Myth: Only Employment Income is Seizable

Unlike with many other types of consumer debt, CRA has powerful collection methods and can begin a wage or bank account garnishment virtually overnight – and this isn’t restricted to employment income alone. In addition to wage garnishments placed with your employer, CRA may also resort to garnishing:

• Self-employment earnings (they may direct the notice to pay to your clients).
• Government income including CPP, OAS, EI benefits.

In addition to income, CRA can also place liens on your personal property.

Read an Overview of Wage Garnishment in BC

5.  Myth: You Can’t Have Tax Debt Forgiven

Licensed Insolvency Trustees are often contacted by individuals, business owners and even other financial professionals who are facing balances owing to CRA that they are unable to repay but think can’t be written-off for good. If you are looking for a solution to unmanageable and unpaid balances to CRA for income tax, GST, payroll or business debt the good news is that there are two options that can allow you to have these debts forgiven:

• A Consumer Proposal – consolidate and reduce virtually all your debts to an amount you can afford to repay, the unpaid portion is written-off by your creditors.
  • This is the only method to negotiate tax debts that CRA will accept.
• Bankruptcy – get full forgiveness for virtually all types of debts.

These are the only two methods of extinguishing government (and of course general consumer) debts in Canada and are available solely by working with a Licensed Insolvency Trustee.

Learn more about legislated debt solutions that can allow you a financial fresh start by connecting with a non-judgmental Sands & Associates representative in a local BC office – book your confidential free debt consultation now.

The post 5 Myths about Tax Debt appeared first on Sands & Associates.

Contrary to popular belief, the truth is that filing a bankruptcy in Canada actually provides protection for your assets and income. Read on to learn more about how bankruptcy protects your assets. 

What is a Stay of Proceedings in Bankruptcy?

Canada’s Bankruptcy and Insolvency Act states that when a person formally files for insolvency (the beginning of the official bankruptcy or Consumer Proposal process), no creditor has any remedy against the person or their property. This means that creditors cannot start or continue any actions to recover the debt balance they are owed, and the stay of proceedings in a bankruptcy or Consumer Proposal is a powerful measure to provide protection from creditors, even government creditors like Canada Revenue Agency.

• Your bankruptcy filing triggers the stay of proceedings, and this legally prevents your creditors from continuing to ask you for payment, from continuing collections or court action, and from seizing your assets, including your bank account or wages.
• In situations where creditors may have been about to begin, or have already begun serious debt collection methods, filing bankruptcy can protect assets that may otherwise be at risk from creditors.

Without being shielded by bankruptcy laws, when a person is unable to pay their debts, they are often quickly subject to collection actions from their creditors, which can lead to creditors attempting to seize assets and even garnish wages. For people who have been harassed with phone calls, texts or letters asking for payments or past due debts by creditors or collection agents, their bankruptcy’s stay of proceedings is always a welcome relief.

Do I Lose All my Assets by Filing a Bankruptcy?

Contrary to what you may have heard and what many people mistakenly believe, most people who file bankruptcy actually keep all their assets. Here’s why:

When you enter into bankruptcy, provincial laws automatically give you entitlement to keep certain assets – these are often referred to as ‘exempt assets’, meaning that they are protected in the event of a bankruptcy.

In British Columbia, the law that gives individuals these exempt (protected) asset allowances is called the “Court Order Enforcement Act”. Each province has its own exemption allowances; in BC the bankruptcy protected assets are:

• Household Goods and Effects
  • Up to a $4,000 value, based on garage sale value (not replacement value)
• A Vehicle, or Equity in a Vehicle
  • Up to a $5,000 value; or
  • Up to a $2,000 value if you are behind on child or spousal support payments
• Home Equity
  • Up to a $12,000 value in Greater Vancouver and Victoria; or
  • Up to a $9,000 value elsewhere in BC
• RRSPs
  • Up to an unlimited value
    • Except for contributions made in 12-month period prior to filing bankruptcy. Note, transfers between RRSP funds are not the same as contributions.
• Clothing and Medical Aids
  • Up to an unlimited value
• Work Tools (Tools of the Trade)
  • Up to a $10,000 value

It’s important to know that even if you have assets that are worth more than these allowances, you do not necessarily have to give the asset up in bankruptcy. There are a few potential avenues that would allow you to keep the assets. Here are two examples:

Repurchase of Asset in Bankruptcy

The non-exempt value of your asset may be paid into your bankruptcy estate, allowing you to retain possession of the asset.

$7,000 – Appraised Value of Vehicle Owned Free and Clear

-5,000 – Exemption Allowance for Motor Vehicle

$2,000 – Balance Paid Over 9 Months

File a Consumer Proposal

Filing a Consumer Proposal is the number one alternative to personal bankruptcy in Canada. In a Consumer Proposal your assets are not impacted, which can make it an attractive option for someone who may otherwise have a significant amount of non-exempt equity in an asset.

• Consumer Proposals work by consolidating your debts into one settlement and offering your creditors a partial repayment of the debt – the amount you can afford to repay.
  • Your debts may be cut down to as little as 20-50% of the balance with no interest charges and no requirement to surrender assets.
• A Consumer Proposal is not the same as bankruptcy, although it does offer an individual the benefit of the stay of proceedings when it comes to shielding you from creditors.

Compare Your Debt Options

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

How Does Bankruptcy Provide Income Protection from Creditors?

Because a bankruptcy filing will act as a barrier between you and your creditors, your income remains protected from wage garnishments and bank account seizures. Even if a creditor has already begun garnishing your income or has frozen your bank account, filing a bankruptcy will remove the ongoing garnishment or freeze.

This applies to virtually all creditors, including Canada Revenue Agency. In general Family Maintenance Enforcement Program collecting on child or spousal support payments is one of the few creditors who can continue a wage garnishment despite a bankruptcy filing.

Throughout the period of your bankruptcy income you earn would continue to go directly to you via your employer, pension provider etc.

The post How Bankruptcy Protects Your Assets appeared first on Sands & Associates.

Blair Mantin, Vancouver Licensed Insolvency Trustee and Vice-President of Sands & Associates joined Global News to talk about debt solutions BC residents can access that they might not be aware of.

Watch the clip here, and learn more below:

4 Resources That Can Help You Deal with Debt:

1. Statute of Limitations on Debt

We often help people who are dealing with old debts that they just haven’t been able to pay off. What a lot of people don’t know is that there is a Statute of Limitations on Debt.

In the province of British Columbia, the Limitation Act sets out a limitation period which caps the length of time people are able to take action against you (i.e. to sue) for a debt owing.

• BC has a two-year basic liability limitation period, which is two years after:
  • The date an unsecured debt was incurred;
  • The last payment against it was made; or
  • The last written acknowledgment of the debt by the person who owes the money
• What this means is: If it has been two years (or more) since you incurred the debt, made a payment on the debt, or acknowledged the debt – the creditor who is owed the money can no longer take legal action against you to force you to pay.
  • Timing is crucial to this resource – certain actions can restart the two-year period.
  • Be very careful about making ‘partial’ or ‘good faith’ payments – no matter how small, any payment can reset the two-year clock!

Caution: Not all debts will be subject to this limitation period, such as:

• • Debts that you have already been sued for and are required to pay;
  • Debts owing to government bodies like Canada Revenue Agency or student loans;
  • Arrears of child or spousal support.

2. Request for Communication in Writing Only

If someone is going to “wait out” the two-year Statute of Limitations period, or they’re suffering endless collection agent and debt collector calls, a Request for Communication in Writing Only is a great resource.

• Consumer protection laws in BC give consumers the legal right to require that your creditors contact you in writing only.
• Most people find it much easier to deal with a written debt collection notice, rather than having to react in real-time to a collection agent who may be using very aggressive and even potentially threatening language.
• To request that a debt collector contact you in writing only, you will need to:
  • Notify the collection agency in writing;
  • Send your written request using a method that gives you proof of its delivery (i.e. Fax, registered mail, or email);
  • Keep a copy of the request for your records.

Caution: Make sure you open your mail regularly! Just because creditors are no longer calling doesn’t mean that they are taking no action at all.

3. Access your Credit Report (for Free!)

Most people are aware of whether they are paying their bills on time or not, but in our experience, very few people periodically check their credit report to ensure accuracy until they’re actually faced with a situation of needing to borrow money.

• If there’s a problem on your credit report (such as identity theft, or even just a clerical error), it will take time to correct. You will need to open an investigation with each bureau and provide relevant documentation to get your report corrected.
• If you’re trying to secure financing (like a mortgage or car loan) you may not have planned for a delay of weeks or months to correct an inaccuracy on your credit report.
• You are entitled to get a copy of your long-form written credit report once a year from each of the credit bureaus in Canada.
  • Credit History Request Forms can be found here

Quick Tip: If you need to see a list of your credit accounts (debts) immediately, you can review your “Consumer Disclosure” online, then later request your full Credit History Report.

4. Government Debt Forgiveness

Unlike most debts, you can’t “wait out” the government if you owe them money. Many Canadians mistakenly believe that there’s nothing that can be done to legally write-off government debts, but there are in fact two ways to accomplish this.

• If you are trying to deal with government debts such as balances owing for income taxes, business GST, federal and provincial student loans, or even MSP and ICBC debts – there are two federally legislated debt solutions that can wipe out these government debts:
• Filing a Consumer Proposal: A Consumer Proposal allows you to consolidate, reduce and settle your debts for less than what you owe. Consumer Proposals are the only method of debt negotiation that government-body creditors will accept to reduce your debts, besides a personal bankruptcy.
• Filing a Personal Bankruptcy: No creditor or other party can prevent you from seeking the protection of personal bankruptcy legislation should you be unable to repay your debts in full.

Caution: Only a Licensed Insolvency Trustee can help you deal with government debts; these two specialized debt management options are only available with the help of bankruptcy and debt consolidation experts – Licensed Insolvency Trustees.

At Sands & Associates we truly believe that “Knowing is Not Owing”!

To learn more about these resources, and other solutions to deal with debt, meet with a local Licensed Insolvency Trustee for a free debt consultation. It may take less than an hour of your time to find your best debt solution.

The post 4 Debt Help Resources Everyone Should Know About appeared first on Sands & Associates.