As consumers face tough financial demands, Sands & Associates, BC’s largest firm of Licensed Insolvency Trustees focused exclusively on providing debt help services to individuals, is seeing a substantial increase in the number of BC residents seeking professional debt advice and debt relief support. President of Sands & Associates, Licensed Insolvency Trustee Blair Mantin joined Global News to share more on consumers’ growing financial concerns, and what you should know if you’re a BC resident facing a debt problem.

Watch the clip here and read on to learn more about what to watch for across the province.

Carrying Consumer Debt? Here’s the Latest You Should Be Aware Of

Creditors Are Significantly Ramping Up Collection Tactics

In 2020 BC courts were closed and many creditors were extending payment deferrals to their customers.  It’s safe to say that this leniency has now passed and it’s back to ‘business as usual’. In 2023 so far, creditors seem to be taking a noticeably more aggressive approach to collections, with legal actions increasing even for relatively low account balances.

• Individuals owing as little as $5,000 are now finding themselves being sued for payments; in previous years this was generally a risk only where a debt exceeded $20,000.
• Local Sands & Associates Licensed Insolvency Trustees are noticing a trend of individuals seeking urgent debt help because creditors owed these smaller balances have taken them to court and obtained wage seizure orders which often make it impossible for an individual to cover their regular monthly costs of living.

What Consumers Should Know: If you are facing a wage garnishment (or the threat of one) by a creditor, a Licensed Insolvency Trustee can help you make a Consumer Proposal or alternatively file personal bankruptcy, both of which will immediately stop this creditor action. 

Learn more about Wage Garnishments and How to Stop a Creditor with a Garnishment Order

The Number of Consumers Turning to Consumer Proposals is Growing Substantially

A Consumer Proposal is a unique type of legal debt consolidation and an alternative to both personal bankruptcy and debt consolidation loans. Working with a Licensed Insolvency Trustee, an individual will make an offer to their creditors to repay the portion of their debt they can afford (often as little as 20-30 cents on the dollar), with no interest charges and no added administration costs.

The Office of the Superintendent of Bankruptcy (the Federal branch that oversees all insolvency filings) released recent statistics which illustrate how popular Consumer Proposals are becoming for cash-strapped consumers seeking to consolidate and cut their debt:

• The number of Consumer Proposals filed in BC in February 2023 compared to February 2022 increased by a whopping 38%. (And the number of bankruptcies filed over the same period declined by 8%.)
  • A Consumer Proposal is now the option chosen by 84% of people who file formal insolvency proceedings, which is a huge jump from 62% of customers choosing this option in February of 2020
• Overall, there was a year-over-year increase of 28% in the total number of BC residents filing formal insolvency proceedings to deal with their debts, which indicates that although many people are struggling, they are increasingly finding relief by restructuring their debts to offer partial repayment, instead of filing for bankruptcy.

What Consumers Should Know: You do not need to be delinquent on your payments to consider a debt restructuring solution like a Consumer Proposal – also, know that bankruptcy is not your only option for debt relief!

Learn more about Consumer Proposals and Whether a Consumer Proposal Could Be Right for You

Canada Revenue Agency (CRA) is Offering More Time to Pay Balances

Prior to 2020, CRA would typically accommodate a six-month payment plan for individuals to repay a balance owing in full, and it was rare for leniency to extend beyond that time, or in getting relief from penalties and interest charges. Now in 2023 CRA has extended this period to as long as 12 months in cases where they believe the six-month plan would create hardship for the individual.

• Despite this increased repayment timeline, however, for many individuals this is still not enough, especially as another trend contributes to the significant growth in Consumer Proposals – people being pursued for a CERB overpayment, with no means to afford to repay the debt within 12 months, even if the interest and penalties are waived.

What Consumers Should Know: If you have an unmanageable balance owing to CRA a Consumer Proposal is the only means of negotiating your debt to CRA (or having it forgiven with bankruptcy). Also, if CRA has begun collections against you, other than paying the debt in full, only a Licensed Insolvency Trustee can help you with options to get them to stop.

Learn more about What Happens if You Can’t Afford Your CERB Repayment

“Buyer Beware” – Impact of Unlicensed Debt Consultants Increasing in BC

Consumer warnings are being echoed by many Licensed Insolvency Trustees as a resurging presence of unlicensed ‘debt advisory’ firms have begun attracting BC consumers. These unlicensed and largely unregulated agents typically take advantage of vulnerable consumers, collecting money from people seeking debt help these agencies simply can’t provide. Here’s how it often works:

• An individual reaches out for help and is charged fees in the range of 1-2% of their total debt. The advisor explains how a Consumer Proposal can work to help them, and after they’ve collected their fee (often over two or three months) the consumer is eventually introduced to a Licensed Insolvency Trustee – the only professional who can actually file a Consumer Proposal.
  • This is completely unethical as every Licensed Insolvency Trustee in Canada offers a free, confidential consultation to review your financial options – and most, including Sands & Associates – will file a Consumer Proposal for you with no up-front payments whatsoever!

Despite advertising promises and even A+ BBB ratings and positive reviews, there is no such thing as ‘government debt grants’ or ‘programs’ beyond what is available to consumers by working with a Licensed Insolvency Trustee.

• When seeking debt advice, you should always ask “Are you a Licensed Insolvency Trustee?”
• If you’re not dealing with a Licensed Insolvency Trustee, it’s highly likely you are unnecessarily paying money that is providing no value, and you may be the victim of a growing scam in BC.

What Consumers Should Know: Licensed Insolvency Trustees are Canada’s ONLY regulated, endorsed, and qualified debt help professionals. You do not need a referral to get safe, free, and confidential advice from a Licensed Insolvency Trustee – simply contact a Licensed Insolvency Trustee local to your province. It should never cost you money to find out what your options are!

Learn about resources and options to help you become debt-free faster – book your free, confidential consultation with a non-judgmental debt expert today.

The post British Columbians Struggling with Unmanageable Debt as Personal Insolvencies Surge appeared first on Sands & Associates.

Choosing a Debt Relief Professional – What to Know

Whether the debt solution you choose is formal or informal, there are different types of service providers offering assistance in how to deal with your debt, and you need to ensure you connect with a trustworthy expert. Here are some key tips to help you:

1. Licensed Insolvency Trustees are Canada’s Only Fully Regulated and Qualified Debt Help Professionals

Licensed Insolvency Trustees hold a unique designation and are the only professionals in Canada completely regulated, endorsed and authorized by the federal government to help people with formal debt solutions, and provide you with a complete range of debt options.

• Working with a local Licensed Insolvency Trustee in BC allows you to access debt relief solutions from debt experts the federal government has fully empowered and deemed qualified.
• One of the main services a Licensed Insolvency Trustee provides is in helping people understand their options for dealing with debt. Connecting with a Licensed Insolvency Trustee allows you to get impartial expert advice at no cost, so you can make informed decisions about how to move forward.
• If you decide to pursue a formal solution such as a Consumer Proposal or personal bankruptcy, a Licensed Insolvency Trustee would also work with you through the process.

It’s a given that consumers want financial advice and services from qualified professionals; unfortunately many aren’t aware that:

2. Credit Counsellors Aren’t Legally Required to Have ANY Special Training

‘Credit counsellor’ is not a professional designation; anyone can call themself a credit counsellor and offer a variety of services under this umbrella term. This might mean everything from free financial literacy resources to debt management plans with program fees.

• Many people who advertise their services as credit counsellors do hold an accreditation and have training from a national credit counselling organization, but consumers should understand these are self-regulated and do not have any official government oversight, approvals, or qualification standards.
• If you decide to work with anyone in this capacity, ask about and check into the organization or agent’s credentials; at minimum you should ensure they are part of an association in good standing.

Common Pieces of Debt Advice to Think Twice About – Learn More

3. Informal Debt Repayment Programs are Not Widely Regulated

Debt management arrangements such as credit counselling programs, debt settlement plans, debt reduction, debt pooling (and more) offered by agents, companies or organizations that are not Licensed Insolvency Trustees are considered ‘informal’ solutions. These do not fall under any national government-regulated industry and are not a legal process.

Essentially anything other than the legal debt options available through a Licensed Insolvency Trustee is left to provincial / territorial government responsibility. BC’s current laws leave many gaps that don’t provide adequate protection for consumers using informal debt management services.

• Organizations from out of province are able to easily target BC consumers, and many businesses will find ways to charge fees that get around the provincial licensing and guidelines in place, just to name a few common issues.
  • Always review proposed contracts or agreements in detail, and don’t commit to anything if you feel pressured, uncomfortable or unsure.
  • Be aware that fees charged can vary and ‘program’ costs and fees may add up quickly.
  • Understand there is no such thing as a free debt management service, even declaring personal bankruptcy has a minimal administrative cost.
• Consumer Protection BC is tasked with licensing and inspecting complaints in a variety of sectors, including debt collection and debt repayment businesses.
  • In BC anyone who charges a fee to negotiate with a creditor on your behalf needs to be licensed with Consumer Protection BC, including those operating as credit counsellors.

It’s not uncommon for Licensed Insolvency Trustees to work with people who were unfortunately unaware of the differences in options and representatives, finding themselves set back after pursuing an unsuccessful informal debt management strategy. Not only can this be a significant loss of time and money, but it can also feel incredibly discouraging.

Debt Relief Solutions – What to Know

Debt often feels like an impossible struggle, and it can seem overwhelming trying to determine what to do next. If this sounds familiar, know that you are not alone – and that debt is a problem like many others in that it does have solutions!

4. Canadian Consumers Have Two Different Legal Options for Debt Relief and Forgiveness

In Canada there are two different options that can allow you to formally deal with your debt and have some, or all, of your debt forgiven.

• Full debt forgiveness is possible by filing for personal bankruptcy.
• Consumer Proposals are a different solution that allow you to consolidate your debt into one (usually monthly) payment and cut the total down to what you can afford to repay.
  • Your creditors will forgive and write-off the unpaid portion, which might range anywhere from up to 50-80% depending on your personal circumstances.

How Much Debt will a Consumer Proposal Eliminate? Learn More

To access either of these debt relief options to manage and/or write-off your debt you will need to work with a Licensed Insolvency Trustee. In addition to dealing directly with creditors on your behalf, these options will also:

• Freeze your debts, including ongoing interest.
• Stop creditors from pursuing you for payments, even lifting wage garnishments and bank account holds.
• Give you a clear plan and peace of mind as to when and how your debt will be paid off for good.

Legal debt relief gives you the chance to have debts entirely forgiven, or consolidated and cut down to what you can afford to repay, and:

5. Virtually All Types of Debt Can Be Covered, Even Government Debts

From consumer and business debts like credit cards and lines of credit to income taxes, business GST, student loans and beyond, it is possible to manage and get forgiveness for basically all types of debt by doing a Consumer Proposal, or by declaring bankruptcy.

• You do not need to ask your creditors’ permission to file bankruptcy.
• Once accepted by the majority of your creditors (by dollar value), a Consumer Proposal will be legally binding on all your creditors.

Be aware that informal debt services are limited in the types of debts they can attempt to help you with. Government creditors and many others simply won’t get involved in voluntary agreements or plans proposed by debt repayment agents and credit counsellors.

• Informal debt relief services have no legal standing to compel creditor participation, and although most will refrain from taking any collection activities unless you miss payments, creditors can withdraw from informal plans any time.
• With informal debt management plans creditors are still free to pursue legal action against you.

6. There is No Such Thing as ‘Government-Sponsored’ Debt Programs or Grants

Some debt settlement agents and credit counsellors have been known to aggressively sell their services, making unrealistic promises and guarantees, and misrepresenting their abilities. Advertisements can be extremely misleading; be on guard before you ‘sign up’ and don’t be fooled by companies or agencies that claim they can:

• Help you access government-led, -run or -endorsed debt programs or grants.
  • Beyond the two legal options (Consumer Proposals, bankruptcy), these simply don’t exist.
  • You do not need to pay for any kind of referral to speak with a Licensed Insolvency Trustee, you can simply reach out on your own.
  • Ask “Are you a Licensed Insolvency Trustee?”; it is illegal for companies to claim they can do a Consumer Proposal or bankruptcy for you if they don’t employ a Licensed Insolvency Trustee.
• Guarantee a reduced debt settlement or promise any type of loan or borrowing.
• Quickly repair your credit score.

Consumer Proposals VS Credit Counselling in BC – Learn More

Safe Debt Help and Free Advice

Despite all the information covered here, there is still more to know about consumer debt remedies and the unregulated debt management industry. Uncertainty about what to do about debt, where you can go for help, or even if your situation has a ‘better option’ can add layers of pressure to an already stressful situation. Please know that you are not alone and that you can:

7. Get Free Debt Advice by Connecting Directly with a Licensed Insolvency Trustee in your Province

The best place to safely get accurate debt advice is from a Licensed Insolvency Trustee – period.

Licensed Insolvency Trustees are the only debt management professionals formally qualified and overseen by the government. This offers consumers the security of knowing there is a mandatory adherence to the law and high standards of practice in all aspects of services and operations.

• Sands & Associates serves residents across BC and you can reach out directly to request a confidential consultation and get free one-on-one advice from a caring local representative.
  • If you’re outside BC you can find a Licensed Insolvency Trustee in your province here.
• You absolutely do not need a referral to be connected with a Licensed Insolvency Trustee, and we would never recommend you pay for debt advice.

We’ll help you assess your situation, understand all your formal and informal options, and evaluate which might be suitable to meet your needs and goals. If you decide to move forward with a formal solution together, we will continue working with you throughout the process.

8. Everyone Deserve to Live with Dignity and without the Overwhelming Stress of Debt

Despite all efforts and intentions, people sometimes need a fresh start to move forward. Self-blame, embarrassment or shame about being unable to manage debt is common, but the reality is that genuine mistakes, or events outside our control do happen, making it difficult (if not impossible) to payoff debt. Your debt and the circumstances that caused it do not define you.

Many people are unsure about when they should consider getting professional debt help and if any of these things sound familiar:

• You think you might have a debt problem
• You’re experiencing any type of debt-stress
• You’ve been looking for ways to manage your debt more effectively
• You worry about escalating creditor action

– you ‘qualify’ to connect with a Licensed Insolvency Trustee to talk about your situation, debt-free goals, and get free impartial advice.

You don’t have to carry the endless worry or overwhelming stress of debt. A Licensed Insolvency Trustee can offer guidance and a personal debt-free plan so you can live your best life, debt-free.

Get started with a debt-free plan right’s right for you. Book your free confidential non-judgmental consultation with a caring local Sands & Associates expert today.

The post 8 Things Canadians Should Know About Debt Relief Services appeared first on Sands & Associates.

BC Licensed Insolvency Trustee Blair Mantin joined Global News to break down some of the key facts to know about wage garnishment, and what you can do if you’re a British Columbian facing a debt problem.

What Will Happen if I Can’t Make my Debt Payments? Who Can Garnish my Wages in Canada?

If you miss making required debt payments, you could anticipate that your creditor(s) might take steps such as charging you fees for defaulting on your payments and reporting the defaults on your credit history. Unpaid creditors might also increase your interest rate and later engage a collection agent to aggressively pursue you for payment.

If these steps are not successful, creditors may pursue legal remedies, and the outcome of a successful court action may result in a wage garnishment, where a portion of your wages will be paid directly to your creditor until your debt is repaid. Please note that fees, penalties, interest and legal costs may also be added to the total amount you have to pay back.

Wage garnishment may be undertaken by a creditor provided they follow the necessary processes, which will vary depending on who the creditor is, including but not limited to:

• Common creditors like banks, credit card companies and collection agencies.
• Canada Revenue Agency (“CRA”) collecting money owed for many different programs including tax debt, student loans, and EI overpayments.

How Much of my Income Can a Creditor Take?

Many people don’t learn that a wage garnishment is starting until their payroll department lets them know they have received the notice, giving them little time to react or prepare for this income cut.

In most cases in BC 30% of your net income may be garnished or seized from each paycheque. There are notable exceptions to this; and a creditor may apply to have the amount of the seizure increased:

• Provincial limits on how much income may be garnished do not apply to Canada Revenue Agency.
• 100% of income earned through self-employment (such as sub-contractor wages) may be garnished.
• Government benefits such as CPP, OAS, GIS, Employment Insurance and Social Assistance are considered exempt and cannot be garnished, except where the debt is owed to CRA or Family Maintenance Enforcement Program.

In addition to wage garnishment, creditors may also be able to collect on their debts by seizing money from your bank account. Unlike limits on how much income can be garnished, there is no cap on seizing money in a bank account to cover debt balances, and income that may have been exempt won’t be protected once it’s deposited in your bank account.

How Can I Stop a Wage Garnishment?

In the case of a court-ordered garnishment you could consider: Applying to court to have the garnishing order set aside, or to increase the amount of your wages that are exempt; or working out a payment schedule with the creditor that could result in the garnishment’s removal.

If these are unsuccessful, or if you have a CRA garnishment, short of leaving your job or letting the garnishment run its course, stopping a garnishment basically has two solutions. Fortunately, both can be implemented very quickly in urgent situations:

• Consumer Proposal: This unique consolidation solution will allow you to cut debt, consolidate virtually all your debt into one repayment plan – and trigger a ‘stay of proceedings’, giving you protection from creditors that would immediately stop bank account and wage garnishments.
  • Consumer Proposals can have significant advantages over other consolidation options and allow you to halt creditor actions like wage garnishments while still avoiding bankruptcy.
• Bankruptcy: Another legal option that will halt wage garnishment and bank account seizures. The personal bankruptcy process in BC is generally private, straight-forward and lasts only nine months for most people.

Learn More About Eliminating Debt with a Consumer Proposal

Most people’s debt problems do not resolve themselves; some intervening action needs to take place. For general consumer debts like credit cards you likely have some time before creditors escalate actions drastically, so if you have any concerns about your debt we recommend that you be proactive – connect with a Licensed Insolvency Trustee as early on as possible.

Warning signs of a debt problem may not always be obvious. If you are experiencing any of the following you should consider connecting with a Licensed Insolvency Trustee right away:

• Constantly thinking about your debt, feeling debt-stressed, worried or anxious about your finances
• Only making, or even unable to make your minimum monthly debt payments
• Relying on your credit cards or other means of credit to meet your costs of living

Resources and solutions for a financial fresh start are available – you deserve to live without debt and its overwhelming stress.

Sands & Associates BC Licensed Insolvency Trustees are here for you. Get confidential expert advice at no cost – book your free non-judgmental debt consultation today.

The post Understanding Wage Garnishment: Can Creditors Really Take my Income if I Can’t Pay my Debt? appeared first on Sands & Associates.

What many people do not know is that even the best credit counselling agencies will have limitations in the debt management services they offer consumers, and for the unaware individual this can lead to many undesirable outcomes. The onus is very much on consumers to adopt a “buyer beware” attitude, do their own research and ask the right questions to understand the processes in full before making commitments.

Read on to learn more about informal credit counselling debt management plans and agencies, and learn how these stack up against formal debt solutions offered by Licensed Insolvency Trustees. Knowing is not owing!

What Consumer Should Know Before Choosing a Credit Counsellor

Despite Canada having only one type of debt help professional operating with full federal legislation, licensing and regulation – Licensed Insolvency Trustees – there are many debt relief services available to consumers. One of these options is to engage the services of a credit counselling organization (both “for-profit” and “non-profit” agencies exist) who will contact your creditors to negotiate an agreement where you seek to consolidate your eligible debts into a monthly repayment plan. This is called a debt management plan.

• A credit counselling debt management plan is an informal debt consolidation plan that does not have any legal authority. As such, you cannot cut your debt balances this way, but some eligible creditors may agree to stop charging ongoing interest.
• As part of this debt management plan, you should expect to repay 100% of your debt over a period of up to 5 years, plus fees charged by your credit counsellor.
  • Even non-profit organizations charge fees for their debt management programs.
    • Example: A ‘capped’ sliding scale fee of $75/month.

Credit counselling debt management plans are different to those typically proposed by debt settlement agents, who usually (but not always) attempt to negotiate your debts one at a time with lump-sum settlements to your creditors.

Although these two types of informal debt relief plans are different, it is important to understand that informal debt repayment is not a regulated industry in BC. This means:

• Anyone can call themselves a credit counsellor.
• Credit counsellors and debt repayment agency solutions are limited:
  • Debt management plans/programs aren’t legal solutions, creditor participation is voluntary.
  • Many common types of debt cannot be negotiated or consolidated through informal plans.
  • These professionals have no ability to enforce negotiation nor provide protection from creditor actions like wage or asset seizures.

The Government of Canada has posted numerous consumer alerts in relation to debt settlement companies and credit counsellors including:

• “Some companies offering help to pay off debt or repair credit are misleading consumers.”
• “Be aware that some credit counselling agencies may promote a debt management plan over other options, because they make money from creditors by getting a percentage of the debt that they recover.”

Learn More About Debt Settlement Consultants

Credit Counselling Debt Management Programs in BC

Before considering their debt management plans or following their professional advice, take a careful look at the agency/organization. Bear in mind considerations such as:

• Does the company or organization have any standing with a provincial or national association? At minimum are they registered with Consumer Protection BC?
  • People who charge a fee to act for or represent you to your creditors need to be licensed with Consumer Protection BC.
• Credit counsellors are not legally required to have any special education or training. What qualifications or credentials does this representative have?
  • Be aware that accreditations for credit counsellors in Canada are self-regulated – there is no government body providing accreditation.
• Will you be expected to pay consultation costs, referral fees or other charges?
• An organization that implies the following is likely misrepresenting their services or abilities:
  • Quickly improving your credit score
  • Guaranteeing a reduction of your debt
    • There is nothing to guarantee a creditor will accept your informal plan/offer.
    • Licensed Insolvency Trustees are the only professionals able to help Canadians with debt solutions that allow you to be discharged from your debt (i.e., have some or all your debts forgiven).
  • Being part of a government program or affiliation
    • Unless they employ a Licensed Insolvency Trustee it is against the law for companies to say they can manage a Consumer Proposal or bankruptcy for you.

4 Questions to Ask When Choosing a Credit Counsellor – Learn More

Is a Consolidated Credit Counselling Debt Management Plan Right for Me?

A credit counselling debt management plan may work for you if you:

• Have a fairly small amount of debt (under $5,000), or higher income compared to your debt-load.
• Only have basic unsecured debts such as credit cards, lines of credit etc.
• Can afford to repay 100% of your debt (possibly without interest), plus the program fees, with consistent monthly payments over a period of up to 5 years.

Regarding any debt management plan recommended, consider specifics such as:

• What debts will be covered? How much do you need to repay? Is the plan affordable?
• Will you be able to manage the separate debt payments to creditors who won’t agree to be a part of your debt management plan?
  • Government debts such as Canada Revenue Agency tax debt and student loans will NOT be covered by an informal plan. To consolidate and cut these debts consider a Consumer Proposal.
• Are you comfortable with a debt management agreement that doesn’t legally prevent your creditors from using collection actions (including wage garnishment) against you?
• What are your costs of using the plan/program? Will you be saving money?
  • You might save on interest, but you will be charged fees for services. Watch for set-up fees, monthly maintenance, membership etc.
  • In a 60-month debt management plan, even a $75 monthly fee adds up to $4,500.
• Are the details of payments and distributions to your creditors clear?
  • What all is required from you? What about your assets?
• What services will the agent / organization be providing you?
• What options are available if you can’t afford the payments anymore, or miss a payment? What about if a creditor changes their mind and wants to withdraw from the repayment plan?

What Debts Will a Consumer Proposal Cover? Learn More

Does Credit Counselling Consolidation Affect my Credit Score?

Although fairly straight forward, the credit rating impact of using a credit counselling debt management plan is often misunderstood. Credit counselling plans will:

• Require you to pay back all the debt you owe (maybe without interest).
• Require that you pay a fee to the credit counsellor.
• Be noted on your credit history for two years after you complete the debt management plan.

The two-year impact of a credit counselling plan on your credit score is similar to that of completing a Consumer Proposal, even though that formal plan can substantially lower the amount of debt you need to repay, and at no additional cost to you.

As mentioned previously, agencies or companies that claim to be able to quickly boost your credit score are misleading – improving your credit score takes time. You should also be aware that:

• Credit counsellors may attempt to stress the importance of your credit rating and may even word advertisements in a way that implies you can avoid a “serious” credit rating impact.
  • Any time you do not pay your debts in full per the original borrowing agreement, your credit rating will be impacted. This is true of ALL debt management plans, Consumer Proposals, etc.
• Impacts to your credit score are temporary – and in getting to a point of being debt-free, you are substantially improving your financial state of affairs in the long-run.
  • Even after a personal bankruptcy it is possible to rebuild your credit and be granted new credit at best rates within a couple of years.
  • Many people gain a financial fresh start and an ideal credit rating faster by taking steps to restructure their debts and then rebuilding their credit rather than if they had tried to pay off all their debt (plus accumulating interest) on their own.

Whatever solution you choose to help you manage your debts, be sure it is in your best interest, not just in the best interest of the person making the recommendations. You can also get a second opinion from a Licensed Insolvency Trustee at any point, without any cost or referral.

Tips to Better Manage Credit and Debt

What is a Licensed Insolvency Trustee?

Licensed Insolvency Trustees are professionals who offer specialized debt support and debt management services under the authority of federal regulations and legislation. Licensed Insolvency Trustees operate far beyond the many constraints and limitations placed on debt repayment agents and credit counsellors. With federal licensing and mandated qualifications and training, Licensed Insolvency Trustees have expertise and a code of ethics built-in to the profession.

Licensed Insolvency Trustees provide advice to consumers and businesses on how to deal with debt, helping people to make informed decisions – and we do this for free. We also can administer powerful formal solutions like Consumer Proposals as well as bankruptcy; these legal processes allow you to significantly cut your debt and gain protection for your income and assets.

What’s the Difference Between a Consumer Proposal and Bankruptcy?

Quick Facts About Licensed Insolvency Trustees

Who Licensed Insolvency Trustees Work For

Licensed Insolvency Trustees are a neutral party; we will however deal directly with your creditors on your behalf.

• Licensed Insolvency Trustees do not work for your creditors, and unlike many credit counsellors, neither do we accept any commissions or money from banks, lenders or other creditors.
• No creditor or other party can stop you from getting help from a Licensed Insolvency Trustee and accessing the legislated solutions we can help you with.

Public Records

Like misunderstandings about credit rating impacts, when many people learn that “public records” are kept for bankruptcy or proposal filings, they are not made aware that:

• To search these government databases requires having an account set up; and
• There is a cost to search these public records.

Contrary to many fears, even a personal bankruptcy filing is quite a private affair in Canada.

Licensed Insolvency Trustee Fees

The administration fees for a Consumer Proposal (and personal bankruptcy) are strictly set by law, Trustees don’t set their own costs or charge you a ‘fee for service’.

• In a Consumer Proposal whatever you are offering as payment to your creditors is all you will have to pay. Tariff-set administration fees are calculated then deducted from the funds your creditors receive, and this does not translate into any extra costs for you.
  • At Sands & Associates we do NOT charge any upfront fees to start a Consumer Proposal.
• Most personal bankruptcies cost a total of $2,700, paid by way of monthly payments over the basic 9-month period of bankruptcy.

Learn More About How a Licensed Insolvency Trustee Gets Paid

Formal Debt Consolidation – More About Consumer Proposals

Consumer Proposals are a unique consolidation option only accessible by working with a Licensed Insolvency Trustee. Consumer Proposals:

• Allow you to consolidate and cut (even by up to 80%) virtually all your debt, while automatically freezing ongoing interest (no negotiation needed).
  • Monthly payment terms are flexible, tailored to your unique situation.
  • Payments are generally significantly less than any other debt management strategy.
• Are almost always accepted by your creditors. If the majority of creditors (by dollar value) agree, your offer becomes binding on ALL your creditors, even those who did not agree.
  • A creditor cannot choose to not participate in your Consumer Proposal, and they are forbidden from contacting you for payments, or pursuing you for collection actions etc.
• Can even halt an ongoing wage garnishment with a creditor as powerful as Canada Revenue Agency.
• If something happens and you miss a payment your proposal will not automatically fall apart. If your situation changes and you can’t continue with your payments there are options to amend your proposal, or you could even consider whether bankruptcy would be more appropriate.

Many people haven’t heard about Consumer Proposals before, and these are just a few of the many built-in advantages and benefits of choosing a Consumer Proposal to consolidate and manage your debt.

All Sands & Associates Licensed Insolvency Trustees provide free debt consultations where you can get expertise and professional insights. You should never pay money for a consultation with a Trustee (or any debt help provider for that matter), and there is no referral needed to connect.

You can turn to us for virtually all things debt-management related including: evaluating the pros and cons of debt management strategies, whether a debt is payable, what you can do if you’re having trouble paying your debt, resources that can help you deal with your debt and more.

Ready to connect with a local BC debt expert? Book your free non-judgmental debt consultation now.

The post What’s the Best Plan for Consolidated Credit Counselling? appeared first on Sands & Associates.

Working with a BC Debt Help Expert

When it comes to debt relief services across Canada there is a broad range in authority, expertise, legal power and even trustworthiness. It falls to each province to oversee debt help services offered by individuals and organizations in their jurisdiction. Unfortunately, consumer alerts issued at a federal level, as well as published provincial guidelines, may not be sufficient to fully educate the public on key differences in debt help providers which can ultimately leave consumers at risk of abuse.

What many consumers are not aware of is that of all organizations and professionals that offer debt help services, only a single one operates with complete (and robust) federal legislation, licensing, and regulation – Licensed Insolvency Trustees.

So although you can engage debt help services other than those of a Licensed Insolvency Trustee, a “buyer beware” caution is often applicable. Read on to learn some of the key facts you should know about informal debt repayment plans and working with various different debt management providers in BC.

What is a Debt Repayment Agent? | What is a Debt Settlement Company?

Debt repayment agents or debt settlement agencies are people/companies who offer services to represent you with your creditors, for a fee. They may offer help negotiating, making repayment arrangements with and even distributing your payments to your creditors. Some credit counselling organizations also provide these services.

This type of debt settlement can be advertised under many different names in addition to ‘Debt Settlement’, such as: Debt Pooling, Debt Negotiation, Debt Consolidation, Debt Elimination.

Here’s how debt settlement usually works:

• For a fee, a debt repayment agent negotiates with your creditor, offering them a lump sum of money (usually less than what you owe) to settle your debts.
• If the creditor agrees to the offer you will then pay that lump sum to your debt repayment agent, who will then pay your creditor.

Debt settlement can be more complex than it may first appear. There are common challenges to be aware of, including gaps between provincial and federal regulations that leave plenty of room for consumers to slip through the cracks.

Myths About Legal Debt Help Options

Debt Settlement Licensing & Fees

In attempts to make debt settlement agents “safer” for consumers, some provinces (including BC) brought in a set of basic rules and general licensing to keep tabs on debt repayment agents. In 2016 BC changed its Business Practices and Consumer Protection Act in order to: 1) Require licensing with Consumer Protection BC and 2) Stop charges for upfront fees before a repayment agreement is reached with your creditors.

• In BC, a person who is defined as a debt repayment agent (i.e., charges fees to act for/represent you with your creditors) is required to be licensed with Consumer Protection BC, the province’s regulator for debt repayment agencies.

These changes however still do not serve to regulate the overall industry in its entirety and if you decide to work with a debt repayment agent or credit counsellor, your recourse should there be a problem may be very limited. In fact, if you’re dealing with organizations located out of province, you may have no recourse whatsoever if promises are not lived up to. The changes also do not:

• Stop non-BC based companies from targeting BC consumers with their services and promises.
• Prevent organizations from charging you for other services such as consulting and referral fees (whether they are registered in BC or not).

It’s important to understand that despite the province’s implementation of licensing in the industry, informal debt repayment is not a regulated industry – many consumers may misinterpret licensing as “government-approved” or “legally-sanctioned” solutions.

• There is no such thing as provincially or federally affiliated, subsidized or supported debt repayment plans.
  • The options that Canadian consumers DO have that most closely resemble these attributes are those governed by the Bankruptcy and Insolvency Act: Consumer Proposals, Division I Proposals, Bankruptcy.
• The Debt Collection and Repayment Regulation of BC’s Business Practices and Consumer Protection Act states that your debt repayment contract must include a specific statement, part of which notes:
  • “The services of a debt repayment agent are not provided on behalf of, or in affiliation with, the Province of British Columbia or the Business Practices and Consumer Protection Authority, commonly known and doing business as Consumer Protection BC. Using the service of a debt repayment agent will not necessarily improve your credit rating, deter the efforts of a creditor to collect a debt or prevent legal action to recover the debt, including garnishment of your wages.“

The Debt Collection and Repayment Regulation also sets guidelines for maximum fees and disbursements a debt repayment agent can charge you. Understanding debt repayment agency fees can be complicated, and you can be charged different amounts for services depending on the model your specific agency is following.

Here are two examples to illustrate the difference in fees:

• If your debt repayment agent negotiates with your creditor(s) the amount to be paid and you make a repayment plan lasting 90 days or more, you can be charged as much as:
  • 15% of the gross amount to be repaid, and
  • A one-time charge up to an amount equal to the average monthly distribution being made to the creditor.
• If your debt repayment agent negotiates with your creditor(s) the amount to be paid and you make a one-time payment in full, you can be charged as much as:
  • 10% of the gross amount received, with the fee being paid after the agreement with your creditor has been made.

It is extremely important to understand all costs and aspects of your contract before signing anything.

Other Common Problems with Informal Debt Settlement

• This type of debt relief process is not legally governed, and your creditors do not have to negotiate with the agent. Many creditors simply will not deal with a debt settlement company or credit counsellor working on your behalf. Debt settlement agents can offer you no protection from creditors.
• Few people have a lump sum of cash ready, and during the time it takes to save up the money that will be offered to your creditors, your debts are often going unpaid.
• Some debt repayment agents will direct you to stop making payments to your creditors even prior to negotiating your balance. This (unsurprisingly) can aggravate or cause a situation where creditors then escalate their collection actions against you potentially leaving you in a worse and more stressful position than when you had originally sought help.

Learn About Wage Garnishment in BC

What is a Credit Counsellor? Is Credit Counselling Different to Debt Settlement?

Although they may use different titles, credit counsellors can have a lot more in common with debt repayment agents (discussed previously) than you might think. Virtually anyone can call themselves a credit counsellor and debt repayment agents can advertise their services as credit counsellors too.

It’s important to know and understand that credit counselling is NOT a government-licensed profession (nor a regulated industry). Credit counsellors aren’t legally required to have any specialized education and training; although there are accreditations for credit counsellors in Canada, these are self-regulated.

• Credit counselling is a term that can describe several different debt help services, including consolidated credit plans for consumers, or in some provinces credit counsellors may be registered as collection agents.
• If you’re going to access even free resources a credit counsellor has available, you should at a minimum ensure they are part of an association in good standing.
• Like debt settlement agents, BC credit counsellors who offer debt management plans and collect fees for these services need to be licensed with Consumer Protection BC under the Business Practices and Consumer Protection Act.
  • This is applicable to for-profit businesses as well as non-profit organizations.

A credit counselling organization may offer resources such as credit education, workshops or budgeting tools at no cost – they may also offer to enroll you in their debt management programs, where costs often kick in.

Here’s how credit counselling debt management plans usually work:

• A credit counsellor will contact your creditors to attempt to negotiate an informal arrangement where you will consolidate your debts into a monthly repayment plan.
• Your eligible creditors may agree to stop charging ongoing interest, allowing you the benefit of the good rapport/close working relationship a credit counselling organization has with your lenders.
• Normally you should expect to repay 100% of your debt to the creditors that will negotiate with credit counsellors, plus the counsellor’s fees.

Ultimately, like debt repayment agents, credit counsellors have limited abilities when it comes to debt management plan solutions, and these plans can fall short for consumers in many situations. In summary:

• Credit counselling debt management is NOT a legal solution.
• Many common types of debt cannot be negotiated or consolidated through informal plans.
• There is no ability to enforce negotiation or protection over creditors.

Learn More About Credit Counselling Plans

Fees for Non-Profit VS For-Profit Credit Counselling

While non-profit organizations may offer free resources and workshops, often referenced as charitable resources, even by government sources – these are services separate from debt management plans where you will be charged fees for informal debt negotiation services.

• In Canada there is no such thing as 100% free debt management services. Even a personal bankruptcy will have nominal cost. (Although in situations where you’re unable to pay your debt but have virtually no income or assets, there may be other options to help you.)

Consumers should be aware that non-profit AND for-profit credit counselling agencies charge fees and receive money for debt management plans.

• For-profit organizations get paid through fees they charge you via their repayment plans.
• Non-profit organizations can be funded by both:
  • Costs you are charged for their debt repayment programs.
  • Money from the credit granting community.

Non-profit credit counsellors may try to distinguish themselves from their for-profit counterparts, and while choosing a non-profit organization does often offer more accountability and professional expectation over working with other credit counsellors, there is arguably still much room for improvement in complete transparency.

A Licensed Insolvency Trustee can help you understand all your options (formal and informal) to manage your debt, or even have debt forgiven. Non-judgmental consultations where you can discuss your situation with Sands & Associates’ qualified debt experts are free and confidential – no referral required.

Learn more about debt plans, consolidation with Consumer Proposals and working with a Licensed Insolvency Trustee. Book your free debt consultation now – virtual appointments also available.

The post Should I Work with a Debt Settlement Agent or Credit Counsellor? What’s the Difference? appeared first on Sands & Associates.

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.

While debt settlement companies have received media attention and the implementation of legislation changes restricting their practices in other provinces, British Columbia has yet to follow suit.  Blair discusses the possible ramifications of unlicensed debt settlement, and alternative solutions for Canadians.

Debt Free in 30 is a weekly 30-minute radio show and podcast; industry experts on topics such as debt and personal finance offer insights and advice to listeners.  Hosted by Doug Hoyes, licensed trustee and co-founder of Hoyes Michalos & Associates Inc, other notable past guests have included well-known personal finance expert and TV personality Gail Vaz-Oxlade, personal finance columnist Jonathan Chevreau, as well as Dr. Leanne Davies who recently co-authored a book with Blair entitled “When Life Bites you in the Wallet”.

Click here to listen to the free podcast at the iTunes store.

A full summary of the Debt Free in 30 episode “Predatory Practices of U.S. Debt Settlement Companies” can be seen here.

To meet with a licensed trustee regarding your available debt options, please contact us to arrange a free, confidential consultation in your area.

The post Blair Mantin guest on “Debt Free in 30” Radio Show and Podcast appeared first on Sands & Associates.

The statute of limitations bars creditors from legally attempting to collect on an unsecured debt after a certain limitation period – these limitation periods are not the same in each province. For example, Alberta, British Columbia, Ontario and Saskatchewan have a basic two-year limitation period; in Quebec it’s three years; everywhere else in Canada has a six-year limitation period.

While the statute of limitations essentially makes it illegal for a (non-government) creditor to demand payment from you after a certain amount of time, the rules can get complicated. For instance:

• Government debt collection is exempt (meaning the statute doesn’t apply to debts like taxes or student loans).
• In some provinces the limitation period winds up being reset if the consumer makes a payment or acknowledges the debt in writing. Because of this clause, collection agencies may try to “trick” people into admitting the debt and restarting the limitation periods.

“Can the Statute of Limitations Erase Your Debt?” – Read the Full Article

Consumers who may be considering relying on the statute of limitations as a course of action to deal with their debts, or exploring other debt solutions, are encouraged to connect with a local Licensed Insolvency Trustee in their province to learn about all their debt options confidentially, at no cost.

The post Statute of Limitations and Debts in BC appeared first on Sands & Associates.