Tips to Manage Rising Consumer Costs 

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

Prioritize Your Household Budget

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

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

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

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Reconsider Your Non-Essential Costs 

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

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

Debunking Common Consumer Debt Myths – Learn More

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

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Tips for Future and Emergency Financial Planning 

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

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

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

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

Learn About Tax and Canada Revenue Agency Debt Forgiveness

Focus on Becoming Debt-Free

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

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

Do the “Rule of 60” Math

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

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

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

Book Your Free Consultation

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

Findings from the 2023 BC Consumer Debt Study were released today, presenting a unique exploration of consumer debt issues in the province. The eleventh annual study surveyed over 1,700 people from around the province who recently restructured their debts using a Consumer Proposal, or filed for Bankruptcy, inviting these individuals to share honest personal insights into their experiences dealing with debt, and finding solutions to these difficulties.

Conducted by Sands & Associates, the BC Consumer Debt Study series is the only study of its kind focused on BC and, according to Sands & Associates President and Licensed Insolvency Trustee Blair Mantin, the annual studies offer an opportunity to understand the realities of the financial challenges people across the province face, and the many facets of a debt problem. As Blair explains:

“As Canada’s debt help professionals, we know that when debt is unmanageable it carries impacts to a person that are far beyond account balances or credit scores. People’s mental health, relationships, physical health and more suffer seriously under this burden, and the emotional beating they take often causes them to struggle alone for months and even years.

In our current post-COVID, high inflation environment consumers are constantly facing a barrage of financial challenges and if uncontrollable debt is one of them, we know that things can deteriorate quickly. It is critical for people to have support, know where and how to access it, and have confidence in the resources available to help them resolve a debt problem and move forward with life.”

Click here to read the full 2023 BC Consumer Debt Study report

Click here to view and download the 2023 BC Consumer Debt Study infographic

Consumer Debt Issues in BC – Highlights from the 2023 BC Consumer Debt Study 

The largest proportion of participants in the 2023 BC Consumer Debt Study (36%) said they had $25,000-$49,999 of debt (excluding vehicle loans/mortgages) when they started a formal debt relief process.

• 30% of all study participants described their credit rating as ranging from ‘good’ to ‘excellent’ at the time of making a Consumer Proposal or filing Bankruptcy.
• Close to 3 in 5 people (58%) said credit card debt was the main type of debt they had, almost five times higher than the next debt type.
• Roughly 1 in 8 individuals (12%) claimed payday or instalment loans was their main type of debt, the highest proportion of this type of debt in the BC Consumer Debt Study series history.

Other trends may indicate consumers have become less able to accumulate and maintain a large debt-load, and that the access to Consumer Proposals as a debt management alternative to Bankruptcy has increased substantially:

• 2023’s study had the highest number of participants ever indicating their debt levels were below $25,000 when they started a Consumer Proposal or Bankruptcy, while the number of people who indicated having debt levels of $100,000 or more was the lowest ever.
• The proportion of Consumer Proposal filings (over Bankruptcy) in BC has increased significantly over time. As illustrated by respondents in the BC Consumer Debt Study series, Consumer Proposals as the solution of choice rose from 20% of respondents in 2012’s study, to a whopping 81% of respondents in 2023. 

Behind the Debt: Economic Issues and More

Consumers appear vulnerable to a range of personal and economic issues outside their immediate control that may create financial strain that ultimately develops into a debt problem:

• Just over a quarter of BC consumers polled (27%) said their debt was caused by overextended credit due to general financial mismanagement.
• Closely following, the second-most reported cause of debt from 25% of consumers was using credit for essential costs of living income could not cover.
  • The proportion of individuals attributing their debt to a reliance on credit for living expenses increased from 20% in 2022’s study.
• The remaining top six causes of debt identified by consumers were: Illness, injury or health-related problems (11%); Marital or relationship breakdown (7%); Job related issue (5%) and Pandemic-related job loss or reduction in work hours (5%).

95% of the 2023 BC Consumer Debt Study respondents indicate their household has been impacted by recent inflation increases, with the largest proportion (88%) saying inflation has their household now spending more on necessities such as food and gas. Half (50%) also say their household is no longer able to accumulate as much savings, leaving consumers exposed to future challenges in meeting unexpected financial needs.

Signs and Symptoms of a Debt Problem 

More than 7 in 10 people polled (71%) said overwhelming stress was how they knew their debts were becoming a problem. 

• Other top-identified signs of a debt problem as reported by consumers were: Only making minimum payments (60%); Seeing debt balances remain almost the same every month, despite making payments (55%) and Accumulating more debt on credit accounts (37%). 

Study participants disclosed a range of personal impacts to coping with unmanageable debt, including:

• A constant worry about debt was present for over 4 in 5 people (83%).
• Almost 4 in 5 people (79%) said their mental health suffered by being in debt, and 3 in 5 (61%) said their self-esteem suffered because of being in debt. Nearly half of respondents (49%) said debt caused their physical health to suffer.
• 29% of people polled said the stress of debt caused them to alienate themselves from family or friends, and 30% said their relationships suffered due to debt-stress.
• Over three-quarters of those surveyed (77%) said they experienced anxiety from the stress of debt; also 66% feelings of helplessness or hopelessness, and 61% depression.
• Almost 1 in 6 people (16%) said they experienced suicidal ideation because of their debt-stress. 

Managing a Personal Debt Problem 

Although over 90% of people polled in the 2023 BC Consumer Debt Study said they were ultimately satisfied with their decision to eliminate their debts with an insolvency process, arriving at this positive solution unfortunately often takes an extended time – over 96% of survey respondents did not seek professional help right away. 

• Most respondents (64%) said they waited to seek professional debt help because I wanted to manage my debt on my own.
• Other top reasons individuals waited to seek professional support were: I felt ashamed I couldn’t handle the debts I had incurred (56%) and I was embarrassed to ask for help (51%).
• A lack of public awareness of debt management resources also remains a significant issue, with a third of survey respondents (34%) saying I thought there was no solution to my situation; over 1 in 4 (27%) I didn’t know where to seek help and 17% I had misinformation about how the Consumer Proposal and/or Bankruptcy process worked.

A variety of different tactics were used by BC consumers polled, as individuals attempted to solve their debt problems on their own, often turning to more borrowing as a solution:

• Over a third of survey participants (36% and 34% respectively) said they applied to extend credit limits on existing debts and/or borrowed from family or friends to make debt payments.
• A quarter of individuals (26%) applied for consolidation financing; 25% used payday or instalment loans, and 4% asked family or friends to co-sign a consolidation loan.

Outlooks and Attitudes Improved After Solving Debt Problems

In addition to positive sentiments around their choice of a Consumer Proposal or Bankruptcy to manage their debt, more than 4 in 5 participants (87%) said that filing a Consumer Proposal or declaring Personal Bankruptcy has helped them manage day-to-day finances despite noticeable rising costs.

Individuals polled additionally said their experience receiving professional debt help:

• Improved their budgeting and/or savings skills (69%).
• Has made them more confident in day-to-day financial management (59%).
• Gave them a better understanding about credit and borrowing (54%).

Debt study participants were also invited to share their retrospective advice to others, and to provide words of encouragement to others who may be facing similar struggles. We highly encourage readers to browse these personal insights shared, as highlighted within the 2023 BC Consumer Debt Study report. 

Click here to read the full 2023 BC Consumer Debt Study report

Click here to view and download the 2023 BC Consumer Debt Study infographic

2023 BC Consumer Debt Study infographic

View the BC Consumer Debt Study series here

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

About Sands & Associates and the BC Consumer Debt Study Series

Sands & Associates was founded in 1990 and has grown to become an award-winning leader in the debt help industry, now BC’s largest firm of Licensed Insolvency Trustees focused exclusively on debt services for consumers and small businesses.

Taking a non-judgmental “debt smart with heart” approach to helping individuals deal with a debt problem is the foundation of Sands & Associates’ beliefs, and we feel that understanding the extent of a financial crisis is a crucial step in providing the right solutions and support to people in need.

It is our goal that the BC Consumer Debt Study series will continue to highlight challenges faced by individuals across the province and encourage members of professional and government organizations to take active steps to reach consumers in need early, and with the right support to achieve better outcomes.

Supportive debt relief services and debt restructuring solutions are available for BC residents via telephone, video, and in person at local offices throughout the province. Connect with a qualified local Sands & Associates debt expert today – book your free, non-judgmental debt consultation here.

The post Increasing Number of Consumers Turning to Credit for Costs of Living, with Impacts to Mental Health and More – Latest BC Consumer Debt Study appeared first on Sands & Associates.

Watch the clip here, and read more below:

What is a Reasonable Amount of Personal Debt?

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

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

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

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

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

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

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

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

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

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

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

Talking with a Licensed Insolvency Trustee

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

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

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

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

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

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

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

Watch the clip here, and read more below:

Potentially Risky Consumer Debts

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

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

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

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

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

Compare Monthly Payments with Our Debt Options Calculator

Most Risky Consumer Debts

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

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

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

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

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

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

Learn More About Solutions for Having Government Debts Forgiven

Consumer Debts to Be Cautious Of

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

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

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

Read More About Co-Signing Debts

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

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

Learn More About Options to Consolidate Your Debt

Where to Get Debt Help in BC

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

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

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

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

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.

From strained mental health, to fractured relationships and more – the toll of debt is often much more than a financial one, and despite these overwhelming impacts of dealing with problem debt, only 5% of people polled in the 2022 BC Consumer Debt Study said they sought help right away from a debt professional.

BC Licensed Insolvency Trustee Blair Mantin, President of Sands & Associates, says “You owe it to yourself to seek debt help,” and suggests that more open conversations and access to non-judgmental support are key to removing hurdles for people who may be struggling with debt and its devastating impacts.

Does Debt Impact Mental Health? Latest BC Consumer Debt Study Says Emotional Burden Can Be Substantial

Debt Solutions and a Financial Fresh Start

Meet Pratap, Dan, and Heidi. They each have first-hand experience in dealing with – and resolving – problem debt, and in a bid to help others seek support and solutions, spoke with Global News about some of their own personal experience in dealing with debt.

Meet Pratap and learn how his financial struggles escalated during the COVID-19 pandemic:

Meet Dan and learn about his journey through recovery and managing overwhelming debt:

Meet Heidi and learn how she overcame her financial difficulties to create new habits and healthy boundaries:

The individuals surveyed in the 2022 BC Consumer Debt Study ultimately chose to manage their debts with a legal debt relief solution, either by consolidating their debt with a Consumer Proposal or by filing personal bankruptcy. Over 90% felt satisfied, if not extremely satisfied by their choice, and expressed positive outcomes from their decision to get professional debt help, including:

• Over 7 in 10 people said their experience receiving professional debt help allowed them to improve their budgeting and/or savings skills, and 57% reported being more confident in day-to-day financial management because of their experience.
• 53% of participants said they have a better understanding about credit and borrowing.
• 39% said they are more open in discussing finances and general money matters with others.

Get Debt Help Today – You Owe it to Yourself 

If you are struggling with debt, know that you are not alone, and that there are solutions to help you live your best life – without debt.

To explore your legal and informal options for dealing with debt, and get trustworthy advice, a Licensed Insolvency Trustee is the right professional to help you.

• Licensed Insolvency Trustees are Canada’s only fully regulated and endorsed debt help experts, empowered to serve Canadians with a range of debt management services.
• You do not need to be dealing with an extreme situation to seek support from a Licensed Insolvency Trustee, and BC consumers can request a free confidential consultation with Sands & Associates by phone or video, or in person from a local office.

Move forward with confidence and optimism for what the future holds. Book your free, non-judgmental debt consultation today – you owe it to yourself to get debt help.

The post Dealing with Debt – Global News Features Real Stories from BC Consumers appeared first on Sands & Associates.

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

Why is it Important to Get Out of Debt?

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

Debt-Stress is Real Stress

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

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

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

Debt is Expensive – for You and Your Future-Self

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

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

Getting Debt Under Control

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

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

Tips for Making Your Debt-Free Plan Work

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

Get Your Budget Onboard

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

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

Is a Consumer Proposal Right for Me?

Avoid the Minimum Payment Trap

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

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

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

It’s important to understand that You Have Options!

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

Don’t Procrastinate Seeking Debt Help

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

You Owe it to Yourself to Get Debt Help

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

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

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

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

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

Findings from the 2022 BC Consumer Debt Study were released today, offering a unique and frank view of consumer debt issues British Columbians face. Conducted by Sands & Associates, over 1,400 individuals from around the province who recently declared bankruptcy or restructured their debts using a Consumer Proposal consolidation plan participated in the study, sharing detailed personal insights into their first-hand experiences dealing with – and ultimately resolving – problem debt.

The tenth in the annual series and only study of its kind specifically focused on BC, according to Sands & Associates President and Licensed Insolvency Trustee Blair Mantin, the study series sheds much-needed light on the realities that money pressures present. As Blair explains:

“Inflation, housing, the global coronavirus pandemic – those are just a few recent widespread issues that can translate into debt for many consumers, on top of common financial pressure events such as a marital breakdown or illness. It’s not one specific group being impacted either, from those early in their careers to seniors well into retirement and everyone in between – debt often appears as a tool to lean on, then turns into a serious issue with a desperate borrow-repay-borrow cycle. Being in debt deeply affects people; we see you, we hear you.

A debt problem can escalate dramatically, and we know as debt help professionals it’s a problem that has well defined solutions. But for the individual struggling, overwhelmed, ashamed – they don’t have the benefit of these insights. And this is part of why this study series is so important. If you’re dealing with a debt problem you’re not alone, and, beyond any account balances, most of all you owe it to yourself to get help when you need it.”

Click here to read the full 2022 BC Consumer Debt Study report

Click here to view and download the 2022 BC Consumer Debt Study infographic

Consumer Debt Issues in BC – Highlights from the 2022 BC Consumer Debt Study

The 2022 BC Consumer Debt Study’s largest proportion of participants (34%) said they had $25,000-$49,999 of debt (excluding vehicle loans/mortgages) at the time they started a formal debt relief process.

• Roughly 30% of all study participants described their credit rating at this time as ranging from ‘good’ to ‘excellent’.
• Almost 3 in 5 individuals (59%) said credit card debt was the main type of debt they had – nearly 6 times higher than the next most common type of debt.
• Payday or instalment loans were reported as the main type of debt for 11% of respondents, making this the second-most common type of debt reported by survey participants for the first time in this study’s history.
• Tax debt and line of credit debt were each cited as the main type of debt for 9% of participants.

Although credit card debt continues to dominate as the most-reported type of debt, the recent increase in payday or instalment loan use is notable: payday or instalment loans were indicated as the main type of debt held by just 5% of 2019 BC Consumer Debt Study respondents, compared with 11% in this year’s study.

Behind the Debt

Uncovering the common causes of accumulated debt reveals much about the difficulties that participants in the 2022 BC Consumer Debt Study faced, particularly as we note that 4 of 5 most reported causes of debt relate to triggering events or circumstances that would generally fall outside an individual’s explicit control:

• 1 in 5 people (20%) polled said the direct main cause of their debt was using credit for essential costs of living income could not cover, while 1 in 4 (28%) said their debt was caused by overextended credit due to general financial mismanagement.
• Following these, causes of debt were attributed to: Illness, injury or health-related problems (10%); Marital or relationship breakdown (8%); Job-related issues (6%).

Although the 2022 BC Consumer Debt Study found the lowest proportion of survey participants who, following pre-pandemic trends, connect the main cause of their debt to job issues alone, a total of 6% of respondents did identify job or business disruptions due to COVID-19 as the direct main cause of their debt. The effects of the COVID-19 pandemic warrant continued observation, as the impacts are likely to continue to be felt by consumers and businesses for years to come.

The Cost of Debt – More Than Just Financial

The emotional toll of debt was the number one sign of a debt problem as reported by consumers in the 2022 BC Consumer Debt Study:

• Almost 7 in 10 people (69%) said overwhelming stress was how they knew their debts were becoming a problem.
• Other signs of debt trouble reported most by survey participants were: only making minimum payments, as reported by almost 6 in 10 people (58%); seeing debt balances remain almost the same every month, despite making payments (53%); accumulating more debt on credit accounts (36%).

Carrying burdensome debt came at a high cost, felt far beyond account balances by most individuals polled. Study participants detailed a range of effects from dealing with debt, including:

• Close to 4 in 5 people (79%) said their mental health suffered being in debt; 63% said their self-esteem suffered as a result, and 47% that debt affected their physical health.
• Over 4 in 5 (82%) said they felt constant worry about debt; 3 in 4 (76%) had anxiety from the stress of debt; 66% feelings of helplessness and/or hopelessness; 60% depression.
• Roughly 1 in 7 people said debt-stress resulted in them experiencing thoughts or contemplation of suicide.

Many people polled also reported effects from debt on their personal milestones and important relationships:

• 30% of survey participants said they had to put life events on hold.
• 30% said their relationships suffered and 29% said debt-stress caused them to alienate themselves from family or friends; 25% said it caused arguments with their spouse or partner about money.

Dealing With Debt

Notwithstanding the significant impacts of debt on survey respondents’ daily lives, reaching out for help was often made more difficult by emotional barriers and a damaging lack of information about options for resolving problem debt. The result is that only 5% of people suffering with a debt burden said they sought help right away from a debt professional.

In addition to wanting to manage my debt on my own (reported by 65% of study respondents) common reasons that caused participants to wait to seek professional debt help sadly included:

• Feeling ashamed I couldn’t handle the debts I had incurred (55%), embarrassed to ask for help (51%), and worried about being judged (40%).
• Over 1 in 4 people (28%) said they didn’t know where to seek help, and 15% had misinformation about how legal debt relief processes worked.

Many survey participants attempted to resolve their debt problems on their own before turning to legal resources, often looking to access more credit as a solution to deal with debt, including:

• A third of individuals polled (33%) tried applying to extend credit limits on existing debts.
• 29% borrowed from family or friends to make debt payments.
• 27% applied for consolidation financing; 6% asked family or friends to co-sign a consolidation loan.
• 23% used payday or instalment loans.

Improved Financial Outlook

The individuals surveyed in the 2022 BC Consumer Debt Study ultimately chose to manage their debts through a formal debt solution (Consumer Proposal consolidation or bankruptcy), and over 90% said they were satisfied, if not extremely satisfied by their choice.

Survey participants expressed notably positive sentiments about their decision and some of the key outcomes from their experience included:

• More than 7 in 10 people (73%) said their experience receiving professional debt help allowed them to improve their budgeting and/or savings skills, and 57% reported being more confident in day-to-day financial management as a result of their experience.
• 53% said they have a better understanding about credit and borrowing.
• 39% also say they are more open in discussing finances and general money matters with others.

Participants of the 2022 BC Consumer Debt Study were also invited to share their retrospective advice, and words of encouragement to others who may be struggling with debt – and we encourage readers to learn more through these deeply personal insights offered, as highlighted within the 2022 BC Consumer Debt Study report.

Click here to read the full 2022 BC Consumer Debt Study report

Click here to view and download the 2022 BC Consumer Debt Study infographic

2022 BC Consumer Debt Study infographic

View the BC Consumer Debt Study series here

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

About Sands & Associates and BC Consumer Debt Studies

Since founding in 1990 Sands & Associates has grown to become an award-winning industry leader, now BC’s largest firm of Licensed Insolvency Trustees focused exclusively on debt help services for consumers and small businesses across the province.

Sands & Associates is committed to delivering empowering and non-judgmental support to British Columbians, through our media and financial literacy initiatives and one-on-one consultations. We are proud to be described as having a “Debt Smart with Heart” approach and when it comes to getting debt help, we believe you owe it to yourself. Everyone is entitled to live with dignity, without the overwhelming stress of debt.

Our debt help services are available in person at local offices throughout BC, or remotely by video and telephone conferencing. Connect with a Sands & Associates BC debt help expert today – book your free non-judgmental debt consultation now.

The post Does Debt Impact Mental Health? Latest BC Consumer Debt Study Says Emotional Burden Can Be Substantial appeared first on Sands & Associates.

Receiving word you may need to repay some or all the benefits you received can be stressful to say the least. On top of regular bills and other debts, an unexpected new debt is something that will understandably upset many people’s finances. Most people don’t have the available cash to simply repay an unanticipated balance outright, and many others are still experiencing ongoing financial impacts of the COVID-19 pandemic.

About the Canada Emergency Response Benefit “CERB” and Repayments

The Canada Emergency Response Benefit “CERB” was a government measure aimed at providing financial support for Canadian workers who were impacted by the COVID-19 pandemic. The basics of this taxable emergency benefit were that eligible people could receive $2,000 for each applicable 4-week period. Financial assistance options later changed, and people could be eligible for recovery benefits such as Canada Recovery Benefit and others through Employment Insurance.

From mistakes in applications to receiving duplicate payments and more, there are a few reasons why people may now expect to, or have already been called on, to repay CERB they previously received, including:

• You applied and it was later determined you weren’t eligible (not meeting income requirement, etc.)
• You earned more income than you anticipated when you received CERB (resumed employment earlier than anticipated, received retroactive pay from employer, etc.)
• You received CERB from both EI/Service Canada and CRA for the same eligibility period

How is the Government Collecting on CERB Repayments?

Canada Revenue Agency (“CRA”) collects CERB overpayment and other COVID-19 benefit debts on behalf of Service Canada (among others) and has recently stated that:

• If you received benefits you weren’t entitled to, you will be sent a notice of redetermination.
• If you can’t pay your overpayment debt in full now, no interest or penalty will be applied on your COVID-19 benefit overpayment debts.
• If you have a balance owing your future payments, tax refunds or GST credits (all or a portion of) may be kept by CRA until your debt is repaid.
  • Even if you have a payment arrangement in place CRA can take amounts from any credit you receive to repay your debt.
  • If you’re receiving EI benefits repayment of CERB debt will be recovered by Service Canada automatically at 50% of your EI benefit rate.

An Overview of Wage Garnishment in BC – Learn More

I’m Worried About Repaying my CERB Debt – What Can I Do?

If you have discovered you must repay CERB amounts you received but are unable to repay the full amount you owe immediately, or can’t afford the minimum monthly payment on your statement of account, you may wish to contact CRA to discuss making manageable repayment arrangements.

• You can also connect with CRA if you disagree with your overpayment, suspect fraudulent activity or want to discuss an automatic recovery from EI benefits at a lower rate.
• Be careful of the fraudulent texts, calls and emails claiming to be CRA that are still widely circulating.

CRA has stated that if you don’t call or make payment arrangements, they may take legal action to collect on your balance owing. CRA is encouraging people not to ignore these debts, and we agree!

What Does it Mean for CRA to Take Legal Action to Recover a CERB Debt?

CRA is a powerful creditor who can quickly (with virtually no notice to you!) take extreme steps, but at present seems to be taking a milder approach to collecting CERB repayments, in contrast to their often-forceful approach to realizing on other debt. Common remedies often applied in collecting on debts such as student loans, government benefit overpayments, income tax debt, business GST and more include (but are not limited to):

• Garnishment of wages and other income
• Seizures or holds on bank accounts
• Registering a lien on your home or other property

Once CRA has started legal actions they won’t usually withdraw them, but a Licensed Insolvency Trustee can offer you solutions to make them stop. We highly recommend people seek a local Licensed Insolvency Trustee right away if challenges repaying ANY kind of CRA debt are anticipated. There are options for CERB overpayment forgiveness and virtually any other type of debt, whether owed to a government body or a common consumer lender.

In our experience as Licensed Insolvency Trustees many people struggling financially have found themselves in difficult situations aggravated due to factors outside their control. Dealing with a debt problem can feel hopeless, but you are not alone – and solutions and support are available. You deserve to live without debt and its overwhelming stress

Get support, understand your options and move forward with the debt-free plan that’s right for you. Connect with a local Licensed Insolvency Trustee today.

The post What Happens if I Can’t Afford my CERB Repayment? 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.