Category Archives: Collection Debt in Canada

Is a Direct Referral to a Bankruptcy Trustee a Good Idea?

If you have clients that are dealing with debt, they may have questions about consumer proposals and bankruptcy. Both are important options for those that are struggling to make their monthly payments, but there are important things that need to be considered before you clients choose to take either route.

One of the most important is to let them know that going directly to a bankruptcy trustee is not the smartest choice. Instead, having independent financial representation will allow your client to have their best interests represented, rather than relying on the advice and work of a court appointed official whose responsibility is to both the client and the creditor.

The problem with going directly to the trustee is that they are not obligated to find your client the best deal or to try and save them the most money. Furthermore, trustees will often collect equity in your clients’ assets or surplus income for the benefit of the creditors.

Consumer proposals are also administered by trustees in bankruptcy. When your client goes directly to a trustee for a consumer proposal, the trustee will propose an amount and present it to the creditors to be paid back. If this amount is agreed on, your client has no recourse for negotiation, and must accept whatever deal is made – regardless of whether or not it is the best.

If any of your clients are considering filing for bankruptcy or a consumer proposal, and you want more information to be able to support them, please contact me by emailing kgoldenberg@debtcare.ca, call me at 416-907-2582 ext 2587 or visit www.debtcareservices.ca.

How to Help Your Clients Face the Financial Problems that Come with Divorce

Debt and financial problems are one of the leading causes of divorce in Canada, and all too often debt and divorce go hand in hand.  If your clients are in the midst of a divorce, providing them with information about how to deal with the financial repercussions can be very important.

There are several things that a financial professional can help with, including:

–          Learning how to manage a budget: figuring out how to best prepare for life on one income. Budgeting also plays a key role in ensuring that all payments to creditors get made on time each month.

–          Dealing with the debt that already exists and being able to manage the monthly payments in order to keep credit in check. This may involve helping choose a solution to getting rid of the debt altogether.

–          Working with your client to consolidate that debt or file a consumer proposal to reduce monthly payments and keep credit payments from being neglected.

The best advice you can give to your clients to deal with the aftermath of a divorce and the debt that has resulted from it is to seek financial guidance from a financial professional who can represent them in the restructuring of their debt.

Being able to provide your clients with the support that they need is important, and if they are going through a divorce, this so often includes financial information.  If you have clients that are dealing with divorce debt, please reach out to me. I can be reached at 416-907-2582 ext 2587, or by email at kgoldenberg@debtcare.ca.

Who Should You Refer to Not-for-Profit Credit Counselling?

Thousands of Canadians suffer from debt, and often don’t know where to turn for help. If your clients find themselves in a tough financial situation, not-for-profit credit counselling may be an option they can consider.

Credit counselling is a service that helps many Canadians deal with financial challenges. Like any other financial solution, it does have its pros and cons. While credit counselling can help Canadians with any amount of debt, it is best suited to those individuals who owe $7,000 or less in total debt. For those clients with more debt, a consumer proposal or other solution may be a better option.

The credit counselling agency will make a proposal to creditors to create a reduced, fixed monthly payment. This proposal is not a consumer proposal and it will not reduce the overall debt. It simply provides for a reduced monthly payment.

The main benefit with credit counselling is that it allows your clients to manage their monthly payments.

There are also some cons, including:

  • Damage to credit – although this has likely already occurred
  • Overall amount of debt isn’t reduced
  • Repayment plan can extend over many years

Generally speaking, it is advisable to encourage your clients to seek financial guidance from an independent financial professional who can help them make the best financial decision and who does not work for the company that is providing the services, rather than going directly to the source.

If you would like to get informed about the differences between credit counselling and other debt solutions and which one is best for you clients, please call 416-907-2582 ext 2587 or email me at kgoldenberg@debtcare.ca.

Helping Clients Who Have Tax Problems

Tax problems impact thousands of Canadians each year. Those who are self-employed, newly divorced, or who struggle to maintain their books are often among the first to be impacted by tax problems.

If you are an accountant, divorce lawyer, or work with self-employed individuals, then you likely encounter people who have tax problems. Once it is determined that an individual has a tax debt that they can’t pay, the real trouble starts. The Canada Revenue Agency wields incredible power and if your client is targeted, there will be little that you can do to help them.

If your client has a tax debt that they can’t pay, it is crucial that he or she comes up with a plan before the Canada Revenue Agency comes after them. This is where we come in.

We understand CRA enforcement practices, policies and procedures and we have the resources to be able to help individuals with the financial aspect of his or her tax problem.

Here is an article released by DebtCare Canada that educates individuals about the implications of missing the income tax deadline that you may want to share with your clients. http://www.debtcare.ca/articles/the-canada-revenue-agency-consequences-of-missing-the-income-tax-deadline/

Education plays a major role in helping people to avoid tax problems and also to face them if they come up.  At DebtCare Canada we take financial education very seriously and often work with organizations that help people who have tax debt. If you have clients facing unmanageable tax debt, please reach out to me. I can be reached at 416-907-2582 ext 2587, by email at kgoldenberg@debtcare.ca and you can find more information about our business to business services at www.debtcareservices.ca

You May Have Clients Whose Wages Are Being Garnished and Don’t Even Know It

When people have social issues, they often also have financial problems. The two regularly go hand-in-hand. If you help people who are facing social issues, such as an addiction, mental health problems, or hardships resulting from a divorce, it is important to understand that there may be financial issues that have emerged because of the problem, or financial issues that contributed to their problem.

Often solutions to financial problems directly improve the social issues that people face. Usually those with financial problems suffer in silence because they are too embarrassed to let the people around them know that they are struggling.

Wage garnishments are extremely embarrassing because when one occurs the individual’s employer is notified. Wage garnishments result in crushing hardships to your clients and if you help people who have financial problems it is important to have (delete up) a dialogue on the subject so that they know help is available.

Here is an article that we released at DebtCare this past month that you can share with your client. Titled, “What Is a Wage Garnishment?” it will educate your clients about what they can do if they need help dealing with one. http://www.debtcare.ca/articles/wage-garnishment-we-explain-what-is-a-wage-garnishment/.

As you know, at DebtCare Canada we make it our mission to help people who struggle with debt. Through our WeCare Canada initiative we work with organizations that help people who have social issues deal with their debt and organize their finances. If you would like information about the WeCare Canada initiative, would like to host a WeCare day, or if you simply know someone who could use some help with a financial problem, please contact me today. I can be reached at 416-907-2582 ext 2587, by email at kgoldenberg@debtcare.ca and you can find more information about our business to business services at www.debtcareservices.ca

Helping People Who Have Income Tax Debt

Accountants are often the first to know that their clients are about to have a major financial problem. If you work in the accounting profession then you know that many, many Canadians struggle with income tax debt in Canada.

Once a tax return is filed late or re-assessed resulting in an amount owing, the Canada Revenue Agency will add penalties and interest retroactively on this tax debt which may cause it to double and even triple in size.

When a large income tax debt is owed to the Canada Revenue Agency it can be paralyzing. The Canada Revenue Agency will demand to be paid in full and has incredible authority and resources to collect the income tax debt owed.

Many people feel so overwhelmed when they have a tax debt that they simply ignore it because facing it is too stressful; but this is the worst thing to do because the Canada Revenue Agency will catch up eventually and the consequences will be catastrophic.

If the taxpayer does not have the liquidity to pay off his or her tax debt, then he or she needs to get financial help immediately, beginning with working with a debt consultant to weigh his or her financial options. Income tax debt is like any other debt. There are Federal Government Programs in place to provide Canadians with a legal avenue to deal with their debt. These avenues in many cases do not involve bankruptcy and can stop Canada Revenue Agency collection action.

If you have a client who is struggling with an income tax debt or if you would like to host a WeCare Day to provide education to your clients about how they can deal with tax debt once their returns have been filed, please contact me by emailing kgoldenberg@debtcare.ca, call me at 416-907-2582 ext 2587 or visit www.debtcareservices.ca.

Gambling Debt in Canada

Gambling debt in Canada is an epidemic not unlike the flu. Addiction is an illness and gambling is something that is highly addictive. Casinos are more accessible than ever in Canada and what can begin as harmless entertainment can quickly turn into a serious life-altering addiction.

Many people realize that they have a problem when gambling habits lead to disruption in major parts of their lives. Financially, problem gambling can lead to a loss of income, potential loss of assets, lowered standard of living, or even a loss of employment. Personally, problem gambling can cause conflict with loved ones, and can lead to alienation from family and friends.

CTV News recently reported on a study from Statistics Canada that showed that wealthier people, on average, spend more money on wagering, but gamblers who have less money spend a larger percentage of their income on gaming activities.

According to the CTV report, Statistics Canada says that 6.3 percent of people are thought to be “at risk gamblers and problem gamblers.” Problem gamblers make up 0.6 percent of the Canadian population which is roughly 180,000 people. The Statistics Canada definition of a problem gambler is someone who has experienced negative consequences of gaming and who gambles more than five times a year.

If you work with people who are problem gamblers resulting in financial ruin, help them stand up against it!

There are many financial programs available that help gamblers who are dealing with a gambling debt in Canada and access to these programs is available through DebtCare.

You can host a WeCare day and make a difference. We will come out to your facility and speak with your clients about the financial consequences associated with gambling and how they can deal with them if they have occurred.

If you would like to host a WeCare day, please contact me by emailing kgoldenberg@debtcare.ca, call me at 416-907-2582 ext 2587 or visit www.debtcareservices.ca.

Another Life Lost to Addiction

The recent loss of Whitney Houston has re-opened the conversation on the ultimate price that one can pay for an addiction, namely, his or her life. Like so many famous celebrities who have passed away in recent years Whiney Houston spent most of her life battling addiction. She was not alone.

For every one celebrity who faces financial ruin or worse, loses her life as a result of addiction, hundreds of thousands of regular folks who don’t make it on to the front page of the newspaper suffer in silence.

Addiction is serious and can not only lead to medical problems and death but can be the cause of financial turmoil that has resulted in some people even ending up homeless. Just as an addict needs professional help to get control of his addiction, he also needs professional help to get control of his debt.

Addiction manifests in many different ways and often does not involve drug use. Gambling and shopping addictions are two common forms of addiction that lead many into personal bankruptcy.

If you treat people who struggle with addiction you are likely also treating people who have financial problems too. DebtCare offers resources and education to people who struggle with debt and we can work with you to educate your clients, members and/or patients about how to deal with their financial challenges. If you would like to learn more, contact me about our WeCare Days at 416-907-2582 ext 2587 or email me at kgoldenberg@debtcare.ca

Helping Your Members/Clients Cope with Collection Agencies

Many people have collections debt in Canada. We work very hard to help organizations to educate their clients/members about how to cope with collection agencies through educating them about their rights.

Loans, credit card balances, utilities, phone bills, gym memberships, toll bills and traffic fines are all examples of debt that may be assigned to collection agencies to be collected. Some collection agencies will use aggressive tactics to collect debts.

The good news is collection agencies in Canada are regulated in most Provinces. This means your clients/members have rights! In Ontario for example, the Ministry of Consumer Services regulates collection agencies through the administration of the “Collection Agencies Act”. Your clients/members can view the Ontario Collection Agencies Act on the E-Laws website. If a collections debt in Canada has been incurred and a collection agency is getting out of hand, your client/member can complain to the Provincial Ministry that regulates it. Some Provinces will receive online complaints (as is the case in Ontario) while others will require that a letter be mailed to them which includes evidence to support the complaint.

If your client/member is being pursued by a collection agency in Canada, it is likely because he or she is dealing poorly with debt. Rather than facing collection action, it is better to come up with a solution to deal with the debt, and there are solutions available. There are a number of programs available that help people to deal with their debt and stop collection action. Dealing with debt can cause stress and strain to relationships and many people think that the only way to get out of debt is through personal bankruptcy. This is not the case. There are other solutions to dealing with debt that involve freezing the interest accumulating on debt and also reducing the principal amount of debt owed.

When facing debt the worst thing to do is ignore it. This will only prolong the length of time that credit is damaged and the debt will not go away but will only continue to grow over time. The faster your clients/members deal with their debt, the faster they can work towards rebuilding their credit and finances and put the period in their life where their debt got out of control behind them.

If you would like to organize a WeCare day at your organization to provide your clients/members with important information about dealing with collection agencies and debt, please reach out to me by emailing kgoldenberg@debtcare.ca, calling 416-907-2582 ext 2587 or visit www.debtcareservices.ca.