Category Archives: Credit Card Debt

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.

When People Divorce Credit Card Debt Can Become Difficult to Manage

When people divorce many different financial problems can emerge. Both spouses will find themselves dealing with their finances on a single income. If one spouse wasn’t previously managing the household finances, she will now have to learn how to manage bills. Individuals may find it difficult to manage debt, such as credit card debt, on their own. One spouse may end up with the responsibility of paying the marital credit card debt on his own.

Divorce is one of the leading causes of bankruptcies and consumer proposals in Canada. Those who don’t end up in bankruptcy or in a consumer proposal still may be struggling with debt and may have damaged their credit as a result.

If you help people who are going through a divorce, a conversation about their debt and how they are managing their finances should take place. Even if you don’t deal with the financial aspects of a divorce it is important to know if your client is struggling with divorce related financial problems because your client’s financial problems could be fuelling mental health issues, damaging her quality of life,  disrupting his  employment or ability to gain employment and more.

Helping your client address her financial problems could be the key to a fresh start after a divorce. At DebtCare Canada we are committed to education in this regard. Check out the article we released last month “How to Make a Credit Card Debt Settlement” and feel free to share it with any clients you feel may find it helpful. http://www.debtcare.ca/articles/how-to-make-a-credit-card-debt-settlement/

Also, if you help people who are going through a divorce we can help you to help them address financial problems. Please reach out and I can send you more information about our WeCare Canada initiative and also about a new program for recently divorced individuals, “Budgeting in Transition.” 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