Category Archives: Keeping your Clients Informed

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

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

Supporting Clients and Patients with Divorce Debt

Canada has the 8th highest divorce rate in the world. Human Resources Development Canada has reported that the proportion of marriages expected to end in divorce has fluctuated between 35% and 42% in recent years. In 2008, 40.7% of marriages were expected to end in divorce before the 30th wedding anniversary. In 2008, there were 70,226 divorces in Canada or 2.11 divorces per 1,000 people.

Divorce debt in Canada is also very common. Human Resources Development Canada also reported that in 2008, 115,789 Canadians were unable to repay their debts. Serious financial difficulties brought them to file either a consumer proposal or a bankruptcy. Individuals who were divorced or separated were more likely to file a proposal or bankruptcy.

Why is divorce debt one of the leading causes of bankruptcy in Canada? The answer is fairly simple. First, two income households will often accumulate debt based on their “household ability to pay the debt”. The challenge with this is that debt is accumulated based on two people sharing living expenses and when people separate, living expenses will double because now each party has to pay for rent or a mortgage and living expenses separately. When household debt is present this can make it challenging to pay it.

Second, some marriages will involve one person working and one person raising the family. When divorce occurs, the party who hasn’t worked will likely have little to no income but be faced with the immediate expense of having to hire a lawyer and also live. In many cases this forces the party who has been home raising the family back into the workforce. Individuals who have been out of the workforce for a long time often have to re-enter it in junior or entry level positions.

Third, sometimes one party in a marriage may carry all of the debt in his or her name. Much of the debt may have been used by the other spouse. There is nothing worse than getting a divorce and then finding yourself having to pay your spouse’s debt.

Legal protections may result in the party who has the weaker financial positioning receiving support payments, being awarded the house, having the other party take responsibility for the debt, but this can take years. Also, the legal fees that compound over the course of a divorce may end up being more than the debt that was owed to begin with.

We work with marriage counselors, family therapists and even family lawyers to help their clients come up with post-divorce financial strategies.

If you have a client who needs help or if you would like to host a WeCare day where we can come out and speak with your clients/members about coping with the financial aftermath of a divorce, please email me at kgoldenberg@debtcare.ca, call 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.

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.

Knowledge Lessens the Stress of Financial Planning

Now that your clients have made it through the holidays are they ready for tax season?

Tax season is in fact a time of year where Canadians come into even more debt than the holiday season. During the holidays one may rack up a credit card debt or two but when an individual is in a position where he or she knows that once he files a tax return he will be facing a large debt, the stress can be overwhelming.

This leads many Canadians (your members and clients included) to ignore their tax problem hoping that it will just go away by itself and it won’t. Keeping your clients informed about the consequences of filing late returns can save them thousands of dollars. Penalties for late filing tax returns are severe and include financial penalties, interest and even prosecution.

While your clients prepare to file their late returns they can start financial planning to cope with the new debt that’s coming down the pipeline and DebtCare can help. Not only can we work with your clients to come up with a financial plan to deal with their tax debt but we also have access to programs to find them relief if the amount that they owe is more than they can pay.

Give your clients the gift of less stress this tax season and contact me to arrange a WeCare Day at your office so that you can help your clients get informed. I can be reached at 416-907-2582 ext 2587 or email me at kgoldenberg@debtcare.ca.