90 Days to Financial Stability

I help people with unsecured debt get lower interest rates, pay their debt off faster and save money. Do you know what the most important phrase in that sentence is? Lower Interest Rates. In my opinion, that is the key to getting control of your unsecured debt. Anyone who has ever had a credit card or line of credit knows the frustration of making payments then when the bill comes due again, seeing very little of the balance reduced. It is so aggravating! People feel like they will never get out of debt. But you can. To prove my point on how you can save money by reducing interest, I want to tell you a story. At one time, I had three Mastercards - BMO, Canadian Tire and President's Choice. The Canadian Tire card had an interest rate of 19.99% and the President's Choice, 19.97%.  I took the amount that was owing on the Canadian Tire card from my line of credit at 10.5% interest and paid off the Canadian Tire card.  When I phoned to cancel that card, the supe...

We've talked about getting out of debt using debt consolidation and debt settlement. But what if those methods aren't of any use to you because you are just too far in debt? Then you may have to consider bankruptcy. Sometimes that is the only way out but there are things you should know. You can't file bankruptcy on your own. You need a bankruptcy trustee to do that and the trustees will charge you fees for this service - from several hundred dollars to $1,000 in court filings and legal fees. And the trustee's job is to get as much as possible for the creditors. The trustee is going to want you to keep track of your spending while the bankruptcy is being arranged. They are also going to need to know your assets. A portion of your income during the first months before the bankruptcy is discharged will go to your creditors and if you happen to come into a lot of money before the bankruptcy is discharged, these funds will go to the trustee and to the credito...

Many people hear debt settlement and think what a great idea. They will negotiate with their creditors to pay a lower sum than what is owed and the debt will disappear. The debtor will pay less money, the creditor will get some of what they are owed and life will go on its merry way, right? Not quite. There are consequences to taking this route to get out of debt. What usually happens is the debtor contacts a debt settlement company. The company will take the payments the debtor was supposed to be making to the creditor and hold it in a special fund. Then, when the debtor has fallen significantly behind in their payments, the settlement company will contact the creditor and negotiate a lower balance. But what if the debtor was current on his/her payments but has followed the advice of the settlement company? Now, their credit record has been damaged and will remain so for the next 7 years. There are dangers to this method of getting out of debt. Especially if the debtor gets...

Debt consolidation. We've heard a lot about it but what exactly is it? Simply put, it is a loan that will allow you to pay off ALL of your other smaller loans. Because you are going through a bank for the loan AND because you are combining all the debt into one payment, you will usually pay less interest. Which means you will be able to pay the debt off faster and save money. There are a few benefits to obtaining a debt consolidation loan. You will get a lower interest rate. One payment instead of multiple ones may be easier to maintain. Your creditors will be paid off immediately by the bank. If your credit rating hasn't been too damaged, you will be able to save it. You will get out of debt faster. You will pay less interest. The advantage of a debt consolidation loan is that it can make your life a lot easier. And as long as you adhere to the procedures stated, your credit rating should not be negatively affected. If you have a valuable asset like...

A tax-free savings account - TFSA. We've heard a lot about them but what does it actually mean? In 2008, Finance Minister, Jim Flaherty, introduced the TFSA in the Federal Budget. The C.D. Howe Institute stated,    “This tax policy gem is very good news for Canadians, and Mr. Flaherty and his government deserve credit for a novel program”. Other organizations such as Canadian Federation of Independent Business, Canadian Bankers Association, Bank of Montreal economist Doug Porter, the Canadian Chamber of Commerce and the Canadian Taxpayers Federation also supported this policy.    If you are 18 years or older, you can put money away into a registered TFSA and you are not taxed on any income earned from that contribution. You can also withdraw money any time you want and you don't have to pay taxes on it.Unlike a RRSP, contributions to a TFSA are NOT tax deductible. So how much can you put into a TFSA? That depends on the year. Years TFSA Annual Li...

Summer is almost over. Labour Day weekend is almost upon us and after that, school starts. The lazy, hazy days are over for another year. As our thoughts return to the education of our children, panic may set in. The costs of post secondary education have been rising and we don't want our children to start off their professional lives, drowning in debt! So what can a parent do? RESP's - Registered Education Savings Plan - are the first thought. Especially since the government will contribute 20 cents for every dollar you put in, up to $500 on an annual contribution of $2,500. Although there are no limits to yearly contributions, there is a lifetime maximum of $50,000. Now, if you are a low-income family, there is more help from the government. You can apply for the Additional Canada Education Savings Grant (A-CESG). This money is added to the RESP to help reach the maximum contribution amount. And it can be used if the child wants to go to university, college, trade sc...

So, for whatever reason, you have found yourself drowning in debt and now the debt collectors are calling. It is so stressful! What are you going to do? How are you going to deal with these nagging, aggressive, abusive collectors? Stay calm. I'm here to help, so let's look at a few steps you can take when dealing with debt collectors. (I am consulting a few places online for information, namely  The Financial Consumer Agency of Canada. ) First thing you have to do is to find out whom you are dealing with. Is it the original creditor or a collection agency? Usually, before the collection agency calls you, you will be notified beforehand that your debt has been turned over to them. Write down the name and telephone number of the person who is contacting you as well as the company name. Also, be sure to get the amount and other pertinent details regarding the debt owing. That way you can check your records and verify the debt. Tell the collector you will call them b...