Debt Free in 30

There's a growing number of people owing money on their tax debts. This is in part because more people are self-employed, or have more than one job, and partly due to a growing seniors population. Getting into tax debt can be relatively easy, and dangerous to your financial health if you don't deal with it quickly. Today's podcast discusses ten tips on dealing with the Canada Revenue Agency and tax debts from our in-house tax expert and Licensed Insolvency Trustee Ian Martin. Your income tax is based on your total income for the year. If you're working for a company, that process is automated for you and the appropriate amount is taken off. But what if you have more than one job and one doesn't know about the other? What if you have pensions coming from different locations? These tips deal with how to avoid complications with the CRA, as well as what you can do to deal with those tax debts.

Debt doesn't start out as an obvious problem. For many people, lack of personal finance knowledge leads them to make poor decisions with their money. Once you figure out how easy it is to get credit, you start spending more and more because, hey, it's there. Today's guest is a former Hoyes Michalos client, and like many of our clients, he struggled with severe debt. Beau started gambling at a young age through seemingly harmless games like scratch tickets. From there, it evolved to online card games throughout university and he eventually dabbled in "pretty much everything else you can think of". Beau had a full-time job so for him, gambling wasn't a means to earn income, it was his source for exhilaration. The main problem that Beau had was that credit was the only way he knew how to have that instant access to cash to gamble. I'm just kind of at my wit's end and I'm thinking, you know, I'm never going to be able to afford these credit card payments that I have if I keep going. After working with a counsellor at the Canadian Association for Mental Health (CAMH), Beau found the source of his addiction: he had gone undiagnosed with ADD his entire life. After starting on his medication, and looking through nearly $40,000 in unsecured debt, Beau knew he needed a change. On today's show, Beau discusses his consumer proposal, and how he recovered from both gambling and debt.

As Licensed Insolvency Trustees, our clients tell us how difficult it is to live on minimum wage. That's why they often have no choice but to use debt to survive. The average person we help file a consumer proposal or bankruptcy has an income that is almost 40% less than the median income in Ontario; in many cases our clients are working minimum wage jobs. Our clients don't have a debt problem; they have an income problem. If minimum wage isn't enough to survive, the solution would appear to be quite simple: raise the minimum wage. That's exactly what the Ontario government is proposing to do, raising the general minimum wage from $11.40 per hour to $15 per hour on January 1, 2019. So won't that big increase in the minimum wage solve all of our problems? No, because, unfortunately, a minimum wage is not a living wage. On today's show we explore the reasons why a government-mandated minimum wage is likely to do more harm than good, and we propose a more effective solution to our income problem.

We know from our Joe Debtor study that the average person in Ontario who files a consumer proposal or bankruptcy has an income that is almost 40% lower than the median income in Ontario. Low or sporadic incomes make it difficult to keep up with the cost of living. The Ontario government has recognized this fact and has started a pilot project for basic income in three cities across the province. Hamilton is one of those cities, and with me today is Tom Cooper, Director of the Hamilton Roundtable for Poverty Reduction, to discuss how this pilot project may help alleviate poverty in Hamilton. This basic income pilot project is an initiative to reduce poverty in our province and provide people with a basic standard of living. Many existing benefits are not enough for people to pay rent, food, and transportation costs. As a result, more people turn to debt to make ends meet as noted in our 2017 Joe Debtor study. On today's show we discuss basic income and a living wage as a way to increase incomes in Ontario.

The number of seniors filing insolvency is growing. Many seniors have the honest intention of paying back whatever debt they accumulate. That would be great, except they're using new debt to pay for it. We've recently written about seniors increasingly turning to payday loans, which is one of the most expensive forms of lending. High interest rates paired with a fixed income aren't a good combination for anyone. The challenge that seniors are seeing is not that they are incapable of living off of their savings and pension payments. Why are insolvency rates for seniors increasing? What can seniors do to avoid insolvency? Those questions and more answered on today's edition of Debt Free in 30.

For the first time ever, the federal government just issued a BOMBSHELL report, saying that it appears that two very large debt consulting firms in Canada are taking advantage of vulnerable consumers. They charge large upfront fees, and often they only service they provide is to refer you to a Licensed Insolvency Trustee. On today's show we discuss what the government reports says about unlicensed debt consultants, and we provide practical advice for consumers on how to avoid paying for a service that you don't need.

As you may remember, we published our Joe Debtor study at the end of March 2017. This study takes place every two years and analyzes data from insolvent debtors from across Ontario. When it comes to homeowners, we're seeing a steady decline in the rate they're filing insolvency. That doesn't mean they're without debt, it just means they're getting creative with how they hold off insolvency. Although only 17% of all insolvent debtors in our 2017 study were homeowners, roughly 30% of people who call into our offices are homeowners looking for help dealing with their debt. Because home values are so high right now, it may make more sense for the caller to pull from their home equity to help pay off their existing debt, or even sell their home to pay off their debts in full. Full details on how to avoid excessive mortgage debt on today's show.

There are two major purchases we make in our life that we typically use debt to purchase. The first (no surprise here) is our home, and the second is our car. But can car loans lead to insolvency? Believe it or not, yes car loans can lead to insolvency. As cars are getting more sophisticated and fitted with new gadgets and features, which means they're also getting more expensive. You're no longer buying just a car, you're buying a driving computer. Instead of the days where we could just pay cash up front for our vehicle, we're presented with loans and leases as a way to stretch the total amount over a number of years. In some cases, car loans extend up to eight years. This makes cars more affordable for the every day consumer, which is great for car companies as they're able to continue with the technological evolution of their cars. But, they can get expensive, so on today's show Doug Hoyes explains why we get into debt with cars, and he gives practical advice for dealing with car loan debt.

Welcome to the third round table edition of Debt Free in 30, recorded in person at the Hoyes Michalos offices in downtown Toronto, so you can listen to the audio, or watch the video on YouTube. My guests today are all personal finance experts based in Ontario. Kerry K. Taylor writes the very popular Squawkfox blog; Robert Brown wrote the best selling personal finance book Wealthing Like Rabbits; and Barry Choi writes on the Money We Have blog about personal finance and travel. Today we cover three stories in the news: Banks behaving badly – starts at 4:01 Social Media Influencers – who can you trust? – starts at 15:52 The Toronto Real Estate Market – starts at 30:43 (where I predict that prices peaked on Wednesday April 26, 2017)

Many seniors are finding it increasingly difficult to make ends meet. Our 2017 Joe Debtor study showed that the total number of debtors who are seniors is now 12%, up from 2015's 10% and up again from 2013's 8%. With fixed incomes, potential long-term care options and adult children to think about, there are a lot of ways seniors can end up in debt. My guest today is Vanessa Benedict, a Wealth Advisor with one of the largest banks in Canada. Vanessa's job covers everything from estate planning, financial planning and investment portfolios. Vanessa has many seniors as clients and is always surprised when someone in their 60's still has significant mortgage debt. These are people who saw their parents live so frugally and wanted more for themselves, and for their children. But how much is too much, and who do you turn to for advice? All that and more on today's show.