Debt Free in 30

Heather Cudmore is a credit counsellor with Carizon Family and Community Services in Kitchener, Ontario, and on today's show we discuss credit counselling. Who does a credit counsellor work for? Is it true that they are just a collection agency for the big banks? What does it cost? What are the fees? Isn't a debt settlement better and cheaper? What about other options? Answers to those questions and a lot more on today's show.

For the month of August we are rebroadcasting (with updated information) our most popular shows. Dr. Lee Anne Davies, co-author of When Life Bites You in the Wallet, discusses the financial challenges faced by seniors and gives practical advice for over-coming "Bag Lady Fears". In an updated introduction to the podcast, we discuss some of the findings from our 2015 Joe Debtor study that revealed that seniors have the highest debt, and are also turning to payday loans. We discuss the implications, and options for dealing with debt.

From now until Labour Day we are rebroadcasting (with updated information) our most popular shows. Today’s guest is Christi Posner, a credit counsellor and new mother. Christ starts the show by telling us how, after graduating from university she had a lot of debt. She got married, and she and her husband wanted to start a family, so they knew they needed to tackle their debt. They did. They paid off their debt, and were in good shape financially to start a family. Even though Christi is an experienced credit counsellor, there were many expenses that surprised her when she went on maternity leave. She shares her practical tips for preparing for the birth of your first child, and gives advice on how to save money while on maternity leave.

On today's show I talk with Adam Rauf, a trustee in bankruptcy and consumer proposal administrator at the Hoyes Michalos St. Catharines and Niagara Falls offices. Adam receives many questions from his clients and came in with a list of 20 concerns that people have when they come in to see him to get out of debt. We narrowed down his list to some questions about what type of debts can be eliminated in a bankruptcy: Can I give back my financed vehicle and get out of my car lease if I file bankruptcy? Will my 407 debts be eliminated in a bankruptcy? If I pay off my consumer proposal early, will there be a penalty? Can a bankruptcy or consumer proposal stop a law suit or wage garnishment due to unpaid debts?

Trustee in Bankruptcy, Benny Mendlowitz answers the most pressing questions about paying down debt by filing bankruptcy. Benny is a trustee at Hoyes Michalos in charge of our Scarborough and North York offices and during the show he answers these frequently asked questions: What does it mean to go bankrupt? What does it cost to go bankrupt? What if I don't want to go bankrupt? Can I keep a credit card during bankruptcy and how will filing affect my credit score? How can I get rid of the stress caused by my overwhelming debt? Benny points out that not everyone has to go bankrupt. However if you can't pay your bills, have credit card debt, struggle with your car payments you need to do something. Meeting with a bankruptcy trustee is a start.

Today’s guest is Joel Sandwith, trustee in bankruptcy and consumer proposal administrator at Hoyes Michalos working out of our London and Sarnia offices. Normally we broadcast an FAQ show on the last Saturday of the month, but we receive so many questions that are worth taking the time to answer that we decided to run an FAQ series during July; starting with this one. To prepare for this show Joel made a list of the most frequently asked questions that he receives from clients. The burning questions on everyone's mind focuses on credit rebuilding, what happens to a house when you file bankruptcy and why clients should choose Hoyes Michalos. Tune in for the answers to these questions.

Today’s guest is Daniel Veinot, a lawyer and partner at Duncan Linton in Waterloo, and we discuss student loan debts and how they are handled by bankruptcy law. Daniel discusses whether student loans are automatically discharged in a bankruptcy or consumer proposal, when it's possible to go to court and how many years an individual needs to be out of school before they can discharge any outstanding student loan debts. Student loan debt is on the increase. In May, 2015 we released our biennial Joe Debtor study assessing debt levels based on over 6000 client files from 2013-2014 and revealed that student loan debt is a growing problem in Canada. From that study we found that 13.4% of people who filed bankruptcy or a consumer proposal with us had student loan debt (up from 12.7 two years earlier). What's more, average student loan debt increased 4.3% over the past two years to just under $14,000. On today’s show we discuss the law, and your options for dealing with student loan debt.

Right now, interest rates are at record lows, benefiting those who have good credit. But what if you don't have good credit or can't get credit at all? Today’s guest is Jim Dunbar, the Managing Partner and Chief Commercial Officer for Affirm Financial Services, a company that provides consumer loans, term loans and unsecured credit cards to individuals who have been turned down by the banks. Jim explains the type of credit card that they offer, who the card is intended for and how it could help to rebuild credit. Disclaimer: The guests that on this show offer a different perspective and many times a different one than my ours. We have people on this show not as a commercial for their product, but rather, to provide information and multiple points of view for my listeners. The guests on this show are not paying to be here and alternatively, they are not being paid to talk to us. Nor are we endorsing their views or their product. What we are here for is to discuss options. All financial decisions should be researched and assessed as a specific solution to your unique situation.

Richard Dunwoody has 30 years experiences providing consulting services to the financial services industry through AFO Venture Group. On today's show Richard offers his opinion on how credit counselling agencies in Canada operate and what this means to consumers. At our firm we work a lot with local, not-for-profit credit counselling agencies that meet face-to-face with clients using a "whole person" approach. I am a supporter of these kinds of organizations because they meet with people face-to-face, help people deal with the underlying causes of their financial difficulties and teach useful money management skills like creating a budget and finding ways to save money. In fact, I've had two local credit counsellors on this show: Heather Cudmore from Carizon in Kitchener and Sue Davey from Brant Family Counselling. Richard's disapproval does not lie with these local not-for-profit agencies, but rather, the systems in place in Canada for credit counsellors regarding aspects like qualification and accreditation. He also expresses concerns that consumers are not asking the right questions when it comes to entering into a program like a debt management plan to deal with their debts.

Before now, there really were no rules governing debt settlement companies in Ontario, which meant that they could charge large up-front fees, only to refer the client to a bankruptcy trustee once legal action was taken by a creditor. The process has already started and on January 1st, 2015 the Collection Agency Act was renamed the Collection and Debt Settlement Services Act. On today’s show Ted Michalos talks about the new legislation and what it means for consumers. We often hear that clients are afraid to seek help from a trustee in bankruptcy because of the stereotypes and misconceptions about the process. Debt settlement companies feed off this fear by placing ads claiming to be able to settle their debts for pennies on the dollar, while avoiding bankruptcy. Unfortunately, more often than not, these informal debt settlement companies fail, hurting the consumer both emotionally and financially. The new debt settlement legislation attempts to protect consumers from these abuses.