Debt Free in 30

It's time for another FAQ podcast and today we talk about if and when you might be responsible for your spouse's debt and how one spouse filing bankruptcy might affect the other. To answer these questions we talk with Hoyes Michalos Trustee in Bankruptcy Jason Quinney about joint debts and co-signed loans. Jason explains what a joint debt is, what happens to a co-signer if a debt goes unpaid and clears up the misconception that joint debts settled in a bankruptcy or consumer proposal need to be filed individually.

Today’s guest is Ian Penney, President of Janes & Noseworthy in Newfoundland and Labrador. Recently, oil prices have declined, affecting the finances of those who work and/or live in a boom-bust economy. Alberta is a prime example of this type of economy, but the sting is also being felt in Newfoundland and Labrador. As lay-offs continue and people are forced to find alternatives, Ian has noticed that personal finances are taking a hard hit, and that as a result, people are turning to bankruptcies and consumer proposals to eliminate debt. When oil prices were lucrative and the industry was booming, many Canadians joined the ranks to cash in; including a high volume of workers from the east coast. Oil companies would often fly workers home on their off days and set them up in a hotel or a camp while in Alberta - life was good. But now that oil prices have fallen, how are workers coping? That’s the topic of discussion on today’s podcast, and Ian gives some practical advice for managing debt in a boom and bust economy.

So you’ve got a bunch of debts. You owe money on three different credit cards, and a payday loan, and you still owe some money on an old cellphone bill. You’ve got a job, and you’ve got money coming in every month, but it’s hard to juggle five different debt payments every month, all on different days, in addition to all of your regular bills. Wouldn’t it be great to consolidate all of your debts into one monthly payment? No more juggling your paycheque to make a bunch of payments every month; you would just have one easy monthly payment. Sounds great, right? Debt consolidation does sound great, and in some cases it is a good idea. Other times, not so much. On today’s show Mark Moreau explains how you can use the equity in your home to consolidate your debts, and he explains why it may or may not be a good idea.

On today’s show Ted Michalos and Doug Hoyes discuss the just released Hoyes Michalos study: Joe Debtor: Marginalized by Debt. Canadians do not appear to be worried about high debt levels. Interest rates are at record lows, and bankruptcy rates have declined for the last five years. Unfortunately that obscures the fact that at risk groups, including seniors, single parents and people with student loans, don’t qualify for traditional low cost borrowing options, so they turn to payday loans, quick cash installment loans, and other high interest crippling forms of debt. Doug and Ted discuss the results, and explain how to recognize the warning signs of excessive debt.

Today’s guest is Mark Silverthorn, who was once the most prominent collection agency lawyer in Canada, sending out 10,000 collection letters every month. Today he’s a consultant for debtors, and is the author of The Wolf at the Door, a book about “What to do when collection agents come calling”. Mark Silverthorn says on the show that collection agents have every right to collect money that is legitimately owed, but he believes they should follow the rules and behave in a professional manner. He surveyed his contacts in the collection industry and gives us the five dirtiest tricks used by collection agents, and gives advice on how to avoid or stop collection calls.

On today’s show Ted Michalos explains that bankruptcy isn’t free. Even though you may have limited resources, it does cost money to go bankrupt. Ted explains why it costs money, and how the concept of surplus income impacts on the cost of your bankruptcy. Ted also explains how a consumer proposal is an effective solution for avoiding the excessive monthly cost of bankruptcy.

On today’s show Leigh Taylor, a bankruptcy trustee with LC Taylor and Associates in Winnipeg, gives his opinion on how to deal with debt. He explains why cashing in your RRSP to pay off debt may not be a good decision. He also explains why you should avoid co-signing a loan, how debt consolidation works, and whether or not you are a good person if you have debt.

On today’s show Vikram Barhat, a finance writer whose work has appeared in The Globe & Mail, BBC, and Morningstar Canada, answers a common question: If I save up $1,000, should I use it to pay off debt, or should I contribute it to my RRSP? It’s a difficult question. Paying down debt saves future interest, but contributing to an RRSP generates a significant tax saving for many people. Vikram provides his thought process for helping make that decision. In the Let’s Get Started segment gives his thoughts (and not surprisingly he is not a big fan of debt).

On today’s show we talk with mortgage agents Michael Smele and Bev Gay about whether it's possible to get a mortgage to buy a house after, or even during, a personal bankruptcy or consumer proposal. They each give their opinion about who can qualify for a mortgage and what options are available to individuals with poor credit. The biggest take-away from our conversation is that when considering buying a house, saving up the biggest down payment possible will not only reduce your monthly payments, but it could also mean that CMHC insurnace fees will not be included in those monthly payments.

Today’s guest is Ian Martin. Ian is both a licensed Bankruptcy Trustee and Chartered Professional Account, and he also has seven years of experience working at Canada Revenue Agency. As someone who understands both tax law and insolvency law, Ian brings a wealth of knowledge to the conversation and provides in-depth answers to many common tax debt questions. On today’s show we answer many frequently asked questions about tax debt, including whether or not tax debt can be included in a bankruptcy, and whether or not it’s possible to make a deal with Revenue Canada.