My Blog
Debt Settlement Companies to be Regulated!
Written by Margaret Johnson | Friday, 03 February 2012
Regulations Protect Against Unfair Debt Settlement Fees: Rondeau
Debt-settlement Agencies Must Now Be Licensed
Amendments to the Consumer Protection Act regulation have been made to protect Manitoba consumers by banning upfront charges, setting maximum fees and requiring debt-settlement agencies to become licensed, Healthy Living, Seniors and Consumer Affairs Minister Jim Rondeau announced today.
“We want to be sure that people already struggling with debt don’t find themselves paying large fees upfront with no guarantee the service will actually reduce their debt,” said Rondeau. “Some consumers have found themselves worse off than before signing up for debt settlement.”
Under the debt-settlement model, consumers may be told to stop paying their creditors and put money aside in a separate account. When the account accumulates a large enough balance, the agency will then attempt to persuade the creditors to accept a smaller payment than what is owed. Debt-settlement agencies have claimed to reduce debt by a significant amount but there is no guarantee the creditor will take anything less than full payment, said Rondeau.
Are You Having a Black White or Red Christmas?
Written by Margaret Johnson | Monday, 05 December 2011
I noticed the Christmas music hit the air waves in November. It seemed a bit early this year. Usually December gives us a full month of Christmas carols to enjoy. Of course Black Friday, the day following the US thanksgiving celebrations, is now considered the beginning of the Christmas shopping season. And, what a day that was.
According to a report from CBC news on November 28th, a record 226 million shoppers spent $11.4 Billion on Black Friday, November 24th 2011. On-line sales were up from $648 Million to $816 Million, and, for the month of November, online sales totaled $12.74 Billion.
Inflation Up Bank Account Down, Debt Up
Written by Margaret Johnson | Tuesday, 29 November 2011
You wouldn’t believe how sick of chicken I am. I’ve been craving spaghetti and meat balls for several months now, but each time I reach for a package of hamburger, ouch! It’s $10 for two little hockey-puck sized pieces. I’ve tried to pick the package up and put it into my basket but frugality wins every time. I just can’t spend so much on so little.
I experience this price revulsion everywhere I go in the grocery store or when I fill up the gas tank. Bread. Coffee. Transportation. It seems to me that the inflation rate, announced this week at 2.3%, is so small compared to the prices stamped in dollars and cents on the stuff we really need on the store shelf or at the gas bar.
Statistics Canada’s November report confirms this feeling of being knocked out by the grocer and gas station attendant as food and energy prices were actually up 18.2% and food up 4.3% from October 2010. Wages certainly haven’t matched these increases as Statistics Canada reported in August 2011 that average no-farm payroll employees increased a meagre 1.9% over the year, the lowest growth rate since November 2009.
Canadians at Risk – What You Don’t Know Will Cost You!
Written by Margaret Johnson | Friday, 08 April 2011
Many Canadians are trapped in the never ending cycle of paying off, and then racking up, mountains of debt. Credit card interest rates, often looming around 28% or higher, do not help or motivate consumers who are trapped in the debt cycle. It should come as no surprise then that Canadians in debt are easy targets for the newest "debt reduction" scheme.
An Unwanted Import
As you have probably seen on TV, many American "debt relief" companies are advertising that for a low fee they can settle your consumer or tax debts on your behalf. Recently, you may have seen these advertisements aiming towards a Canadian audience - wonder why? Well, debt settlement agencies in the USA have been banned (by the US Government) from charging any fees until they successfully negotiate a settlement on behalf of their client.
Unfortunately, we don’t have this protection in Canada!
Many of these companies will ask for money up front to settle your debts. While the company 'negotiates' over a long period of time, waiting for your creditors to become "desperate" for cash for your accounts, your credit rating could be damaged. If the company is unable to settle your debts, you could be out the up-front cash given to the company, as well as charged back interest by your creditors. Eventually, you could be forced into bankruptcy if you are unable to afford to repay the principle, plus the back interest charged by your creditors. Sadly, many Canadians have already been taken advantage of by these type of companies. So what is Canada doing to prevent this situation? The short answer is nothing - but stay tuned for further developments. For years, we at Credit Solutions have voiced our concern about large America entities (some that have been investigated by the US authorities) moving to Canada and "setting up shop". Below are some ways that you can protect yourself and your family from being the next victim.
Ways to Protect Yourself
If you are looking for a credit or debt help agency we recommend the following:
- Check their license with the Provincial authorities, or simply ask for a copy of it.
- Check their website. How long has it been a website? Look up who "owns" the site with Webnames - it will tell you how long the site has been registered and who the owners of the site are.
- Ask how long have they been in the Credit counselling business - not just how long have they been in business. They could have just changed their name from "Joes Plumbing" or been a "shelf" company.
- Who is the President? Check out their background and verify their credentials.
- Verify the qualifications of the staff. Do they have proper accreditations and licensing? Are they bonded?
- Is their staff licensed? In British Columbia, to check this, go to Debt Rights BC and review the license.
- Do they operate a trust account? If you have to keep money in your own account until they are ready for it, why do you need them to help you?
Canadians can protect themselves through education. Remember, at Credit Solutions we believe in turning debt fear into credit knowledge. If you fear that you have been a victim of a settlement scheme, contact your local credit professional!
TD Economics Released Report on Household Debt Vulnerability
Written by Margaret Johnson | Thursday, 10 February 2011
TD Economics released their report on household debt vulnerability by region yesterday.
"The focus nationally on household debt has raised questions about which regions face the most significant challenge," according to Craig Alexander, TD's Chief Economist and co-author of the report. "This new index does not predict events, but it does shed light on those provinces that are most susceptible to downside risks."
Households in British Columbia, Alberta, Ontario and Saskatchewan were found to be at greater risk with Atlantic Canada and Quebec in the middle. However, it is good news for Manitoban's who are the least vulnerable.
To view the detailed assessment by region, click to read the report from TD Economics - Assessing the Financial Vulnerability of Households.
Warning Signs of Financial Trouble
Written by Margaret Johnson | Thursday, 10 June 2010
Debt Limit Calculations
The monthly disposable income guideline says that spending more than 20% of disposable (net) monthly income on consumer debt repayment is a sign of financial difficulty. If the family is larger than average, or the income is smaller than average, or the family wants are quite high, the 20% guideline is a sign of grave financial difficulty.
Recognizing the Danger Signals
You may have a debt problem if:
1. your wages have been garnisheed or you are using a payroll loan or cash advance company to borrow money.
Debt Management Programs
Written by Margaret Johnson | Wednesday, 26 May 2010
Relieve your Financial Burden with a Debt Management Program (DMP)
A great way to assure yourself of debt relief is to have a Debt Management Program (DMP).
What the hey is a Debt Management Program?!
Basically, it’s a consolidation of payments. It is not a loan and it is only for special people and not for everyone. It’s a voluntary repayment program designed to work with unsecured debt. It is a safe and viable alternative to bankruptcy.
We are happy to work with you and help you to develop a DMP that satisfies your creditors, preserves your relationships and safeguards your assets based on your financial terms. No credit checks are required and your interest payments, late fees and over limit fees will be reduced or even eliminated.
Here's How It Works:
The Debtor’s Assistance Society
Written by Melissa | Saturday, 01 May 2010
The Debtor’s Assistance Society is a non-profit resource for those people who find themselves in need of financial advice and education. The objects of the society are as follows: To provide credit education and debt counselling for individuals and families in need, including but not limited to instruction in financial literacy, debt management, debtors rights and information on the wise use of credit and money.
The Family Home and Credit
Written by Douglas P. Welbanks – Guest Blogger | Friday, 30 April 2010
There needs to be more creativity and flexibility with interest rate reductions for honest individuals and families caught in the recessionary malaise; moratoriums on monthly payments and interest for both mortgages and consumer loans, where appropriate; and the overall willingness to help their customers, co-operate with proposals and be reminded that bankruptcy is a tragedy, the final step in the debt collection process.
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