A new study conducted by Hoyes Michalos and Harris/Decima shows that 18% of Canadians polled carry both an outstanding balance on a credit card and a line of credit.  Given the convenience, ease and even rewards associated with credit use it’s no surprise that many of us carry balances month to month.

While it’s one strategy to use a credit card to pay for items right before a payday, thereby reaping the benefit of instant credit without paying interest, roughly half of Canadians said they always or often carry an outstanding balance…good for the bank, not so good for the customer.

Other insights from the study include:

  • Larger households of four of more people are even more likely than those comprised of only two to carry a balances
  • The ever-growing population of Grandpa Debtors (a name given to debtors over the age of 55), are less likely than nearly all other groups to say that they pay more than the minimum required monthly payment on their credit cards.

A previous Hoyes Michalos & Harris/Decima study published in the fall of 2012 showed that the vast majority of Canadians would need to rely on some form of credit (ie debt) to raise $2,000 in the event of an emergency, with about a quarter of respondents feeling that they would not be able to raise that amount at all.  Now combine those figures with other reports about savings being at an all-time low, record-level debt amounts AND that 62% are comfortable with their financial situation…Perhaps not so comfortable anymore?

Some good news is that most of the people with debt from a credit card or line of credit reported having considered cutting down on expenses or increasing their income to eliminate the debt, both of which are a great way to get started.

Unfortunately those may not be available avenues for those already stretched to their financial max, only able to make minimum payments or feeling that they will never be able to pay off the debts.  The survey revealed that while 10% said they had considered talking to a credit counselor only 3% saw a Consumer Proposal as an option, showing the need for better education about regulated debt resolution options.

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To speak with a local, licensed trustee regarding available debt management options please contact us for a free, confidential consultation.

Are creditors harassing you? Are the endless phone calls and collection letters causing you stress? Are you living on your credit cards? Are you unable to maintain your minimum payments? Are you being pursued for government debt? If you answered "yes" to any of these questions, you are not alone. In the twelve-month period ending July 2016, more than 66,000 Canadians were in the same financial position and found relief by seeing a Licensed Insolvency Trustee and filing personal bankruptcy. Another 57,000 Canadians settled their debt management problems by filing a consumer proposal.

If you are not a resident of British Columbia, more information is available about bankruptcy in Canada.

No matter what the cause of your financial difficulties, the Bankruptcy and Insolvency Act does not restrict a person from filing personal bankruptcy or making a consumer proposal. For example, you could be in financial trouble due to the loss of employment, a divorce, a leaky condo, medical problems, gambling, substance abuse, or poor money management. Regardless of the reason, filing personal bankruptcy or making a consumer proposal to your creditors is based upon your unique individual circumstances and is ultimately your personal decision. In BC, both of these remedies can only be filed by utilizing the services of Licensed Insolvency Trustees. At Sands & Associates, our Licensed Insolvency Trustees understand that most people file into bankruptcy or make a consumer proposal to creditors because of unfortunate circumstances, and we will guide you through this difficult time. 

Personal bankruptcy or a consumer proposal to creditors can provide shelter from the financial storm. Each will stop virtually all legal proceedings, garnishees, and phone calls from your creditors. These legal remedies provide a fresh start by pardoning your debts including credit card debts, lines of credit, legal bills, utility bills, medical bills, automobile insurance, judgments, government debts, etc. A Licensed Insolvency Trustee can help you understand the relative merits of each of these debt management options within BC. 

At Sands & Associates, we make filing personal bankruptcy or making a consumer proposal to creditors simple. We will arrange for a free initial consultation with one of our knowledgeable staff to discuss your financial status, and help you to determine whether bankruptcy or a proposal to creditors is the right choice for you.

Should you choose to file personal bankruptcy or make a consumer proposal to your creditors, we will process the necessary paperwork, arrange for possible meetings with creditors, provide two credit counselling sessions at our convenient offices located in Vancouver, Burnaby, New Westminster, Richmond, Surrey, Langley, Coquitlam, Maple Ridge, White Rock, Abbotsford, Chilliwack, Victoria, Nanaimo, Kamloops and Kelowna. 

After you have filed personal bankruptcy or a consumer proposal, you are required to perform your duties as outlined in the Bankruptcy and Insolvency Act. Some of the duties in a personal bankruptcy include keeping the Licensed Insolvency Trustee informed of your current address, declaring your monthly income and expenses for a minimum of nine months, attending two credit counselling sessions, and paying the Licensed Insolvency Trustee an amount that is dependent upon your income and the assets that you own. 

If this is your first personal bankruptcy, the earliest that you will be eligible for your discharge is nine months after your date of filing. A discharge from bankruptcy means that your debts will be eliminated and your creditors can no longer pursue you for the outstanding amount owed. It provides peace of mind and a chance for a fresh financial start. 

If you choose to make a consumer proposal to your creditors and if the creditors and the court accept it, the contract is binding between you and the creditors. A certificate of completion, which discharges your indebtedness, will be given as long as you meet the terms of the contract and remit the appropriate funds or assets to the Licensed Insolvency Trustee.