Debt Free in 30

After a three year absence (she was a guest on episodes 131 and 133), Victoria Ryce is back on the show, and today we discuss transitions, like having a child, getting married (or separated), and starting or completing a consumer proposal or bankruptcy.

In a crises we tend to freeze up; Victoria has lots of practical advice on how to make a plan to manage transitions, and what to do if you have an unplanned transition.

We recorded this episode just before the COVID-19 lock-down took place, but the lessons and advice that Victoria provides are more relevant now than ever. Tune in.

Related Reads:

How to Master Being Suddenly Single: https://www.hoyes.com/blog/how-to-master-being-suddenly-single/

The Financial Impact of Becoming the CEO of Everything: https://www.hoyes.com/blog/the-financial-impact-of-becoming-the-ceo-of-everything/

This is episode #300, so for something completely different, today we discuss whether or not you can create your own reality.

That would appear to be a silly thought; if I hit my thumb with a hammer, I can't create a reality where my thumb doesn't hurt. I can't just imagine that I'm the King of England. That makes logical sense, but it is also true that how we see the world determines how we respond to it, so in that sense we can create our own reality.

There is of course a lot more to it than that, so on today's show we start with Plato, and discuss the work of Professor Donald Hoffman, and relate it all to the world of debt, and men's beards during the COVID-19 lock down. Enjoy!

With many Canadians facing a cash crunch during the COVID-19 lockdown, a quick-fix solution has been to defer debt payments. Deferring a debt payment can provide you with funds in the short-term to pay for needed expenses. But what you may not realize is that a deferment will raise the carrying cost of your debt overall. On today's podcast, Ted Michalos and Doug Hoyes explain how much more expensive a mortgage, car loan, and credit card can get if you defer payments and offer practical advice to avoid getting overwhelmed by debt. They also remind listeners of the tax implications of the Canada Emergency Response Benefit (CERB). Tune in to this episode, filled with lots of practical tips.

Related Posts:

Voluntary Surrender: Should I Hand My Vehicle Back? https://www.hoyes.com/blog/voluntary-surrender-should-i-hand-my-vehicle-back/

You Can Now File a Consumer Proposal and Bankruptcy Online in Canada: https://www.hoyes.com/blog/you-can-now-file-bankruptcy-online-in-canada/​

We've heard from the economists, statisticians, and politicians but what's really going on with everyday individuals and the state of their finances after several weeks of lock-down? On today's podcast Scott Terrio returns to talk about what he's seeing "on the ground". How are people's stress levels? Are credit limits being reduced as a result of CERB? Who is calling in for debt help? Is there a rise in homeowner bankruptcies? Tune in for a lively discussion, including the answers to our Twitter followers' questions.

Related Links:

Ontario Bankruptcy and Consumer Proposal Statistics: https://www.hoyes.com/press/consumer-insolvency-statistics/

Hoyes Michalos Homeowners Bankruptcy Index: https://www.hoyes.com/press/homeowner-bankruptcy-index/

You Can Now File a Bankruptcy or Consumer Proposal Online in Canada: https://www.hoyes.com/blog/you-can-now-file-bankruptcy-online-in-canada/

Why You Should Bank at More Than One Bank: https://www.hoyes.com/blog/why-you-should-bank-at-more-than-one-bank/

Canadians are carrying a record level of debt, and while we are off work during the pandemic of 2020, many of us will pile on more debt. Small businesses and contractors will take on debt to pay rent while they generate little or no revenue. Consumers will take on additional debt to make their mortgage payment or pay rent, buy groceries, and pay for necessities. Unfortunately, much of this debt will be of the high-interest sub-prime variety. Payment deferrals may help in the short term, but will only add to the debt load post-COVID19. For some, the result will be an insurmountable amount of debt — more than they will ever be able to repay. It's no surprise then that people are calling for a Debt Jubilee. A debt jubilee is exactly what it sounds like: debt gets wiped out. But is this a good idea? How would it affect the economy? Would it be fair? On today's podcast, Doug Hoyes gives us an in-depth analysis of how a debt jubilee would look in 2020 and whether that's the answer to our collective debt problem. Enjoy!

Helpful Reads:

Is A Debt Jubilee the Solution to Our Collective Debt Problem: https://www.hoyes.com/blog/is-a-debt-jubilee-the-solution-to-our-collective-debt-problem/

Insolvency Predictions Post COVID 19: https://www.hoyes.com/blog/insolvency-predictions-post-covid-19/

...and forgive them their debts by Michael Hudson: https://michael-hudson.com/2018/08/and-forgive-them-their-debts/

Can We Avoid Another Financial Crisis by Steve Keen: https://www.dw.com/en/can-we-avoid-another-financial-crisis/a-41111841

10 Key Canadian Debt Statistics That Explain Consumer Insolvency Growth in 2019: https://www.hoyes.com/blog/10-top-debt-statistics/

7-Year Waiting Rule on Student Loans: https://www.hoyes.com/blog/are-your-student-loans-past-the-7-year-rule-a-vaughan-bankruptcy-story/​

​Hoyes Michalos Bankruptcy Study: https://www.hoyes.com/press/joe-debtor/

On episode 295 last week, Ted Michalos and Doug Hoyes said that collection agents are not making as many phone calls as they used to due to COVID-19. While that's true, there are still calls being placed. So what can you do in this crisis if you get a collection call on overdue debt? Are collectors open to a deal in these times? Enter Blair Demarco-Wettlaufer, COO at Kingston Data and Credit. On today's podcast, Blair explains how collection agencies are operating during the lock-down and shares advice for how you can negotiate realistic debt repayment. He also discusses how debt deferrals will potentially impact our credit reports and gives insights on how the collections industry will change going forward. Lots of practical tips & advice in this show so tune in!

Helpful Links:

Stop The Collection Calls: https://www.hoyes.com/blog/stop-the-collection-calls-advice-from-blair-demarco-wettlaufer/

Collection Agents: How Did They Find Me? https://www.hoyes.com/blog/collection-agents-how-did-they-find-me/

How to Negotiate with a Collection Agent, Episode 264: https://youtu.be/ZgNWpKfBUwU

Blair Demarco-Wettlaufer's Blog: https://receivableaccounts.blogspot.com/2020/04/covid-19-what-will-this-do-to-credit.html

How to get your free credit report from Equifax https://www.consumer.equifax.ca/personal/products/credit-report/​

And TransUnion https://secure-ocs.transunion.ca/secureocs/credit-agree.html

COVID-19 is making Canadian's financial situations increasingly precarious, and high interest lenders are seizing this chance to market their services to those in need of fast cash. Not knowing their options, desperate borrowers take the bait and get sucked into a never-ending cycle of debt servitude. On today's podcast, Doug Hoyes and Ted Michalos explain what alternative lenders are doing to present themselves as being helpful to borrowers; and what borrowers can do to make ends meet without resorting to high interest loans. Doug and Ted also talk about what happens to unsecured debt levels and personal insolvency rates in a recession, with lots of charts and data presented throughout the show, so tune in!

Related Links:

Why Bad Credit Financing Loans are Seldom the Answer: https://www.hoyes.com/blog/why-bad-credit-financing-loans-are-seldom-the-answer/

You Can Now File a Bankruptcy or Consumer Proposal Online in Canada: https://www.hoyes.com/blog/you-can-now-file-bankruptcy-online-in-canada/

If you're facing an income shortage, what can you do if you need to defer your rent payment? And what's going to happen to the rental market now that more AirBnB units are being listed as long-term rentals? On today's podcast, our guest is Rachelle Berube, owner of Landlord Rescue, a property management company helping landlords find and manage tenants. Rachelle shares the dos and don'ts of requesting a rent deferral from your landlord. She also talks about how COVID-19 has impacted the rental market, the death of the AirBnB industry, and why landlords will have to set more manageable rent prices going forward. Tune in; you won't want to miss her insights!

Related Links:

Tenant Guide - No Rent! Negotiating https://landlordrescue.ca/tenant-guide-no-rent-negotiating/

Rachelle on Twitter: https://twitter.com/LandlordRescue

Advice for Tenants Renting a Property with Bad Credit: https://www.hoyes.com/blog/advice-for-tenants-renting-a-property/

How has COVID-19, job loss, declining income, and physical distancing impacted the mortgage industry? And how are home values going to be affected by all this? Enter Ron Butler.

Ron is a seasoned mortgage broker and a first-time guest on the Debt Free in 30 podcast. On today's show, we discuss the current real estate market and what will happen when the lockdown is over; why banks are tightening HELOC availability for borrowers; and why now may not be the best time to refinance your mortgage if you are carrying unsecured debt. Ron also provides insight into the 'death' of the private mortgage industry and describes the new world of mortgage lending.

There's lots to learn from this mortgage insider. Enjoy!

Ben Rabidoux was the guest on podcast episode 266 in October 2019 where he correctly predicted lower interest rates, deflation and a weakening economy, and that was even without t foreseeing COVID-19. On today's show he has many new predictions, including: Lenders will, very soon, lower HELOC borrowing availability, and likely convert HELOCs to regular loans requiring payments of interest and principal each month. He also predicts that residential rents will fall by 10%, and perhaps more in many markets. Many investors in second mortgages will be wiped out. Population growth will slow dramatically, and that, combined with a 95% reduction in Airbnb bookings will reduce house prices (but not immediately, because the real estate market is essentially frozen, with less buying and selling).​ It's a jam-packed episode with lots of insight and probably our longest show yet. Enjoy!

Time Stamps (if you want to skip ahead)

4:37 – The numbers are staggering; employment insurance claims could be as much as 20 times normal

5:20 – Q2 GDP could have a minus 20% to 30% annualized GDP growth (it was a third of that in the depths of the 2008-2009 recession)

6:58 – We aren't epidemiologists; we have no clue when this will end; so far, if you believe the numbers, Canada is tracking under the worst countries, but it's still early; hopefully social distancing will flatten the curve; Ben is optimistic and hopes

9:13 – big question is what is the hit to the economy, and how will it change consumer behaviour; the headlines will be scary for months; not likely a V shaped recovery

12:33 – our economy was built on consumer consumption, fueled by debt

14:00 – economic growth in the last five years has been levered around 80% of household consumption and residential investment (building, buying and selling houses). Almost 2% of our economy is real estate transaction costs (realtor fees, legal fees) which is stunning.

17:00 – We are missing that population growth is largely from immigration, and a lot of that is from non-permanent residents

18:42 – 3.6% of the entire Canadian population is the non-permanent resident cohort, which has grown by over 200,000 in the last year, which has accounted for over a third of our total population growth. It will shrink, and no-body is expecting that.

20:45 - Airbnb rentals will be entering the long term rental pool; Airbnb has been decimated; big under-apr… GDP growth per capita was negative before the recession started.

22:35 – Isn't this going to crash the real estate market? The real estate market is frozen. No-one wants to buy or sell.

25:09 – Could rents go down 10%? 20%?

26:58 – will renovictions stop?

29:37 – if you are a renter now, is it likely there will be better deals in the future than there are today?

31:07 – Will we see structural change? Will people get used to working from home, and will that impact the real estate market? Will the suburbs be a big winner?

32:37 – Amazon will come out of this a big winner. Canadian Tire, not so much.

34:55 – Listener questions; Ben's thoughts on secondary mortgage lenders (not the big banks).

36:17 - The average guy who invested in mortgages is at risk of getting wiped out

40:08 – Impact on mortgage insurers (CMHC, Genworth) is huge; in a foreclosure, the second mortgage holder may lose everything

41:45 – HELOCs – how big is our exposure?

44:48 – If the bank wanted to, they can call a HELOC at any time. More likely, they will force amortization, and cancel HELOCs

47:50 – What the banks are going to do: 1. Cut limits on lines of credit; 2. Force amortization to turn lines of credit (both unsecured and HELOCs) into regular loans, with payments of principal and interest

53:40 – some words of encouragement and reasons for optimism