Debt Free in 30

The payday loan industry in Canada loans an estimated $2.5 billion each year to over 2 million borrowers. Like it or not, payday loans often meet the need for urgent cash for individuals who can't, or won't, borrow from more traditional sources. If your hydro is about to be disconnected, the cost of a payday loan may be less than the hydro re-connection fee, so it may be a prudent financial decision in some cases.

As a “one time” source of cash a payday loan may not be an issue. The real problem is payday loans are structured to keep customers dependent on their services. Like opening a box of chocolates, you can’t get just one. Since a payday loan is due in full on payday, unless your situation has improved, you may have no choice but to get another loan from another payday lender to pay off the first loan, and a vicious debt cycle begins.

So what’s the solution? That’s the question I asked my two guests, Brian Dijkema and Rhys McKendry, authors of a new study, Banking on the Margins – Finding Ways to Build an Enabling Small-Dollar Credit Market.

On today's podcast we talk with Ted Michalos about the Office of the Superintendent of Bankruptcy and how they regulate the bankruptcy process, and trustees, in Canada and why they changed the name from bankruptcy trustee to Licensed Insolvency Trustee (LIT).

A conventional mortgage today has a 25 year amortization, because the typical borrower wants, or needs, 25 years to pay off their mortgage. So is it possible to pay off your mortgage faster?

Sean Cooper became a media sensation after paying off his $255,000 mortgage in just three years. We talked with Sean about how he paid off his mortgage so quickly, what sacrifices he made, what he might have done differently in hindsight and what tips he has for anyone wanting to pay down their mortgage sooner.

There are a number of personal finance personalities, especially on American radio and TV, who say that if you have too much debt it’s because you spent too much and you're the cause. After all, if you're actions aren't to blame, then they can't sell you their solutions and books.

But is that opinion valid? Are all of our financial problems entirely our fault, or are there other factors that lead to debt problems? On today's show we talk about how circumstances can overtake anyone.

Kelley Keehn and Robert Brown discuss why sometimes “stuff happens”, and we discuss five reasons why debt problems may not be your fault.

There are many reasons people find themselves in debt. For our guest today, the underlying cause of his financial difficulties was drug addiction. James inspires us with his story - both how he battled his addition and why bankruptcy was a part of his recovery.

James actually contacted us with a moving letter about his recovery which is what inspired us to ask him to be on our podcast. On today’s show James tells the story of how he started using drugs at age 14, and was an addict until age 27. He got into debt, but he turned his life around, as he explains on today’s show.

At the end of 2015, updates and clarifications were made to existing Ontario bankruptcy laws that directly affect indebted consumers. On November 13, 2015 the Supreme Court of Canada put forth a ruling about the 407 ETR (a toll route in the Toronto area) concerning the treatment of 407 debts in a bankruptcy or consumer proposal. Another big change came on December 1, 2015, as the Execution Act in Ontario was updated.

On today’s show Doug Hoyes and Ted Michalos, co-founders of Hoyes, Michalos & Associates, Licensed Insolvency Trustees, discuss how the changes, as well as the Supreme Court's ruling, will affect Ontarians looking to deal with their debts.

Disclaimer: Our discussion about updates to the Execution Act are the interpretation of ourselves and the lawyers we've spoken with about the new rules. This is new legislation that has not yet been tested in court, and as such, a judge could rule differently than we've interpreted the information on today's show.

Is it enough to calculate the amount of debt you have and focus exclusively on making that number smaller? I'm an accountant and a licensed insolvency trustee, so to me, the numbers matters. That being said, getting into debt and struggling to get out of debt again has a lot to do with behaviour and mindset.

My guest today first appeared on episode 14 of Debt Free in 30 to talk about his newly released book, Wealthing Like Rabbits and followed up that interview with one about good debt vs. bad debt. Robert Brown is back to shed some light on the importance of changing our perspective about debt.

Getting sick or injured is common and it can often mean missing work for a few weeks or for a prolonged period of time. To cover any missing income, people tend to turn to credit to survive, leading to more debt than they can handle.

On today’s how our guest is Promod Sharma, an actuary at Taxevity in Etobicoke, Ontario. Promod is here to talk about life and health insurance, why everyone needs to have it and how to decide which coverage is best for you and your family.

Fifty years ago if you wanted to steal money from someone you had to steal cash. Today money is electronic, so if your identity is stolen you can lose a lot of money very quickly, and that can lead to a mountain of debt.

How big a problem is identity theft and fraud? That's the question we asked today's guest, Kelley Keehn, the author of Protecting You and Your Money: A Guide to Identity Theft and Fraud. She told us that:

A third of Canadians have been victims of some type of fraud. What was more curious is that two thirds of Canadians surveyed said that they knew of someone that was a victim of fraud, so even if it hasn't happened to us yet, a lot of us know someone who was a victim of fraud.

Credit card fraud is a problem, but in most cases your credit card issuer will cover you, so if you fill out a form or prove that you didn't authorize the charges the problem can be solved quickly.

Identity theft is another matter altogether, and it can take many weeks and a lot of effort to restore your name.

So what can you do to protect yourself? On today’s show Kelley gives a lot of practical advice on preventing identity theft and fraud.

Do we fully understand the cost of debt? We see the ads for loans where you "only pay $20 on a hundred". $20 sounds like a good deal, but is it?

On today's show, Meg Penstone, the Manager of Financial Health and Literacy for Family Counselling and Support Services in Guelph Wellington, shares some sobering numbers and gives listeners advice for dealing with their debt.