Debt Free in 30

Today’s guest is Daniel Veinot, a lawyer and partner at Duncan Linton in Waterloo, and we discuss student loan debts and how they are handled by bankruptcy law. Daniel discusses whether student loans are automatically discharged in a bankruptcy or consumer proposal, when it's possible to go to court and how many years an individual needs to be out of school before they can discharge any outstanding student loan debts.

Student loan debt is on the increase. In May, 2015 we released our biennial Joe Debtor study assessing debt levels based on over 6000 client files from 2013-2014 and revealed that student loan debt is a growing problem in Canada. From that study we found that 13.4% of people who filed bankruptcy or a consumer proposal with us had student loan debt (up from 12.7 two years earlier). What's more, average student loan debt increased 4.3% over the past two years to just under $14,000.

On today’s show we discuss the law, and your options for dealing with student loan debt.

Right now, interest rates are at record lows, benefiting those who have good credit. But what if you don't have good credit or can't get credit at all?

Today’s guest is Jim Dunbar, the Managing Partner and Chief Commercial Officer for Affirm Financial Services, a company that provides consumer loans, term loans and unsecured credit cards to individuals who have been turned down by the banks. Jim explains the type of credit card that they offer, who the card is intended for and how it could help to rebuild credit.

Disclaimer: The guests that on this show offer a different perspective and many times a different one than my ours. We have people on this show not as a commercial for their product, but rather, to provide information and multiple points of view for my listeners. The guests on this show are not paying to be here and alternatively, they are not being paid to talk to us. Nor are we endorsing their views or their product. What we are here for is to discuss options. All financial decisions should be researched and assessed as a specific solution to your unique situation.

Richard Dunwoody has 30 years experiences providing consulting services to the financial services industry through AFO Venture Group. On today's show Richard offers his opinion on how credit counselling agencies in Canada operate and what this means to consumers.

At our firm we work a lot with local, not-for-profit credit counselling agencies that meet face-to-face with clients using a "whole person" approach. I am a supporter of these kinds of organizations because they meet with people face-to-face, help people deal with the underlying causes of their financial difficulties and teach useful money management skills like creating a budget and finding ways to save money. In fact, I've had two local credit counsellors on this show: Heather Cudmore from Carizon in Kitchener and Sue Davey from Brant Family Counselling.

Richard's disapproval does not lie with these local not-for-profit agencies, but rather, the systems in place in Canada for credit counsellors regarding aspects like qualification and accreditation. He also expresses concerns that consumers are not asking the right questions when it comes to entering into a program like a debt management plan to deal with their debts.

Before now, there really were no rules governing debt settlement companies in Ontario, which meant that they could charge large up-front fees, only to refer the client to a bankruptcy trustee once legal action was taken by a creditor. The process has already started and on January 1st, 2015 the Collection Agency Act was renamed the Collection and Debt Settlement Services Act.

On today’s show Ted Michalos talks about the new legislation and what it means for consumers.

We often hear that clients are afraid to seek help from a trustee in bankruptcy because of the stereotypes and misconceptions about the process. Debt settlement companies feed off this fear by placing ads claiming to be able to settle their debts for pennies on the dollar, while avoiding bankruptcy. Unfortunately, more often than not, these informal debt settlement companies fail, hurting the consumer both emotionally and financially. The new debt settlement legislation attempts to protect consumers from these abuses.

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.