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Why You Should Consider Debt Counselling

Posted by in Debt
May 2021

If you’ve ever felt exhausted by your increasing debt and are stressing out about how to repay it, you’re not alone. Over 13,000 Canadians filed for bankruptcies and proposals last October, indicating that an increasing number are struggling with personal insolvencies.

Why You Should Consider Debt Counselling

However, it’s not all bad news. With debt comes debt alleviation, which the government has taken steps to reduce. Since so many people are struggling with the same problem, there are multiple ways to get help for your outstanding obligations. Debt counselling is one of these solutions.

Financial counselling assistance from licensed professionals is extremely beneficial for those who are unsure how to deal with their debt or don’t know which debt-alleviation program is right for them. Read on to learn about debt counselling, and why it may be invaluable for you in your journey to financial independence.

What is credit counselling?

When your debts surpass the limit you can personally manage, talking to a financial professional will help you get back on track. Debt-counselling services will help you improve your financial situation and record by getting personalized expertise on your debt problems. Not only will this help you get out of any present debt you may have, but debt counselling will also help you navigate future finances more easily through financial education.

At debt counselling you can be given information about differing financial subjects, such as budgeting, strategies for getting out of debt, and even a debt management plan.

What is a debt management plan?

A formal Debt management plan is essentially a consumer proposal. It allows you to make an offer to your unsecured creditors to pay back what you owe by making one consolidated monthly payment through a Licensed Insolvency Trustee. You want a formal plan registered through the government as informal plans are often unenforceable and creditors may choose not to participate.

To solidify your debt management plan, you begin with sharing all your outstanding debt information with your debt counsellor and figure out the terms of your office based on your abilities. In a consumer proposal there is no interest charged. The amount you offer, if accepted, is the amount you will pay. It is important to refer to a debt counselling service that can help you navigate this process and alleviate your debt.

If your unsecured creditors agree to the offer, it will be easier to make the monthly payment, as it is lower and consolidated. After making the payments on time, your debt counselling agency will use the money to pay back your creditors as specified in the repayment negotiation.

Is debt counselling right for me?

Every individual’s financial situation is unique, which is why we recommend getting evaluated to ensure that credit counselling is suited to you. However, a general rule of thumb is that credit counselling may come in handy for people who have simple unsecured debt such as small unpaid credit card balances, personal loans, and other outstanding bills. It is important to note that tax debt, certain student debt, and car loans and mortgages (where you plan to continue) cannot be settled through a proposal.

How much does debt counselling cost?

Our initial appointments are free because we know people are having a hard enough time when they come to see us. Fees for debt counselling vary according to the agency you refer to.

Typically, if you then move forward with a consumer proposal, and once approved by the creditors, you make an agreed upon payment every month to manage your debt based on your debt management plan.

For some situations, a consumer proposal may be a more manageable alternative to other types of consolidation, so be sure to discuss that with your personal counsellor.

Does debt counselling affect my credit score?

A common misconception is that working with a debt counsellor may impact your credit score. In reality, a simple consultation will never bring your rating down. However, entering into a debt management program such as a consumer proposal may lower your credit score, but only for the short term. Your credit report will indicate that for the duration of your repayment plan, you will be making payments to your credit counsellor. Your credit report will mention it for 3 years after you completed the terms. After this, however, your credit score will not reflect any changes and you should be good to go in the long term.

What are some alternatives to credit counselling or a consumer proposal?

Always make decisions about your financial burdens after consulting with a professional. Here is an overview of some alternative options for debt alleviation:

  1. Debt consolidation: Combining all your debt through a financial institution, so you can get a lower rate of interest and a single monthly payment.

  2. Home equity line of credit (HELOC): A secured line of credit against your home at a lower interest than your other debts.

  3. Credit card balance transfer: A no-interest offer on all outstanding balance for a period of 6 to 12 months.

  4. Bankruptcy: An agreement to pay off your debt by giving up many of your assets.

If you’re looking to manage your debt with more ease, you can rest assured that there are many programs, plans, and counsellors available to help you. Deciding on which debt alleviation program to undertake can be difficult, but that’s where debt counselling comes in. Receiving personalized advice and concrete negotiations on your behalf can help you get out of debt quickly and efficiently.

To learn more about debt counselling services, call Kevin Thatcher & Associates at 1-888-702-9801 or contact us here.

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Is Bankruptcy the Answer to Student Loan Debt?

Posted by in Bankruptcy
May 2021

With tuition fees dramatically increasing over the past couple of years, student debt has become a pressing issue for many Canadians. Students are having to take out large loans for their education, and it can take years or even decades to pay off such a huge sum: about 67% of Canadians graduated with an average debt of over $22,000. Considering that students are only just entering the workforce and getting their lives started, such an amount can be extremely burdensome to deal with.

Is Bankruptcy the Answer to Student Loan Debt?

Polls show that most students land entry-level jobs upon graduating, which do not pay much. The time it takes to gain experience and reach a higher paying level results in skyrocketing interest and delayed payment fees. Many Canadians are able to pay off their student loans down the line, after many years and with a lot of effort. The Ontario Student Assistance Program (OSAP) is able to help many students in Ontario with their post-secondary schooling costs.

However, there are some Canadians who still struggle to make strides in their bills. In such scenarios, debt alleviation through different resolutions might be required. Some former students have started exploring bankruptcy as a possible solution to their increasing debt.

Is bankruptcy the answer to student debt? Here’s more on the subject.

Student Loan Provision

The Bankruptcy Insolvency Act (BIA) was created keeping in mind the surmounting debt that Canadians are under. The Act is typically used to alleviate all manner of debt such as personal loans, credit, and credit card debt.

In previous years, student loans were categorized as an average unsecured debt. However, a more recent provision in the Act allows for student loans to get special treatment. An important clause under this provision is that the person in debt must be out of school for a minimum of 7 years to be able to discharge student debt in their bankruptcy filing.

The 7-Year Waiting Period

As mentioned above, there is a waiting period for student debt to be counted towards an insolvency claim. This is termed the “7-year rule” and refers to the minimum 7 years that must have passed since a student officially ended their studies or were officially registered as a student.

How to Manage Debt Before the 7 years Are Up

If you’ve been out of school for over 7 years, then your student loan debts can be discharged under the Act if you file for bankruptcy. However, what happens in the case that you need to urgently resolve your debt and the 7 years aren’t over yet?

Well, you have the following options:

  1. File a consumer proposal: This involves making an offer of repayment to your creditors, which they can vote to accept or reject. This requires a partnership with a trustee to advise you on the chances of your proposal getting accepted or not. You will need to discuss with the trustee how Student Loan debt will work in this process.

  2. Get in touch with your school: The student loans office at your school can help you in your loan repayment scheme. They can negotiate a different payment plan or offer repayment assistance to help you navigate your debt with more ease. Most offices will have a Repayment Assistance Plan, with which you can request a temporary reduction in payments or even more time to pay off your student loans.

  3. Hardship reduction: If you are eligible, you may be able to apply for a reduction wherein the government will lower your rate of interest for a few years. Proving that you are unable to make payments in full towards your student debt is considered as one of the eligibility criteria. Following this, the principal owed is also lowered after the low-interest period.

  4. File for bankruptcy: Although the debt may not be dischargeable you can still file for bankruptcy with Student Loan debt. The bankruptcy will give you relief from collections for the period of the bankruptcy and then once it is over they will be able to resume collections. However, there are situations that allow a person to go to court after this and ask to have it included in the bankruptcy as they are still unable to pay the balance.

It is important to note that while these options can help you better manage your student debt, they do not always decrease the total amount owed so be aware. Your interest and amount will keep building up and only keep you in debt longer. Therefore, filing for bankruptcy for your student loans is the best option to truly reduce your student debt once and for all.

Dealing With Many Financial Burdens

Dealing with debt in general can be a frustrating and exhausting process. It is not an uncommon occurrence for student loans to pile onto existing ones, or new debts adding to your student loans. Dealing with so many debts at once can seem overwhelming, especially if they come from different sources. In addition to student debt, for example, there can be credit card debt, loan debt, etc.

Consulting an insolvency expert at this time may be beneficial, as your debt situation may be complicated and overloaded. Bankruptcy trustees can help you resolve your student loans as well as any other loans you may have by suggesting a personalized debt-alleviation solution that works for you. If your 7-year waiting period is still underway and you are not yet able to file for bankruptcy for your student loans, then consulting with a licensed professional will help you arrive at a more feasible re-payment method.

To conclude, filing for bankruptcy for any outstanding student loans is a viable solution for many Canadians, especially if you’ve graduated 7 or more years ago. If you’re a more recent graduate with a lot of debt, then there are other debt-alleviation solutions available that can be tailored to fit your lifestyle and existing financial burdens.

To learn more about student loan debt and bankruptcy services, call Kevin Thatcher & Associates at 1-888-702-9801 or contact us here.

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Who Can File a Consumer Proposal in Ontario?

Posted by in Consumer Proposal
Apr 2021

If you’re exploring various debt relief options for your business, chances are that you have considered filing a consumer proposal. This proposal is a formal agreement filed between you and your creditors by a licensed insolvency trustee. It is a great debt relief option, as it can, in certain cases, result in 60% of debt savings, while simultaneously retaining your personal assets, such as cars and homes. Consumer proposals allow you to get out of debt quickly and easily, as they include an offer to your creditors to settle for an amount smaller than what you owe them.

Who can file a consumer proposal in ontario?

However, not everyone can file a consumer proposal in Canada. It is a legal process that must be filed with an accredited licensed insolvency trustee. In Ontario, the trustee’s role is to help determine if a consumer proposal is right for your needs, and then begin the process of meeting the technical requirements and provincial guidelines.

Eligibility Criteria

The Bankruptcy and Insolvency Act outlines the legal requirements to file a consumer proposal in Canada, and includes the following:

  • You must be an individual who resides in, owns property, or business in Canada.
  • You must be insolvent; that is, you are unable to pay your debts, and your assets are worth less than the debt you owe.
  • You must meet the debt limit to be eligible to file a consumer proposal. In Ontario (and most of Canada), you must owe more than $1000 and less than $250,000 (with certain stipulations) to be eligible for filing a consumer proposal. However, there are other proposal options if your debt is above this amount.

Types of Debts

While consumer proposals allow you to settle your debts and consolidate your assets, the Canadian Government mandates the debt eligible for consumer proposals. Credit card debts, unsecured loans or lines of credit, payday loans, accounts in collection, bill payments, and amounts owed to the CRA are all eligible to be cleared for discharge through a consumer proposal.

On the other hand, secured credit (such as a car loan or mortgage) is not eligible for consumer proposals. Any debt from secured creditors in general are usually not eligible, although if the underlying asset is returned, then the debt may be settled. Handing back the asset itself (such as a car or house) removed the security from the equation and any remaining unsecured balanced owed can be dealt with in a consumer proposal.

The Best Time to File

The good news is that there is no “right” time to file a consumer proposal! Every debt relief situation varies greatly, depending on your province, assets, burdens, etc. However, our team of trustees has found that if the credit card interests are racking up and you’re using one card to pay off the other, then it’s probably time to consider getting the help you need. We understand that it is difficult and stressful to speak about your financial troubles, but our team is here to help.

Just remember that there are numerous debt relief options to choose from, giving you the freedom to pick one that works best for you. Trustees can outline your options and, in the case of a consumer proposal, they are there to negotiate with creditors and complete any needed administration. They will help you determine the best time to file a consumer proposal according to your financial situation.

Making an Official Claim

Consumer proposals in Canada can be submitted to creditors by a licensed insolvency trustee only. A debt consolidation firm credit counselling agency cannot file a consumer proposal for you, and neither can you file it yourself. Trustees are licensed with the federal government and have knowledge in both provincial and federal laws.

Trustees will go through your assets, make technical assessments, and create a debt settlement strategy that is personalised for you. Income and expense reports aid in a thorough understanding of financial abilities, which then allows for the consumer proposal to be created and filed. Once accepted by your creditors, the consumer proposal is legally binding for all parties involved.

Accepting/Rejecting a Consumer Proposal

After your trustee performs a financial evaluation of your assets and situation, the consumer proposal is registered with the official receiver (government). The consumer proposal can then be sent out to all your creditors, after which they have 45 days to decide whether to accept or reject the proposal. Most consumer proposals are accepted as is, although a few cases may require negotiations with your creditors in stipulations or a slightly larger amount of compensation. A general rule when it comes to the amount the consumer proposal offers is that it must be larger than what a creditor would receive if you filed for bankruptcy instead.

Once the majority of unsecured creditors accept the consumer proposal, then the document becomes legally binding for all parties involved, that is, the creditors and the debtor. In Ontario, most reasonable consumer proposals are accepted simply because the creditors know the amount they receive will still be higher than they will receive if you file for bankruptcy. This amount will in most cases be less than what is owed and it will stop the high interest charges.

What happens next?

When you file your consumer proposal, you and your creditors enter a legally binding process. The terms of the proposal stipulate the payment you’ll need to make to various parties. Once you have made all your payments and fulfilled all your associated duties, you will receive a Certificate of Full Performance by your trustee.

In Ontario, a copy of this certificate is forwarded to TransUnion and EquiFax (two major credit bureaus) by the government. Three years after you complete your consumer proposal, the information will drop off your credit report, thus leaving no trace of debt consolidation in the first place.

There you have it: some important facts to keep in mind while filing for a consumer proposal in Ontario. While consumer proposals will be the right step for certain individuals, understanding the process of filing can help determine if it is the right solution for relieving your debts.

To learn more about filing for consumer proposals, call Kevin Thatcher & Associates at 1-888-702-9801 or contact us here.

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Debunking 8 Common Bankruptcy Myths

Posted by in Bankruptcy
Apr 2021

The process of bankruptcy is a troubling time for any business or person. There’s so much information to understand and legal ramifications that come along with every step. This leads to a lot of misinformation being perpetuated, with different ideas and stigmas being associated with filing for bankruptcy.

Debunking 8 common bankruptcy myths

It is important to understand what you’re getting into before you decide to file for bankruptcy. While there are many resources available on the topic, make sure you’re getting your information from the right source and remember to double check it. At Kevin Thatcher & Associates, our team is composed of licensed insolvency professionals who know the right information from the myths. We’ve put together a short guide to help guide you on your insolvency journey and debunk 8 common bankruptcy myths you might have heard in the past.

1. Everyone Will Know You Filed for Bankruptcy

No, they won’t. Bankruptcy is more common than you think; so many businesses and individuals have been hit with the financial crisis, and many do end up filing for insolvency. The most common question we get when filing for bankruptcy is if others will know. The simple answer is that it is up to you if you wish to share that information.

While bankruptcy records are public, it costs money to search government records. Newspaper notices report only the large cases of bankruptcy, which is a category that most everyday cases do not come under. As such, it is likely no one will stumble across or make the effort to find your record, keeping the matter up to your discretion to keep private or public.

2. Only Poor People Go Bankrupt

This is simply not true. Bankruptcy is more common than you think, as financial problems can hit just about anyone. People with high incomes, modest incomes, and anywhere in between file for bankruptcy. Bankruptcy itself is simply a process outlined by a set of federal rules that allows anyone who is unable to meet their financial obligations to get relief.

3. You Can Pick Any Bankruptcy Trustee to Help You

This statement is not incorrect. If you’re planning to file for bankruptcy in Canada, the law mandates that you need to file with an insolvency trustee. Trustees are licensed professionals who act as an intermediary between you and the creditors, and are licenced to help you navigate the insolvency process.

All trustee’s follow the same set of rules but you want to pick a company and Trustee you feel comfortable with as they will be with you for the entire process.

4. Declaring Bankruptcy Is a Lengthy Process

A common myth is that declaring bankruptcy takes over 7 years—this is untrue. In many cases of bankruptcy last only 9 months but the average is between 9 and 36 months. Although the number of months can differ on a case by case basis, if your case is fairly straightforward (as over 80% of the cases are), then you will not have to suffer a lengthy insolvency period.

5. You Will Lose All Your Assets

No, you will not lose all your assets and be rendered homeless. This common myth stems from the media portraying it as a process where you lose everything, but that is not true. If you file for bankruptcy, you may need to deal with the value of select assets to make the process fair for your creditors. Many assets are exempt in a bankruptcy filing. The kind and number of assets varies by jurisdiction, so be sure to check out the laws in your area. Generally, certain assets can be retained, from cars and homes to pets, as well as RRSPs, RRIFs, or locked-in pensions.

6. Your Credit Report Will Be Ruined

Filing for bankruptcy definitely affects your credit and will appear on your credit report. However, this record does not last indefinitely. For a first time bankrupt six to seven years after filing for insolvency, the charge drops off your credit report, and no one will be able to see that you filed in the first place. This will allow you to begin rebuilding your credit by taking out a secured credit card and applying for loans. Generally the accumulated debt that a bankruptcy gets rid of will affect your credit more in the long run as you continue to be unable to pay it.

7. All Your Debts Will Go Away

Another common misconception is that filing for bankruptcy makes all your debts magically disappear. While it is true that the process provides you with relief and forgiveness from the majority of your debt. You are still responsible for debts such as alimony payments, and child support. There are also debts such as student loans where the rules stipulate that you can only be completely released from the debt if you file more than seven years from when you completed your schooling.

Filing for insolvency does not generally cover secured debts such as mortgages or car loans unless you want to return them to the lender. If you want to keep these items and must maintain the payments. Another point to keep in mind is that when you declare bankruptcy on joint debts your bankruptcy only protects you from the debt and not the joint owner of the account..

8. Bankruptcy Is the Only Option to Relieve Your Debt

There are alternatives to filing for bankruptcy that any company or individual may explore. Debt management programs, orderly payment of debt, consumer proposal, refinancing your home, and debt consolidation are all viable options. When it comes to choosing the solution for your specific situation, speak with a licensed and accredited insolvency counsellor before deciding. They will help you navigate your various options and help you find the best solution for overcoming your financial difficulty.

As you can see, debt relief is a tricky process, with many common misconceptions and theories about how to go about filing for bankruptcy. The time and energy needed to understand the right solution for you can be made easier with the right team to back you up, leaving you to lead your debt-free life.

To learn more about debt relief and bankruptcy services, call Kevin Thatcher & Associates at 1-888-702-9801 or contact us here.

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5 Things You Didn’t Know About Debt Counselling

Posted by in Debt
Mar 2021

If you have reached a point where you feel that filing for bankruptcy is your only option, then don’t despair. Household debt in Canada is an increasingly common situation; in fact, Canadian citizens owe over $2.15 trillion in debt alone! Bankruptcy proposals have skyrocketed, so you’re not alone.

5 things you didn’t know about debt counselling

If you’re weighed down by legal threats, collection calls, and wage garnishments, you’re probably looking for a way to consolidate your problems and find a way out. What we find is that most people aren’t aware of the options available to them in terms of debt relief, and almost always just end up filing for bankruptcy. However, bankruptcy takes fees, and leaves a permanent, public record. Educate yourself on the other options available to you, as they might make more sense to your personal situation.

That’s where credit counsellors come in. Debt counselling is an easy solution to explore the debt relief options available. Counsellors will not only guide you through various programs and resources, but they will also provide customized support such as budgets and financial assessments, which will help you alleviate your situation. The program gives you the tools you need to pay off your outstanding debt and help for long-term plans for financial success.

1.   Debt counsellors are highly trained professionals

Registered Credit Counsellors are trained professionals who are registered with the Office of the Superintendents of Bankruptcy (OSB). They are required to complete training as well as minimum hours, and are certified to provide you with financial solutions. Credit counselling professionals offer their expertise to improve financial situations and help people get out of debt. They do this through money management ideas and strategies for financial wealth.

2.    Debt counselling offers professional budgeting help

Credit Counsellors are with you every step of the way. They go through your financial records, assets, spending habits, and debt, and come up with a financial assessment. This assessment is the blueprint to help you out of your insolvency problems. A critical step here is to create a personal budget, which helps you resolve all your obligations. Counsellors can help you create a custom, tailored budget that is unique to you and your financial situation. This is a realistic budget that will help you manage your current expenses, and better deal with upcoming expenses in a responsible manner. This is extremely helpful for financial success, and your counsellor provide a non-judgemental assessment of your situation.

3. Debt counselling provides debt management options

Accredited Credit Counselors are there to help you deal with your finances. After a thorough financial assessment, they will provide a proper plan that will allow you to deal with debts easily. Accredited professionals are trained in the various debt allegiance programs and will suggest a structured debt management program. After years of experience, we have found that when customers are given careful advice on their options, their debt relief is successful and long lasting. Not only will they provide alternatives to filing for bankruptcy, credit counsellors may also be able to refer you to other businesses in your area if you require additional services they are unable to provide.

4. Debt counselling goes into the specifics

If you enter into financial assessment, the options will be laid out for an in-depth understanding of the process. Credit counsellors can also discuss proposals where they negotiate with your creditors to make a manageable repayment plan. They will help you arrive at a repayment plan, and structure it so that it is disbursed to your creditors on a monthly basis. Debt counselling helps break down the steps to your financial solvency and really goes into the specifics of how to help you achieve independence. It is this specific information that sets apart an expert debt counsellor from a mediocre one.

5. Debt counselling disadvantages

Remember that credit counselling itself does not reduce the total amount of the debt principal you owe. Counselling simply provides alternatives and possible solutions, where in reality bankruptcy is your quickest solution to debt settlement. However finding the right option for you can in itself can be a key step to financial success.

There you have it: 5 things you didn’t know about credit counselling. This is a very helpful resource if you’re trying to resolve debt while avoiding bankruptcy, or even if you just don’t know all the options available to you! Every situation is unique, and doing the due diligence in researching the different options will help you in the future. Debt counselling also helps with money management for long-term success, which is key in financial solvency and independence.

Reach out to our team of professionals for any of your money doubts or queries. To book an appointment, call Kevin Thatcher & Associates today at 1-866-719-8547 or contact us here.

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Bankruptcy Counselling vs. Credit Counselling: What Is the Right Option for Me?

Posted by in Bankruptcy
Mar 2021

Bankruptcy is a difficult time for you or your business and can greatly affect your financial goals. Expenses and debt add up and, before you know it, you’re ready to file for bankruptcy. What most people are not aware of is that every situation is unique, and filing for insolvency immediately may not be the best solution.

Bankruptcy counselling vs. Credit counselling: What is the right option for me?

The Government of Canada introduced new laws that mandate bankruptcy counselling sessions with every case of insolvency. The 1R4 directive has been implemented by the Office of the Superintendent of Bankruptcy (OSB), and calls for two mandatory credit counselling sessions for every consumer proposal of bankruptcy. This is required to complete the insolvency process—without this, the debtor will not receive bankruptcy discharge or a consumer proposal certificate of compliance.

So, what does this mean for your business? There are fees associated with filing for bankruptcy, while in comparison, an initial credit counselling appointment is free, and allows you to explore your debt counselling options before filing for a consumer proposal or a bankruptcy.

Both ways are viable, so let’s explore which one is the right option for you.

What’s the difference?

Credit counselling is more the assessment that helps a person understand their options. It involves discussing your situation and uncovering the various options available to you in clearing your debts. A trustee’s office will do this as a free consultation. It is important to note that this method means figuring out mechanisms to pay back your debts. Most people think their only option is to file for bankruptcy, but credit counselling helps you understand and assess all of your options before making the best decision.

However, in some cases, bankruptcy is the only option. If managing your debts and paying employees gets hard, and threats of getting taken to court increase, then you may want to consider filing for bankruptcy. It helps clear debts faster, and the difficult process is completed efficiently for your business. Filing will stop collection activities, and all your creditors will be notified. In addition, wage garnishments and lawsuits will be halted. Remember, though, that there are fees associated with bankruptcy, and that the insolvency process leaves a permanent and public record.

Filing for Bankruptcy

If you decide to file for bankruptcy, remember that there are certain fees associated with it. In addition, you must meet the bankruptcy requirements. Two of these requirements are:

1. You must live in Canada or do business/own property in Canada.

2. The minimum amount in unsecured debt is $1000, and you must have no way to sell it off and have very few assets to your name.

Once you file for insolvency, you will obtain a bankruptcy discharge certificate. This will effectively clear your debts, but will leave you with a searchable permanent record on the OSB website. Another important point is that going bankrupt can create issues with loans, credit, financing, and housing. It creates hassles later in life, so remember to treat it as an absolute last resort.

Credit Counselling

We suggest that before filing for insolvency, consider going to a credit counselling consultation for help. Not only are there no restrictions to speak with qualified agents, but most companies will also do a free, no obligation consultation. At Kevin Thatcher & Associates, all our consultations are free, and non-judgemental. Our team has years of experience in insolvency and will help you with your debt problems efficiently, and without having to declare bankruptcy.

What credit counsellors help with is reviewing your income, expenses, spending habits, and assets. Reviewing these factors is important, as it helps counsellors determine which approach will best tackle your unique needs. This financial assessment is valuable financial education as well. Your counsellor will also answer any questions you may have related to debt. Whether you’re unsure about the best debt relief plans, or about debt settlement, they will provide options to you on what is financially viable for your situation.

Debt Relief Options

Most people are aware of bankruptcy as a viable debt relief solution. However, there are other options that need to be explored. Some common debt relief choices are:

  • Debt consolidation
  • Credit counselling
  • Consumer proposal
  • Handle debts on your own
  • Bankruptcy

The financial assessment they provide should be a good jumping off point to start handling your finances on your own.

About Bankruptcy Counselling

A qualified counsellor is a person who has been granted a counselling certificate by the OSB and has had a minimum of 100 hours of counselling. Sixty days after the filing of bankruptcy (the same applies to a consumer proposal), the first stage of counselling must be initiated. The objective of this stage is familiarizing the debtor on issues such as money management, spending habits, warning signs of financial difficulties, and how to obtain and use credit.

The second stage begins within 210 days of filing the consumer proposal. It requires the counsellor to arrive at an understanding with the debtor on the cause of insolvency or refer the debtor to appropriate agencies. This stage educates the debtor further on the resources and options available to them.

Remember that mandatory bankruptcy / consumer proposal counselling is different from credit counselling! These two options vary, but both offer you relief when it comes to your finances. It is up to you to decide which option suits your situation. However, go with a credit counsellor when you’re deciding because then you’re able to see all your options laid out clearly.

Our team is here to help you always, and without judgement. To book an appointment, call Kevin Thatcher & Associates today at 1-866-719-8547 or contact us here.

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A Comprehensive Guide to Resolving Tax Debt

Posted by in Tax
Feb 2021

Tax season will be approaching come April, and that can mean large tax bills. Tax debt is a common problem, and it is easy to get into if you’re not careful. Maybe you owe back taxes and can’t afford to pay them back as yet? Perhaps you just forgot to file your taxes in time one year?

 A comprehensive guide to resolving tax debt

Tax bills can add up if you haven’t been paying bills on time, have missed or were late filing some years, or have been disorganized with managing your finances. Keeping track of your taxes and when they are due is essential, as it can be a great preventative measure saving you a lot of stress later.

If you do end up owing tax, the Canada Revenue Agency (CRA) is compelled to collect on any outstanding debts you may have. The CRA will usually communicate with you on upcoming payments and when they are due, and missing payments will lead to interest and penalty fees adding up. Therefore it is essential to manage your debt or outstanding tax right at the beginning because the longer you delay it, the more difficult it will be to resolve. It will become more expensive, too, as interests and penalty charges add up to extreme amounts over several months.

The CRA may utilize its strong collection powers to collect, and depending on your situation, could even press charges liable in court. Other possible outcomes could be that the CRA seize your assets, freeze your bank accounts or garnish your wages directly from your employer or pension without prior notice.

However, some solutions can address your situation and help you manage your tax debts. If you’re unable to pay them off at the onset, assessing your charges and figuring out how to handle them is better than avoiding the topic altogether.

Tax debt relief is possible with an experienced team that is knowledgeable on the strategies for resolution. Here are some comprehensive ideas on how to resolve your tax debts.

Negotiating Payment Terms

If your case isn’t very contentious, it may be possible to resolve your tax obligations through a series of payment arrangements. The CRA may allow for terms where you pay a fixed portion of your debt back for several months until the debt is resolved.

To do this, you will be required to present documents and information. You will explain your circumstances and the need for an extension and file all outstanding tax returns. After reviewing your income and expenses, the CRA may or may not accept your offer. Contact your nearest Revenue Canada office for more information.

Taxpayer Relief Programs

There are certain programs the CRA will offer to individuals with extraordinary circumstances. If you have been unable to resolve your tax debt due to financial hardship, in some cases, the CRA may forgive outstanding penalties and interest. Individuals who were unable to pay due to personal illness, mental stress, or emotional instability become eligible for these taxpayers relief programs. There is a limitation of 10 years to apply for such programs.

Using Available Finances

RRSPs or RESPs may be cashed in to pay tax debts in some cases. That may not be the best course of action for all individuals but is an option when in duress or no other choice. However, this may not be necessary, as consumer proposals can protect your RRSP and buy you time to work out another arrangement with the CRA. Also remember that cashing certain investments comes with its own tax requirements and you don’t want to pay one tax debt to end up in a new one the very next year. Talk to your investment company before you cash anything to make sure they can hold the proper amounts back.

Debt Forgiveness and Settlement

Generally, the CRA does not accept anything less than the full outstanding amount owed to them. It is understood that all individuals must pay back their debts in full. However, portions of income tax and other unsecured tax debts may be discharged in specific cases. You can file a bankruptcy or a consumer proposal with a Licensed Insolvency Trustee. This is especially helpful if you have found yourself with tax debt that you just can’t seem to get ahead of.

If you file a consumer proposal with a trustee, you could potentially settle your debt for less than the full assessment amount, principal and interest. The CRA is at liberty to decide how far that reduction will go, based on individual circumstances and assets.

Working With a Tax Specialist and Keep the New Filings Under Control

How do you determine if you should cash in those RRSPs or apply for a consumer proposal instead? There are many possible solutions to your financial problems, and it may be overwhelming trying to figure out the options on your own.

Work with a Licensed Insolvency Professional before taking action. Not only are debt relief professionals knowledgeable in their field, but they will also assist and advise you on the best course of action for you specifically. Always be careful to get credentials of the person you are working with as there are many companies who will advertise services that they can’t provide.

Lawyers and accountants may also be able to help you make sure you keep your future filing up to date, with fiscal and legal matters, maybe even with interest and penalties, but the debt issue can only be resolved through tax specialists. Tackle your tax debt problems head-on, in a responsible and organized manner through a free consult today. Part of the process of getting out of tax debt is making sure you create new habits so that you can’t fall into the same patterns.


The most easily implementable solution for small tax debts is to finance your debts. One option is to repay the CRA monthly. If this is not possible, another option is to pay the terms of a low line of credit, loan or mortgage. Always consult with financial professionals before deciding on financing. Our licensed professionals can help review your outstanding debt and help you figure out the course of action suited to you.

There you have it- a comprehensive guide on strategies to resolve tax debt. Financial difficulties are hard to deal with, and our debt specialists are here for you. We have years of experience providing dedicated service to clients and can advise you on all the different ways to deal with your situation.

To learn more about resolving your tax debt, call Kevin Thatcher & Associates at 1-866-702-9801 or contact us here.

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4 Reasons You Need a Licensed Insolvency Trustee if You Are in Debt

Posted by in Bankruptcy
Feb 2021

Bankruptcy is trading your non-exempt assets or ‘what you own’ in return for your debts being forgiven. It is a common financial trouble that many find themselves in and can be challenging to go through.

4 reasons you need a licensed insolvency trustee if you are in debt

If loans or debts weigh you down, it can be confusing to figure out how to handle your situation in the most straightforward and responsible manner. The smartest solution for insolvency problems is to refer to a Licensed Insolvency Trustee.

A Licensed Insolvency trustee is an individual who is licensed to administer proposals and bankruptcies in Canada. Following the Bankruptcy and Insolvency Act, licenses are distributed via the Office of the Superintendent of Bankruptcy.

The majority of Canadian insolvency laws have been written in a way that allows for individuals to file for personal bankruptcy, rather than following elaborate legal procedure and Court mandates, as in other countries.

This is where a trustee comes in. Licensed Insolvency Trustees in Toronto help file any bankruptcy claims (without involving the court in most cases) and are experienced and educated in the field. Not only are trustees there for consultations, but they are also trusted professionals who will explain all manner of debt-relief options, in addition to bankruptcy.

Trustees aid you in the process from start to finish- from deciding to file and collecting the documentation to communicating with your creditors. This is helpful, as every case is different and should be tailored to individual needs.

Below are the four reasons you need to consult with a bankruptcy trustee for your financial burdens:

1. A bankruptcy trustee is there to assist you in working with your creditors.

Licensed Insolvency Trustees are parties that work on behalf of the creditors, and are licensed by the federal government to administrate a bankruptcy or proposal. They offer simple guidance and administrate the insolvency process efficiently and correctly. They must ensure that all parties comply with their duties and responsibilities and that legal procedures are followed.

In Canada, insolvency issues are met in court only if the case is contentious, if duties are not completed, or if the discharge is opposed. An Insolvency Trustee can execute the process without you having to attend court if everything goes smoothly.

2. A bankruptcy trustee is a licensed specialist

Trustees have undergone extensive training and are bankruptcy and insolvency specialists. Not only do they have the required knowledge to advise you on a range of solutions, but they are also the only ones with the license to execute these solutions.

Do not confuse a Licensed Insolvency Trustee with a ‘debt consultant,’ who advises you on dealing with debts and then refers you to a licensed professional. Most trustees help you sort out your financial problems in addition to executing the insolvency process. There is no need to pay a referral fee to see a trustee in Canada and they are required to post on their listings or ads that they are Licensed Insolvency Trustees so that they are easily identifiable.

3. A bankruptcy trustee completes the process from start to finish

Trustees are there to help you understand your options, review and advise you, as well as prepare the paperwork. First a first time bankrupt the process is usually 9 or 21 months if everything goes smoothly, but bankruptcy trustees aid you in the process from start to finish.

Here are some of the responsibilities of a trustee:


Trustees will assess your debt and advise you on all the alternatives available to you in your situation. Once you decide to go ahead with a particular course of action, trustees will begin work on getting the process started.

Compiling Documentation and Paperwork

A Trustee’s office will always be available to answer any questions you may have. After reviewing the information in great detail, the bankruptcy documents are signed. Trustees then coordinate with the Office of the Superintendent of Bankruptcy, which indicates the bankruptcy process. Bankruptcy forms are electronically filed at the Office, and you will be officially registered.

Settlement and Administration

In this stage of the process, trustees will notify your creditors that you have entered into a Bankruptcy or a Proposal along with the particulars of the situation. They will mail over any documentation. This will drastically reduce any calls from creditors demanding payment as once notified they are required to deal with your trustee.


Trustees also review all your assets. It is a common misconception that you have to give up everything you own when filing for bankruptcy. Trustees will assess your assets and decide which ones to turn over. Simple clothing, furniture and vehicles are some of the many items that are considered exempt. For non-exempt assets Trustees work to obtain a fair value for your assets and divide any money amongst your creditors.


When filing for bankruptcy, it is mandated that you must perform specific duties. That includes items such as; giving the trustee your credit cards, attending meetings if the creditors want one, and answering questions that the government may ask (although this happens rarely). Insolvency trustees will outline all these duties so you can complete them, as well as the 2 required credit counselling sessions. These sessions will help you review the causes of your bankruptcy, your budgeting goal for the future, and budgeting for a better future. They are meant to set you on a good path for when you are finished the bankruptcy process.

4. A bankruptcy trustee can offer free consultations

The sole objective of trustees is to help you deal with your debts and financial difficulties. Consultations are offered free, with no obligations. Setting up a quick consult will help you figure out the courses of action available to you without having to make a decision. All our trustees are experienced and knowledgeable and can provide specific options to fit your needs.

Those are the four reasons you need a Licensed Insolvency Trustee. We understand the stress financial burdens lead to and are here to help. Our office is dedicated to helping individuals, and our years of experience in the field make us authority figures on all matters related to insolvency.

To learn more about hiring a Licensed Insolvency Trustee to deal with your bankruptcy or proposal, call Kevin Thatcher & Associates at 1-866-702-9801 or contact us here.

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5 Tips to Creating a Debt Repayment Plan

Posted by in Debt
Jan 2021

Whether you are over your head in credit card debt or several months behind in paying your bills, it can be overwhelming. Keeping track of multiple creditors and making many monthly payments is difficult, especially if you don’t feel like you are getting anywhere. You may not be able to see a way out. However, it doesn’t have to be like that. There are several options open to Canadians to find debt relief, including creating a debt repayment or management plan with the help of a financial professional.

5 Tips to Creating a Debt Repayment Plan

What Is a Debt Repayment Plan?

Financial professionals often help clients create a realistic debt repayment plan that involves accumulating all the debt into one lump sum. This can help borrowers reduce the amount they spend on interest, and can also bring down your monthly payments. It is important to know that this is not a plan that reduces what you owe to creditors, but rather a strategy to help you pay back every cent you owe. Thus, you submit your payment to your financial professional who, in turn, distributes it to your creditors on your behalf. A debt repayment plan usually lasts for 5 years, after which you should have paid off everything you owe.

Benefits of a Debt Repayment Plan

There are many good reasons that lead Canadians to create a debt repayment plan, such as:

  • One payment. A repayment plan lumps all your debt into one single monthly payment. This can relieve a lot of stress because you won’t have to keep track of multiple creditors each month.
  • Lower interest rates. Financial professionals, such as a Licensed Insolvency Trustee, can often get you lower interest rates or have them frozen. So, you are spending less on your debt overall. A consumer proposal stops the interest and gives you a set amount to work towards.
  • Freedom from debt. Having a structured plan to pay off your debt can help you get there faster. It will also give you a timeline for being debt free.
  • Support. A financial professional can offer you support and advice that can help you break bad spending and borrowing habits. So, once you become debt free, you can stay that way.

How to Create a Debt Repayment Plan

Creating a debt repayment plan can be done in a few easy steps, including:

  1. Contact a financial professional. Set up an appointment for your first meeting. Ensure that the profession is qualified. Licensed Insolvency Trustees are licensed by the Federal Government but there are lots of companies who are not and they could end up taking your money and not paying down creditors, so choose carefully.
  2. Assessment. The financial professional will discuss your options with you and help you make the best decision for your situation.
  3. Create a plan. You and your financial professional, a Licensed Insolvency Trustee, will need to discuss what you can afford to pay each month towards your debt. You’ll also need to consider if your creditors will agree with a debt repayment plan.
  4. Approach creditors. Once your financial professional has a plan in place. Depending on the path you choose (such as a consumer proposal) a trustee will notify your creditors on your behalf. They will help you work out a settlement that the creditor can agree to.
  5. Start paying off your debt. After your creditors have agreed to a consolidation, such as a consumer proposal, you can start making your monthly payments to your trustee. They will ensure that the money is disbursed according to the plan.

Tips for Creating a Debt Repayment Plan

To get out of debt you’ll need a plan. It is important to be realistic and create a timeline that you can stick to. You may also want to talk to a professional about your debt relief options, including consolidating your debt. Here are some tips for creating a debt repayment plan that is right for you:

  1. Talk to an Insolvency professional. Talk to a trustee about all your options including filing a consumer proposal or a bankruptcy. They will have some great information and be able to explain all your options while answering a multitude of questions.
  2. Use the avalanche method. In this approach, you pay as much money as possible on the debt with the highest interest rates, while still paying the minimum on your other debts. Once the debt with the highest interest rates has been paid off, you roll that payment into one on the debt with the second highest interest rates. Once that one has been paid off, you put the payment towards the debt with the next highest interest rates and so on, until you have paid everything off.
  3. Alternatively, try the snowball method of debt repayment. With this approach, you pay as much as you can afford to on the loan with the lowest amount owing. Again, you continue to pay the minimum on your other debts. Once you have paid off the debt with the least amount owing, you roll the payment into the debt with the next smallest balance owing and so on.
  4. Take out a debt consolidation loan. Banks and financial institutions offer debt consolidation loans that enable you to borrow enough to pay off your debt. Then, you only have to focus on paying down the consolidation loan.
  5. Create a budget. It may sound boring, but a budget can help you keep your spending under control. It is essential to gain a full understanding of your financial situation. However, when you do make a budget, it is just as important to stick to it. So, don’t forget to add a little extra wiggle room for emergencies and unusual expenses.
  6. Take a class. While you are paying off your debt, it is also a good idea to develop new money habits. There are many workshops that you can find that will help you learn to budget, control your spending, save money, make wise investments, and even find cost-saving ideas.

No matter how much money you owe or who you owe it to, tackling debt can be a challenge. It is easy to become discouraged when your monthly payments don’t seem to make a dent in your debt. Moreover, the time and energy you invest to keep track of multiple payments can leave you exhausted at the end of the month. If you find yourself in an overwhelming debt situation, understand that you have options that can help you get out of debt and start living a debt-free life.

If you are interested in learning more about debt repayment plans, call Kevin Thatcher & Associates at 1-888-702-9801 or contact us here.

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What to Do if Your Business Needs Debt Consolidation

Posted by in Debt Consolidation
Jan 2021

Canadian debt levels are on the rise again according to Statistics Canada. Recent numbers show that the average Canadian owes $1.71 for every dollar they spend. Things don’t look much better for Canadian businesses. About 44 percent of businesses say they have reached their borrowing limit. The average business borrowed $110,000 just to survive the pandemic.

What to Do if Your Business Needs Debt Consolidation

In this climate, it is easy to see how businesses are looking for some debt relief. One of the best ways to get that relief is by consolidating debt into a lump sum. This allows companies to reduce the interest they pay, simplify the paying process, and pull themselves out of debt without hurting their credit rating or reputation. It can also lower the monthly sum that they pay each month.

What Is a Business Debt Consolidation Loan?

In a business debt consolidation scenario, you take out a loan from a bank or financial institution that will enable you to pay off all your other debt. It can cover other loans, credit card debt, and overdue bills. Essentially, you are borrowing a large sum of money to pay off all the small debts you owe and place them under one, single loan. Then, you’ll make monthly payments to your consolidation loan until it has been paid in full. It is one of the best options for people and businesses looking to get out of a risky financial situation.

Benefits of a Business Consolidation Loan

For companies that are in serious debt, a consolidation loan has several benefits, including:

  • A single monthly payment rather than several different ones.
  • Consolidation loans often come with a lower interest rate, which can save money over time.
  • You’ll have a set amount of time to pay off your debt. So, you can count on being debt-free in two to five years.
  • The fees that most lenders charge for a consolidation loan are reasonable.
  • You’ll stop accruing more debt while trying to get out of it.

Drawbacks of a Business Debt Consolidation Loan

While there are several advantages to use a debt consolidation loan for relief, there are some drawbacks, including:

  • You may be required to put down some collateral or security for the loan.
  • If your business doesn’t have a good credit score, it may be difficult to find a lender willing to work with you.
  • Interest rates can still be higher than other loan options.
  • If you don’t have collateral, these unsecured loans can have considerably high interest rates. While most lenders don’t approve these types of loans often, if your business has a high net worth and a strong credit score, then you might be eligible.
  • Unless you are willing to change your spending and budget habits, a consolidation loan won’t solve the problem for the long term.

Finding the Right Consolidation Loan

When it comes to finding the right business consolidation loan that is right for you, there are several things to consider, including:

  • Loan amount. You’ll need to find a lender who offers you enough money to cover all your debts.
  • Fees. Be aware of what fees you’ll be expected to pay for the duration of the loan.
  • APR. This is the annual percentage rate. It will dictate how much interest you pay each year.

Remember that even if you find a loan with a low interest rate, if you are paying a lot of fees, it still won’t be the best business decision.

Other things that you should think about before you apply for a business consolidation loan include how much you owe. Many businesses use credit cards and loans to cover costs like equipment and supplies. However, if you’ve hit a slump in your sales and are unable to build enough revenue to keep up with your debt payments, it can start to hurt your business in different ways. You may find the interest rates rising, your businesses’ credit rating dropping, and you’ll also run the risk of bankruptcy. Before making any decisions that will impact your business long term you may want to discuss your options with a Licensed Insolvency Trustee.

It is also important to consider the type of debt consolidation that is right for your business. Along with an unsecured loan, you could consider a credit card balance transfer, a home equity loan, or seek the help of a debt management program.

Applying for a Business Debt Consolidation Loan

If you are considering applying for a business debt consolidation loan, it is a good idea to talk to a professional first. The reality is that although they can sound like a good option, debt consolidation will not be the best option for all businesses. The amount of money you owe, the type of debt you owe, and the reason for taking out the loan are key in knowing whether a debt consolidation loan is right for your business.

There are a few steps involved in the application process. They are:

  1. Research loans and lenders to find the one with the right terms for your business. Find out what the fees are, how strict their policies are, and compare interest rates.
  2. Once you decide on the loan and lender that is right for you, fill in all the application forms and submit them.
  3. Wait for approval from the bank or financial institution.
  4. Once approved, get access to your money and pay off all your creditors.
  5. Set up a monthly payment schedule for your loan and stick to it.
  6. Pay off the loan and become debt-free.

It is important to have a plan and talk to a professional about your options and whether or not a business consolidation loan is right for you. If you are interested in learning more about consolidating your business debt, call Kevin Thatcher & Associates at 1-888-702-9801 or contact us here.

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