Financial trouble can be defined as the inability to address your financial obligations with the money you currently make and the assets you have, at present. One of these obligations is the payment of credit card debt. If you fall behind in debt payments to these and other entities you owe, your credit score will begin to drop. If the situation worsens and you fall further behind, your lenders may reduce your credit limits or withhold credit altogether by closing the accounts you have. There are many repercussions associated with delayed debt payments, including higher interest and the inability to take out loans for cars, real estate, or major home appliances. While your debt problem continues unabated, you are likely to lose the ability to borrow. What you should do is this: take steps towards reestablishing credit by finding reliable sources of debt relief in Red Deer. Here are some things you should know about the process:

• You cannot start to fix your credit if you still have current unpaid debts.
• Financially insolvent individuals may be unable to take out debt consolidation loans.
• Completion of a debt settlement plan after you have enrolled is important to rebuilding credit because you cannot obtain credit while you still make payments to said plan.
• Starting over by eliminating debt is quickly accomplished by filing for personal bankruptcy.
• You need enough savings in a bank account and adequate income from a stable job to reestablish your credit and get it back to where it once was, or better.

You can’t fix or obtain credit if you still have pending debts. You cannot raise your score after it has dropped considerably unless you pay these debts or enroll in a plan or program with the end goal of clearing what you owe.

Many Canadians who look to the Internet to find ways to resolve their debts and rebuild credit consider debt consolidation loans, which do not reduce credit scores. This debt relief option does have requirements that can make it difficult for the insolvent to apply; for starters, you need to have a decent score and assets to put up as collateral for securing the loan. If you owe numerous lenders considerably large sums of money, you might not be able to qualify for a debt consolidation loan due to the lack of adequate income for debt payments and assets that can be put up for loan collateral.

Another popular option among those with large debt loads is the debt settlement plan. These plans promise to slash debt in half or more, and claim that these do not affect credit scores as bankruptcy does. While bankruptcy filers receive a rating of R9, which is lower than the R7 rating that a debt settlement plan comes with, they will not have access to credit. However, there are no practical differences because these same creditors will also be unwilling to work with people who have gotten R7 ratings. Until the completion of a debt settlement plan or a discharge from bankruptcy, creditors will not work with you.

Although the hit to the credit rating, asset portfolio, and personal finances can make personal bankruptcy unattractive to many, it does have merits. For one, personal bankruptcy can generate disposable income to use for the payment of debts, which can fast-track debt reduction so you can work to rebuild credit in a shorter time frame. Debt settlement plans, after all, are typically completed in a minimum of five years. To compare, the bankrupt can receive a discharge from bankruptcy in as little as nine months.

There are qualifications that should be met for the debtor to regain the ability to fix credit. Having money in a savings account to channel towards loan collateral and a good idea of using secured credit responsibly are necessary to reestablishing credit – no creditors will lend you money if you do not have a source of income for debt payment.

Student consolidation loans have become somewhat of a necessity in this day and age of tuition fees and other costs that have become increasingly out of reach for many students in Edmonton. Hundreds of student loans are provided to students in Red Deer who need the extra financial aid these loans provide so they can fund their way through university. The problem is many of these students have difficulty repaying these loans after graduation.  It may help to know that if you require multiple loans to cover your costs, a student consolidation loan can reduce your monthly payments and help you better manage your finances post-graduation.  It’s important to research the different sources of funding university costs to ensure that you can manage your expenses in the ‘real world’.

Government Loans

Government-funded loans for students can ease the already-demanding load a student has to cope with during his or her time in university. These loans generally come with lower interest rates and other benefits that may not always be available with private creditors. A single application can give you access to a student loan and a grant at the same time, with handling and disbursement being facilitated by either your local provincial or territorial office or the office for school loans.

Private Loans

Funded with money from private sources, this type of consolidation loan can come in the form of credit lines and/or loans. Obtaining approval for these loans can sometimes be difficult as they use a lot of the same review criteria that you would find when borrowing for a home or vehicle.  Be prepared, in some cases lenders may require a co-signer in order to loan the funds.

Loan Payment

On the plus side, student loan repayment, does not happen while the borrower is still studying. Government-funded student consolidation loans must be paid half a year after the borrower graduates from school. If payments cannot be made due to financial difficulty, the student may be able to renegotiate payment terms and extend the duration of repayment or have payment amounts adjusted.

With private providers, repayment is often required soon after the disbursement of your loan and at the very least, even if payment isn’t required, interest begins accruing. Loans from these entities may be the only source of financial aid for those who have been unable to qualify for government funding. Shop around for creditors and go with those whose loans come with the lowest interest and the highest degree of adjustability for loan payments for more savings.

It’s at this point, payment time, that you may want to research the benefits of a student consolidation loan.   If you have multiple loans, it may be possible to consolidate them into one, often reducing your monthly out-of-pocket expense.

Savings and Additional Resources

If you aren’t one of the lucky ones whose parents have built up a college fund, it’s important to start saving money as soon as you can.  Anything you save is more money you won’t need to borrow and ultimately pay for.

Unfortunately, as expensive as university costs have become, it’s likely you won’t be able to pay your way through college with the savings you have or the money you make with a part-time gig. Loans are increasingly a part of the college student’s life.  It is possible though to make payments less stressful and your finances more manageable by using government loans to pay for your education and student consolidation loans to make repaying those loans a bit easier on your bottom line post-graduation.

People who are faced with the prospect of bankruptcy, for the most part, do not exactly look forward to what it has to offer, but they may be more fearful than necessary because they’re in possession of inaccurate information that can push them into looking elsewhere for debt relief. . Horror stories about bankruptcy abound, and are mostly propagated by people who don’t know better. If you’re thinking about ways to deal with debt you can no longer manage, start by finding answers to bankruptcy questions from qualified sources prior to making your decision to file or opt for other debt resolution methods.

Many who seek alternatives to bankruptcy may have come across and absorbed many potentially damaging misconceptions while researching on the Internet. When they do find reliable information, of which there is plenty, the data is typically general, and does little to help them resolve their own specific financial problems. Because of the complex nature of bankruptcy, Canadian bankruptcy law mandates collaboration with a licensed bankruptcy trustee.  Here are a few things you should know:

Licensed bankruptcy trustees are the only professionals in Canada that can file for bankruptcy on your behalf.

Bankruptcy trustees are not only bankruptcy experts.  They can provide you with a wide range of debt solutions if your financial situation merits it.

Trustees are highly trained to diagnose your financial situation and prescribe what has to be done to fix your debt.

It is near impossible to find what should be done to ease your debt if your circumstances aren’t assessed properly and accurately. Trustees are trained to examine your financial state and determine the best solutions for you and your goals. It won’t be difficult or costly to find and work with a trustee you’re comfortable with, as many of these professionals offer initial meetings at no cost. This makes your search for the best licensed bankruptcy trustee easier and more cost-effective so you can start building your personalized debt relief action plan after getting the answers to bankruptcy questions you may have.

Red Deer debtors have a wide range of choices when it comes to methods that can help them resolve their debt problems. However, it is important to know that only two of these methods provide the debtor with legal protection from wage garnishments, creditor calls and letters, and other forms of collection activity – these are the consumer proposal and personal bankruptcy declaration. These two options can be complicated, and as such, require the facilitation of a licensed bankruptcy trustees.

The statement of financial affairs is a document containing personal and financial information and is a required part of the proposal and bankruptcy process. This document will serve as proof that you are no longer capable of paying your debts and addressing other basic financial obligations with what you have at present, which will then be presented to the courts and/or the creditors involved in your bankruptcy filing or consumer proposal. If you have extra income or savings that can be channeled towards paying off your debts, you are not considered insolvent. You are also not insolvent if you have assets that can be sold off for money to use for debt payments.

The statement of affairs has several sections with different types of information that will inform the courts and your creditors about your financial circumstances.

You need to list all assets in the first section of the document. The asset list should also have descriptions of each, along with a corresponding current market value. Your trustee will note the assets that may be seized for liquidation and the proceeds that can be made when each one is put up for sale. You may find exemption allowances for assets in your area of residence low at the onset, but when you compare these limits to the actual dollar value of your possessions, the allowances can be generous.

All of your liabilities are contained in the second part of the document. Liabilities, or all that you owe your creditors and other similar entities, comprise secured debt (which bankruptcy or consumer proposals do not address) and unsecured debt.

You will have to disclose the name of your current employer, the size of your family, and related personal information in the next section. Keep in mind that your financial circumstances will remain a private matter, and will not be disclosed to your employer or any other individual or group.

Budget information comprises the fourth portion of the document. This data includes all regular and irregular sources of revenue, as well as all expenditures. This section will also ask whether or not you have filed for bankruptcy in the past. You will also have the opportunity to explain why you are currently in debt and require a consumer proposal or bankruptcy filing to clear up your debts.

The last section will require you to answer questions that prevent the shielding or withholding of assets from the trustee for the purpose of debt repayment. Have you sold off properties, given cash gifts, or made above-average sized payments to any creditors? These are a few queries that will be made in the final part of your statement of financial affairs.

Red Deer debtors have a wide range of choices when it comes to methods that can help them resolve their debt problems. However, it is important to know that only two of these methods provide the debtor with legal protection from wage garnishments, creditor calls and letters, and other forms of collection activity – these are the consumer proposal and personal bankruptcy declaration. These two options can be complicated, and as such, require the facilitation of a licensed bankruptcy trustees.

The statement of financial affairs is a document containing personal and financial information and is a required part of the proposal and bankruptcy process. This document will serve as proof that you are no longer capable of paying your debts and addressing other basic financial obligations with what you have at present, which will then be presented to the courts and/or the creditors involved in your bankruptcy filing or consumer proposal. If you have extra income or savings that can be channeled towards paying off your debts, you are not considered insolvent. You are also not insolvent if you have assets that can be sold off for money to use for debt payments.

The statement of affairs has several sections with different types of information that will inform the courts and your creditors about your financial circumstances.

You need to list all assets in the first section of the document. The asset list should also have descriptions of each, along with a corresponding current market value. Your trustee will note the assets that may be seized for liquidation and the proceeds that can be made when each one is put up for sale. You may find exemption allowances for assets in your area of residence low at the onset, but when you compare these limits to the actual dollar value of your possessions, the allowances can be generous.

All of your liabilities are contained in the second part of the document. Liabilities, or all that you owe your creditors and other similar entities, comprise secured debt (which bankruptcy or consumer proposals do not address) and unsecured debt.

You will have to disclose the name of your current employer, the size of your family, and related personal information in the next section. Keep in mind that your financial circumstances will remain a private matter, and will not be disclosed to your employer or any other individual or group.

Budget information comprises the fourth portion of the document. This data includes all regular and irregular sources of revenue, as well as all expenditures. This section will also ask whether or not you have filed for bankruptcy in the past. You will also have the opportunity to explain why you are currently in debt and require a consumer proposal or bankruptcy filing to clear up your debts.

The last section will require you to answer questions that prevent the shielding or withholding of assets from the trustee for the purpose of debt repayment. Have you sold off properties, given cash gifts, or made above-average sized payments to any creditors? These are a few queries that will be made in the final part of your statement of financial affairs.

People faced with debt that they cannot seem to manage can get help through debt consolidation. Credit counseling, however, should be a prerequisite for obtaining this type of debt assistance, especially as an increasing number of people depend on their credit cards for most expenditures and run the risk of accumulating huge debts. In addition, these people who accumulate unmanageable debt need financial education to prevent matters from worsening, although not many of those who would benefit from credit counseling actually get help. Are you seeking financial aid via debt consolidation? Credit counseling is important – here’s why:

Most lenders do not require potential borrowers to curb credit card use or obtain credit counseling prior to providing them with loans for debt consolidation. This is an oversight that can have serious consequences – not only can a borrower go back to the point of having huge debt, but possibly surpass the original debt and aggravate the financial situation even further. Here is one scenario that may be all too familiar to some debtors:

Let us say that you have about $50,000 in overall credit card debt. Let’s also assume you are one of the  few who has built up a good amount of home equity. Because you have this sizeable equity and a decent credit rating, you have no trouble going to a lender for a debt consolidation loan, for which you borrow against the value of your home equity. You then use this money to pay off your credit card debt. What has happened here?

You have simply displaced what you owe, or replaced your credit card debt with another one – the debt consolidation loan. You have not reduced your overall debt at all, although you may have eliminated past credit card debts. Now that you owe nothing to your credit card companies, you are likely to be tempted to overuse your cards again and accumulate the debt you had in the first place or build up even larger debt. In no time, you are back to where you started (or worse), and may no longer have the capacity to take out another debt consolidation loan.

If credit counseling were a prerequisite to obtaining a debt consolidation loan, the chances of these situations happening and recurring would be much smaller. Credit counseling, aside from educating the debtor as to proper credit card use and the avoidance of staggering debt, also teaches the skills and knowledge necessary to making productive financial decisions. Look at some of the legal solutions to debt available in Canada – bankruptcy filings, consumer proposals, the Orderly Payment of Debt program – all of these require the borrower to attend formal credit counseling to lessen the chance of accumulating overwhelming debt after he or she has cleared some or most of it.

It’s not enough to provide a financially troubled person with debt relief through forms of assistance such as debt consolidation. Credit counseling is also important to help ensure that these problems do not recur.

Dwindling funds usually translates to the accumulation of unmanageable debt, as debt payments and various financial obligations can no longer be met. If you are one of these individuals who needs aid towards the resolution of your financial problems or specifically, the reduction of your overall debt, you may wish to consider a consumer proposal in Red Deer. This option, which allows debt settlement by payment of amounts less than what are actually owed, may be just what you need to get your finances back on track. Here is some consumer debt proposal information for Canadians considering this means of debt relief:

Consumer Proposal – a Definition

A consumer proposal is basically an agreement between you and your creditors. With this agreement, you can settle your debts with the creditors involved in the proposal by paying a portion of each debt within a predetermined time frame. This agreement is a legally binding one that requires you work with a licensed bankruptcy trustee. It also needs the approval of a majority of the creditors involved prior to taking effect.

The Benefits of a Consumer Proposal

In addition to the sustainable debt relief it provides, a consumer proposal also has many other advantages. Among them are:

• A halt to phone calls and letters from creditors who demand payment, as well as a stop to impending wage garnishments and other collection activity.
• The retention of your home and other valuable assets that would otherwise be taken by the courts for liquidation and debt payment in bankruptcy.
• A stop to the accumulation of interest and other various peripheral fees on your unpaid debts.

Consumer Proposal Requirements

To obtain approval for your consumer proposal and attain its debt relief benefits, you have to meet the following requirements:

• You should have debt ranging from a minimum of $5,000 to a maximum of $250,000 – home mortgage excluded.
• You must be employed, and earn enough income to make the agreed upon payments every month.

Keep in mind that this legal agreement does not cover debts such as child support, alimony, other court mandated payments or your secured debt such as mortgage and car loan payments.

There are numerous legal options available to the individual who wishes to regain financial stability.  If your money problems can no longer be resolved by means such as reducing your spending and filing for bankruptcy is something you’d like to avoid, you may want to consider a consumer proposal. Prior to making your decision to apply for one, talk to your trustee about consumer debt proposal information for Canadians and see if you qualify.

Bankruptcy paperwork can be daunting to complete, especially for the uninitiated who have had no previous experience filing for bankruptcy in Red Deer. Even those who have filed before may be unable to complete these documents to the satisfaction of the courts and the Office of the Superintendent of Bankruptcy, making the legally mandated services of a licensed bankruptcy trustee invaluable. Your trustee, aside from facilitating bankruptcy proceedings, will also help you in preparing for bankruptcy by completing your bankruptcy paperwork efficiently and accurately.

Bankruptcy Forms

You need to execute four documents that are essential to filing for bankruptcy. These documents are:

• Your Assessment Certificate
• Assignment of General Benefits of Creditors
• Statement of Affairs
• Monthly Statement of Income and Expenses

You will sign these papers after your trustee prepares them, after which they will be sent to the OSB. As these are legal documents, you have to ensure that all the information you disclose is complete and truthful.

Information Gathering

The OSB will process the paperwork you submit and begin bankruptcy proceedings. Your Assessment Certificate and Monthly Statement of Income give your trustee relevant information about your financial circumstances and help determine what payments, if any, you need to make to the bankruptcy estate. You will have to provide the following personal information for the completion of these papers:

• Legal name, place of birth, and date of birth
• Legal address
• The composition of your family, including names and each member’s status
• A comprehensive listing of all debts and other financial obligations
• Your status of employment, at present
• Your overall monthly earnings
• All other sources of revenue
• A list of assets that includes your home

Finishing Your Bankruptcy Paperwork

Using this and other information that your trustee has learned from your face-to-face consultations, the completion of the remaining documents may be accomplished. Your Assignment of General Benefits to Creditors and Statement of Affairs are another set of legal documents the OSB will use to finish your bankruptcy declaration.

Your licensed bankruptcy trustee can help you attain some much-needed debt relief and allow you to meet your financial goals by completing your bankruptcy filing. In the process, he or she will assist you in the accurate completion of bankruptcy paperwork.

Red Deer residents considering bankruptcy to relieve the strain of staggering debt on their finances will be glad to know that unlike their neighbors to the south, an emergency filing will not be necessary.  There are some similarities between the Canadian and American bankruptcy systems, including attendance at two formal counseling sessions, but American debtors stand a greater chance of running into problems as a result of the timing entailed for their first counselling session. This is especially apparent when US residents need to take the route of the emergency filing when there is impending legal action to collect payments for their debts.

American legislation concerning bankruptcy counseling sessions mandates that debtors have to meet with a credit counselor for a formal session at least once before bankruptcy proceedings occur. Some Canadians say that this improves the filer’s chances at restoring financial stability because the prospective filer is given more opportunity to understand bankruptcy and its implications, as well as educating him or her on the various legal alternatives that can ease his or her debt load.  What they may not know is a consultation with a licensed bankruptcy trustee can accomplish the very same thing.

American debtors who have difficulty making ends meet turn towards emergency bankruptcy filings when, late in the game, they receive notices of impending garnishments on their wages or the upcoming seizure of properties they own for debt payment. Upon being informed of garnishments or asset seizure, these residents are forced into applying for emergency bankruptcy despite having inadequate time to prepare. The result is that these filers often fail to complete the necessary requirements, mainly because they have little or no knowledge on the subject of bankruptcy and little time, which then leads to incorrect or incomplete bankruptcy filing petitions. Wage garnishments, in this scenario, are not as serious a matter because stays in proceedings can halt the seizure of properties. The repossession of cars or similar vehicles and the obligatory turnover of non-exempt assets require serious and effective action.

Canadians who are required to work with licensed bankruptcy trustees to file for bankruptcy are sure to obtain the best short-term and long-term debt resolution provided by a bankruptcy filing or other methods of legal debt relief.  Trustees are experts in debt resolution and would be filers will rarely encounter the problem of inadequate bankruptcy preparations that can endanger their prospects at stabilizing their future and their finances. On the other hand, US debtors may be able to file for bankruptcy on their own or enlist the dubious expertise of professionals who have little to no training in bankruptcy cases – this is something for the average Canadian filer to think about when faced with the question of how reliable emergency filing and the entire bankruptcy system is in his or her own country in comparison to that of the United States.

The FAQ bankruptcy filers ask can help them set the groundwork for preparations for bankruptcy proceedings and the effects this legal action can on their lives during and after a bankruptcy filing. Here is an overview of the top FAQ bankruptcy filers discuss with their trustees before deciding on a debt relief action plan for their financial concerns:

Is the loss of my home possible in bankruptcy?

Yes, there are cases where the debtor has to give up his or her home in bankruptcy, although this depends on factors such as the amount of equity accumulated in your property and the equity allowances established in the province or territory where you live. Some provinces do not have equity allowances – Saskatchewan and Ontario are two of these areas. Without these allowances, even homes with little equity may have to be surrendered to the courts for liquidation and debt payment. Many other areas do have equity allowances in place, though. If you own a home with an equity value that is above the limits set in your territory or province, you may still be able to retain your home by paying the difference to the bankruptcy estate.  A licensed bankruptcy trustee in your area is the best source for information about whether or not you will be able to retain your home in bankruptcy.

What else will the courts take in bankruptcy?

This depends on the asset exemptions for bankruptcy filers in your area. Most provinces have exemption allowances in place that allow the filer to retain certain that assets that are considered essential to earning and maintaining a decent standard of living. The documents you prepare for your trustee regarding your finances will help determine which assets you can and cannot keep in bankruptcy.

Why should I work with a licensed trustee in bankruptcy?

The government mandates that debtors work with these certified financial professionals prior to and during bankruptcy. These experts are the only professionals licensed to file for bankruptcy on the debtor’s behalf and prepare for proceedings and its impact on life post-bankruptcy.  What you may not know is trustees can also provide valuable information regarding the various alternatives to bankruptcy that might be available to you. If your trustee appraises your situation and deems that your debt can be resolved by these alternatives, he or she will develop an action plan that will help you resolve your debt with these alternative solutions in place.

Who will know I filed for bankruptcy?

Your creditors are actively informed when you file for bankruptcy. Despite the inclusion of this information in a public database maintained by the Office of the Superintendent of Bankruptcy, friends and family aren’t likely to know about it through an insolvency name search unless you disclose the information outright.

Bankruptcy is one of the most effective means of debt relief in the country, but it is not the best solution for everyone. For more information on FAQ bankruptcy filers often ask, set up an initial consultation and speak with a licensed bankruptcy trustee.

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Some debtors who have exhausted all other means of debt relief may benefit from a bankruptcy filing, but are turned off because they think that they will have trouble opening bank accounts afterwards. Bankruptcy, while being an effective way for many to clear most of their debts, also comes with disadvantages such as diminished assets and a negative credit rating. However, this does not mean that filers should be denied the right to apply for and use basic banking services to help them strengthen their finances and rebuild their funds. Fortunately, filers should not have trouble opening bank accounts and using other basic services offered by banks despite financial difficulties caused by a bankruptcy declaration.

The Access to Basic Banking Services Regulations, which was rolled out in 2003, serves to protect the debtor’s right to bank services no matter what his or her financial status is, as long as the applicant has not committed fraud and crime against banks and banking personnel, or falsified identification. The applicant, however, has to apply for the services in person and not over the phone or the Internet. Upon his or her application, the debtor also has to present some of the following pieces of standard ID: a Canadian birth certificate, naturalization certificate, passport, driver’s license, SIN card, or health card.

You may have filed for bankruptcy in the past, recently declared bankruptcy, or are currently unemployed, all of which can considerably affect the state of your finances, but you should not be denied access to any basic banking services. If you encounter any difficulty applying for a bank account, you may go to the website of the Financial Consumer Agency of Canada for a complaint form and file a complaint with the said agency that enforces these regulations. For the most part, debtors do not have to go as far as to file a complaint because these concerns are usually resolved by the bank.

Bankruptcy may diminish the stability of your finances, but it should not prohibit you from applying for essential banking services. The idea that you will not have access to these services due to recent or current bankruptcy is one falsehood that needs to be corrected by proper bankruptcy knowledge. In cases like these, it is always helpful to go to a reliable source of bankruptcy information such as a bankruptcy trustee licensed to handle cases in your province or territory of residence.

Licensed bankruptcy trustees are not only experts at facilitating bankruptcy proceedings, but are also professional debt relief advisors who can allow you to regain financial stability through various debt management options. In addition, these trustees are also well-versed on other matters surrounding bankruptcy. Their training and certification under the Office of the Superintendent of Bankruptcy can help you get back your financial footing with expertise that provides you with practical and updated information to dispel misconceptions such as bankruptcy resulting in trouble opening bank accounts.

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Furniture exemptions for people in bankruptcy can be good news for potential filers who are worried about the asset loss that may come with a Red Deer bankruptcy declaration. Although no one loses all of the things he or she owns upon declaring bankruptcy, some may still be worried about losing their most valuable assets and possessions. Fortunately, furniture exemption regulations have been passed, serving to preserve the lives and livelihood of those considering a bankruptcy declaration as a means of debt relief. In addition, having a better idea of what items may be retained despite the need for asset liquidation can help people improve their plans for mitigating the effects of such a legal action.

Asset Exemptions in Bankruptcy

Although some of your assets may be turned over to the courts for liquidation in bankruptcy proceedings, some items are exempted by law. As long as these items do not go beyond certain monetary values as stated in local law, the filer may be allowed to retain ownership. A furniture exemption specifically covers the appliances or furnishings a debtor may keep, again, as long as these follow the qualifications set by regulations in your local area. In addition to furniture, exemptions are possible for the following assets:

• The filer’s place of residence
• Food
• Clothing
• Vehicle
• Equipment used in the filer’s occupation

The assets a person will be allowed to keep after a bankruptcy declaration do not include luxury items. A late-model high-end home theater system, for example, may have to be turned over for liquidation and the payment of the filer’s debts.

Furniture Exemption Limits

As with other exemptions, there are limits as to the overall value of the furniture you can keep after declaring bankruptcy. The value, however, may be different from one area to the next – what applies in Alberta, for instance, may not necessarily be the same for other provinces. Your own licensed bankruptcy and local government office are the best resources for specific information on equity value limits.

For general information about furniture exemptions, you may also go to the website of the Office of the Superintendent of Bankruptcy.

Asset Valuation

After finding out what the equity value limits are for furniture exemptions in your area, you should then calculate what your items are actually worth. Make a list containing the names and prices of all the assets you have. Ensure that you base your figures on what the furnishings are currently worth, and not how much these were when you purchased them. Making an accurate presumption on the worth of these assets can help you determine the extent to which you will benefit from furniture exemption in the face of a bankruptcy declaration.  A bankruptcy trustee can help.

Pre-bankruptcy credit counseling services is one topic that you may have encountered in your research on the topic of bankruptcy in Red Deer. Like many topics related to bankruptcy filings, what you have found may have confused rather than helped you.

Many bankruptcy trustees licensed to work in the country have set up websites that inform the reader and potential filer about credit counseling. Specifically, these sites often say that the filer is required to meet with a certified counselor for at least two counseling sessions during the bankruptcy filing. However, there are not that many sites that discuss pre-bankruptcy counseling, or consulting with a credit counselor prior to bankruptcy proceedings. This is why some debtors, many whom may find that they can actually avoid filing for bankruptcy entirely, do not take advantage of these sessions before filing. Here is some valuable information you should know regarding pre-bankruptcy credit counseling services:

• United States filers are required by law to attend credit counseling before they are allowed to file and subsequently declare bankruptcy. This allows the debtor to go through his or her available debt management options. 

• Canada bankruptcy regulations require the filer to successfully complete two counseling sessions while he or she is in bankruptcy proceedings to attain a bankruptcy discharge.

• There are many cases that can benefit from the timely intervention that pre-bankruptcy counseling can bring, some which can avoid filing altogether.

People searching for bankruptcy information on the Internet may have found search engine results less helpful than they expected. This is due to the fact that these results often show bankruptcy information that is relevant to debtors in the United States. While there are some similarities, a prospective filer from Canada should realize that knowing the difference is important.

Generally, credit counseling helps the debtor offering information that can enable productive decisions regarding one’s finances. For example, sessions with a credit counselor may discuss how a future filer can manage the effects of staggering debt by slashing expenditures and using credit cards wisely. Credit counselors also work with the debtor to define the reasons behind the potential filer’s financial problems and pinpoint effective and specific solutions for both the long and short term.

The trouble with many Canadians and Americans alike is that they often let their debts accumulate to the point that it becomes unmanageable without professional assistance. Some debtors have found that after obtaining assistance early on, they were able to resolve their financial concerns with little outside help, managing to avoid bankruptcy.

Some licensed bankruptcy trustees, as well as some non-profit organizations that counsel debtors, will give you an initial consultation at no cost. The counselor usually assesses your situation to pinpoint the best debt relief solutions. Use these free pre-bankruptcy credit counseling services to bolster your chances at financial stability, with or without filing for bankruptcy.

Do Red Deer residents faced with overwhelming debt have to worry about the impact of a bankruptcy name search? Debtors considering filing for bankruptcy to alleviate their debt already have so much to worry about, such as asset loss, a damaged credit rating, and the emotional distress many feel after a declaration of bankruptcy. These aspects of bankruptcy demand enough attention and effort as it is, but the tragic part is that many people are fearful about what could happen to their reputations and lives once a bankruptcy name search yields information that they deem private, which is why many of these potential filers think twice about filing.

What You Should Know About Bankruptcy

Statutes within the Bankruptcy and Insolvency Act state that once a bankruptcy is filed, it becomes a legally binding agreement and part of the public record.  The records are held in a database maintained by the Office of the Superintendent of Bankruptcy.

The Office of the Superintendent of Bankruptcy can provide any person with access to bankruptcy information about a certain party or individual regardless of his or her connection to the. The searcher simply requests an insolvency search by paying a fee of eight dollars to open an account. After this, the individual making the request provides the OSB with the name, address, and age of the person whose bankruptcy information he or she wishes to access. Individuals looking for bankruptcy information on certain people may also gain access to said information by hiring private database searchers. These private searchers, however, usually charge higher fees than the nominal one The Office of the Superintendent requires.  Bear in mind, these searches are conducted with specific information in hand, it is not access to a general bankruptcy database that lists all of the bankrupts in any given city or province.  As such, unless your neighbor has a specific reason to conduct a bankruptcy name search on you, it is unlikely he will.

The fact that specific financial and personal information are part of public records and accessible to anyone has pushed many prospective filers into changing their financial plans and backing away from filing for bankruptcy. The effects that the disclosure of this information may have on their lives may be one reason why these people have reconsidered. If you are considering a bankruptcy filing, think about this: unless your case is high-profile, chances are slim to none that someone would look for your information via a bankruptcy name search, so push through with your plans if you’ve gotten the go-signal from your financial planner or bankruptcy trustee.

More and more college students are seeking bankruptcy help after they graduate because of unmanageable debt and the lack of gainful employment in Red Deer. The debts many graduates have accumulated are primarily made up of student loan and credit card debt; debt they can’t pay because the lucrative jobs they worked for did not materialize. The income they can make is usually no match for the debt they have, causing these unfortunate individuals to look for bankruptcy help.

Financial Literacy versus College Debt

The amount of debt your child may incur in college depends on how he or she manages money. Obviously, kids who have a good grasp of the financial basics usually do better with money matters and have less debt when they finish school. In their hands, credit cards are good tools that help them manage their finances and build their credit scores. The problem is most of today’s students aren’t financially responsible and act in ways that tend to aggravate rather than improve a financial situation that’s beset with credit card bills and student loans.

You can instill financial responsibility in your children in many ways. If they need a sizeable amount of money for a worthwhile purchase, you can give them a loan – just make sure that you’re strict about repayment; otherwise, you won’t make your point. You may also give them a debit card – once the money in the account is used, it’s gone. They should be held responsible for any overdraft fees that are incurred.  If your child absolutely has to have a credit card, sign up for one with a relatively low credit limit so he or she won’t have to contend with a small fortune in debt once the bill comes. These are simple ways you can use to teach your children financial responsibility.

Employment versus College Debt

Student loans typically make up most of a college student’s financial obligations after graduation. These loans are necessary because the student has inadequate resources with which to fund his or her education and secondary education can be expensive. Part-time or full-time work when school is out of session can help with school expenses.  Money earned can be put towards tuition fees, school books, and other materials, while decreasing the amount he or she will need to borrow in the form of student loans. In addition, a part-time or full-time job can also strengthen your child’s financial responsibility.

Being prepared, in terms of both monetary skills and resources, can help your student survive the college years financially unscathed instead of emerging from university looking for Red Deer bankruptcy help after graduation.

You probably know that Canada weathered the Economic Crisis of 2008 far better than the majority of other industrialized nations.  This was small comfort to the people who walked into our offices in the past few years whose financial difficulty in Red Deer reached the point where a declaration of personal bankruptcy was their only option for getting back on their feet.

It is certainly true that things are improving, both here in Red Deer and around the world.  Canadian unemployment has stabilized and shows some signs of improvement.  Personal bankruptcy filings in 2010 dropped 18%.  Household debt, which reached a record 1.48 trillion in late 2010, actually went down to 1.46 trillion in early 2011.

We think the most significant improvement is the decline in household debt.  The recent numbers are only a snapshot in time, but some experts are claiming that Canadians are finally facing up to the fact they owe too much and are taking steps to get their debt under control.

While the majority of the residents of Red Deer who come to us for help are there due to a change in their income picture, the fact is it’s excessive household debt that turns an unexpected decline in income from a setback to a crisis.

Some people think of financial difficulty in Red Deer as restricted to difficulty in meeting current financial obligations.  While that is certainly true, we think even those residents of Red Deer who are still able to manage their current debt may very well be in financial difficulty of which they are unaware.

The issue to confront is not your current ability to manage your debt, but your future ability.  Do you have savings to allow you to withstand a personal economic crisis?  Are you prepared for rising interest rates?

The Economic Crisis of 2008 drove already low interest rates to historic levels.  Low interest rates made it easier for Canadians who might otherwise have fallen into financial difficulty to stay afloat by borrowing more.  There is hardly a financial expert anywhere on the planet who expects interest rates to go down further.

As the economic recovery already in progress heats up, interest rates will rise, and along with them, your monthly debt repayments will go up.  If you have a home mortgage loan in Red Deer, a higher interest rate when you renew is all but guaranteed.

Can you afford an increase in your monthly mortgage payment?  Credit card interest rates may rise as well, leaving you with two options.  Pay the higher monthly payments so you can continue to use your cards, or close the accounts to stay with the lower rate.  Can you afford to live with less available credit?

If your answer to these questions is “no,” you are on the road to financial difficulty in Red Deer.  If your answer is “I don’t know” you should consider getting professional financial help from an accredited credit counselor or licensed bankruptcy trustee in Red Deer.

Looking for Red Deer bankruptcy information from qualified sources should start as soon as you experience financial problems that seem difficult to resolve. Many people are encountering these problems as a result of the struggling global and national economies, and need all the help they can get to control their debt to minimize its effects on their future financial stability. If you’re currently in the midst of a monetary crisis, here’s some bankruptcy information that you need to know:A huge percentage of the population stands a chance to enter bankruptcy. If you’re familiar with some or all of these situations, seeking professional advice on bankruptcy and debt management is recommended:

• Maxed-out credit limits and delinquent credit card accounts due to excessive cash advances for bill payment and the coverage of essential expenses, including gas and groceries
• Delinquent credit card accounts resulting in collection activity from your creditors
• Only making the minimum required payments on some credit cards
• Garnished wages
• Large loan balances
• Inadequate healthcare coverage
• Inadequate emergency funds

You may have a feeling that there isn’t much you can do to fix your financial situation. However, most cases can be resolved or mitigated by a variety of options that could put you on the right path to monetary stability. Your initial step should be a personal audit of your finances, which can give you a better idea of the gravity of your situation. List down these figures:

• The balances of each bank account, including the contents of your savings accounts, checking accounts, and other bank accounts
• Your net monthly income
• Unnecessary expenditures you can do away with, such as costly cable TV and mobile phone subscriptions and various non-essential expenses
• All current debt

After this, you can give your financial plans the necessary overhaul, starting with your budget. By using your ‘Statement of Affairs’, you can usually see the root of your problem. Most people have extremely high debt loads and expenditures larger than what they earn. Fixing your budget after cutting out these items or resolving these spending issues may help you protect yourself from financial emergencies and their effects on your overall funds.

What Options Do You Have?

Once you’ve examined your finances closely and made the necessary adjustments, you can consider the available alternatives to bankruptcy. Trimming your expenditures as much as you can is the first thing you can do for your financial situation and may end up being enough.

More often than not, debtors may need to go beyond correcting their spending habits. Talking to a creditor or banker may be necessary. Your banker can offer a debt consolidation loan so you’ll only have to set aside one monthly payment and incur lower overall interest on your debts, while a creditor can restructure your loan so you’ll make smaller monthly payments.

Tackling your financial problems early on can help you avoid bankruptcy and the repercussions that come with such a move. Talk to a licensed bankruptcy trustee in Red Deer for more bankruptcy information and other things you should know about keeping your finances in check.

How important is it to get accurate Canada bankruptcy information from the right sources? If you’re considering filing for bankruptcy, you shouldn’t let the chips fall where they may and simply hope for the best. Regardless of your past and current financial situation, there’s always a chance to turn things around for a better future and good fiscal health by using solid, relevant, and practical data. The question is, how would you identify what’s useful and what isn’t? That’s where the experts come in. Here’s some Canada bankruptcy information bound to be invaluable to those considering bankruptcy or undergoing bankruptcy in Red Deer.

Bankruptcy Regulations and You

Bankruptcy regulations come from two sources: The BIA (Bankruptcy and Insolvency Act) statutes and provincial legislation. Regulations in your province or territory of residence mostly govern what assets you may retain after declaring yourself bankrupt, while the BIA essentially covers everything else. Bankruptcy regulations and other basic information may be obtained by contacting the Office of the Superintendent of Bankruptcy or the Office of Consumer Affairs. For debt management recommendations and specific bankruptcy information, talk to a certified professional like a licensed bankruptcy trustee.

Your Bankruptcy Trustee

The outcome of your decision to file for bankruptcy rests mainly in the able hands of a certified bankruptcy trustee. A trustee is a professional advisor for bankruptcy affairs and other related financial matters. To ensure that licensed trustees maintain strict ethical standards, the Office of the Superintendent of Bankruptcy oversees their practice, in addition to their training and certification. Of course, proper cooperation from a potential or current filer influences what happens after your initial consultation. Here are just some pieces of information your trustee should know about:

• Your investments
• Your earnings
• Bank account balances (including savings and checking accounts)
• Updated debt balances
• The state of any delinquent debts

Other Options

Are you unable to receive the appropriate support from your trustee? You may be able to turn to the Office of the Superintendent of Bankruptcy’s Bankruptcy Assistance Program for some much-needed aid. Contact them for more information if you:

• Have worked with a minimum of two licensed trustees without success
• Are filing a personal bankruptcy
• Are not or have not been incarcerated

If you haven’t filed for bankruptcy yet, or if you see it as a last resort, consider talking to your bankers and creditors.  A banker may be able to provide you with a debt consolidation loan, while a creditor can restructure your loan terms for easier and/or lower payments.

The global and national economies aren’t improving as quickly as we’d like, impacting the hopes and lives of many Red Deer residents. No matter how much debt trouble you’re in, there’s always the chance of a more stable future if you take a hand in the situation as soon as you can. Take account of what you have, debts and all, and work with the right bankruptcy trustee who knows Canada bankruptcy information inside and out.

Canada survived the recent global financial meltdown better than most western economies. Even in the face of renewed concerns, there is reason to believe as a nation we should be able to survive a potentially new round of economic catastrophes. That is small comfort for the many residents still facing substantial financial difficulty in Red Deer, and indeed, all across Canada.

The fact is Canadian consumers are confronted by the twin problems of too much personal debt and too little personal savings. Despite advice from financial experts to maintain a savings cushion of 6 to 8 months income to weather a downturn in income, not many residents of Red Deer have that much in savings.

Even those residents who do have some savings find their personal debt loads are too high for their savings to make much long-term difference should they suffer from some form of unexpected income interruption.

More and more Canadians are becoming aware of this problem and are taking steps to reduce personal debt and increase personal savings. The process begins with setting a personal budget, eliminating expenses we can live without and reducing other expenses as much as possible.

A strict budget invariably generates some additional disposable income. Then the question becomes how you should make use of it.

Conventional wisdom says to reduce personal debt with higher interest rates first. After all, what is the point of putting money into savings paying rates under 10% while you are paying 14% or more on a credit card account?

Some residents in financial difficulty in Red Deer fail to recognize the difference between cash and credit and rely on the availability of more credit after debt reduction should an emergency arise.

It certainly seems to make sense. Over time, you eliminate a $2,000 balance by concentrating every additional dime you have on reducing that account. If you get in a little more trouble, you simply take out a cash advance against the available credit.

The problem with this strategy is simple. In the face of uncertain economic conditions, more and more lenders are tightening their credit standards. If you have multiple credit card accounts with significant balances, it is not unlikely your credit limit could be reduced on some accounts. Some Red Deer residents find themselves having certain accounts closed entirely.

Depending on your situation, using a portion of your disposable income to go into personal savings might make more sense. Do not be afraid to get some professional financial help reviewing your situation. Licensed bankruptcy trustees like us offer free initial consultations, as do some non-profit credit counselors here in Red Deer.

The very thought of declaring bankruptcy in Red Deer sends residents looking for any alternative they can find.  One of the principal reasons many have such a deep seated fear of bankruptcy is what they believe it will do to their credit report.  However, some alternative solutions to bankruptcy in Red Deer have essentially the same affect on a credit report as bankruptcy.

What’s more, there is something new for people in financial difficulty to worry about.  More and more employers are doing credit checks on applicants, which means a job search can now be affected by your credit report.
First, let’s look at the effect an alternative solution to bankruptcy in Red Deer has on your credit report.  Your credit file will reflect an R7 rating on unsecured revolving accounts, like your credit cards.  The rating assigned when declaring bankruptcy is worse – R9 – but the practical effect is the same.

In both cases, you cannot get new credit until you successfully deal with your old debt through credit counseling or debt settlement solution or a Canada bankruptcy filing.  You should know that first time filers finish bankruptcy much faster than anyone in a credit counseling solution or debt settlement plan, which take from 3 to 5 years.  Bankruptcy for first time filers lasts from 9 to 21 months.

Now let’s talk about job search and credit reports.  First, an employer has to have your permission to conduct a credit check.  If you believe you were rejected because of something in your report, you have the right to demand an explanation of their reasons from the employer.

Why do employers do credit checks and what are they looking for?  In jobs requiring the handling of money, the procedure seems to make some sense.  However, some employers now feel credit history can be an indicator of reliability, good judgment, and stability.  The reasons are irrelevant and you do have options here.

First, deal with your debt in whatever solution works best for you.  You have the right to add letters or explanation to your credit file and you should definitely do this as potential employers can learn what caused your difficulty.

Finally, make sure your credit report is up to date and accurate.  Once you complete your debt solution, the balances due that appear on the report should go to 0, but sometimes this doesn’t happen.  You may also find debts on your report that are not yours and these can be disputed.  Make sure your dispute letter gets added to your file.

Of all the people who come to us in need of financial help in Red Deer, there are none more heart-wrenching than senior couples whose golden years in retirement deteriorated into a tangled web of debt and declining income.

While bankruptcy is a viable solution for them, our seniors grew up in an age where paying your debts was a matter or personal ethics.  Debts that could not be met were a sign of disgrace and shame.  Yet despite the fact that many seniors abhor the thought of bankruptcy, the Office of the Superintendent of Bankruptcy in Canada (OSB) tells us people 55 and over are the fastest growing demographic group declaring bankruptcies in Canada.
The same can be said for senior citizens in our neighbor to the south.  With decades of stagnant income for many average Canadians, saving for retirement has become difficult at best.  Indeed, rather than saving for the future, many of us find ourselves borrowing more and more just to maintain our life styles.

The more debt you carry with you into your retirement years, the more you place yourself at risk.  Many Canadian seniors are getting into financial difficulty because they resort more and more to credit cards to supplement insufficient retirement income.   This is a recipe for disaster.

If you are approaching retirement and you are concerned about the size of your “nest egg”, do not hesitate to seek out financial help in Red Deer right now, while your income may still be large enough to reduce your pre-retirement debt load.

You can meet with an approved credit counselor or a bankruptcy trustee licensed in Red Deer for help in developing a personal budget.  Both offer free initial consultations and despite what their titles imply, bankruptcy trustees can do more for you than manage a personal bankruptcy filing.

Personal budgets allow you to control expenses to be able to reduce present debt to more manageable levels and possibly to increase retirement savings as well.  The process is simple on paper but difficult in practice.  It often involves confronting the painful but necessary realization that to avoid bankruptcy in your retirement years, you may have to modify your life style to learn to live with less.  However, this does not mean you have only a life of deprivation to look forward to.  It may mean opening yourself to the possibility of learning to enjoy life’s simpler, and far less expensive, pleasures.

Paying down Red Deer debt, especially if it’s excessive debt, should be a priority for Canadians. Too much debt can quickly spiral out of control, leading to even bigger financial problems, including poor credit scores, foreclosures and repossessions, and in worst case scenarios, a Canada bankruptcy court.

At the same time, it’s also important to have savings. A savings account with enough to cover several months’ expenses can get you through a job loss, reduction in hours, car repairs, or other problems, relatively unscathed.

When you’re faced with the decision of building up your savings account or paying down your Red Deer debt, you may want to do both at the same time, but it can be hard to decide whether to put the majority of your money towards savings or debt reduction.

Paying Down Red Deer Debt

A few benefits of paying down your Red Deer debt include:

• Overall savings
  

Interest rates on lines of credit can be substantial—sometimes up to 30%. The amount of money you spend on interest over the life of your line of credit, depending on how much money you’ve financed, can reach into the thousands. Paying off your debt can help you stop wasting money on interest.

• Peace of mind
  

If your debt is getting out of control, you may have creditors calling or trouble scraping by just to make minimum payments. Paying your debt down gives you freedom from your creditors.

Saving

Saving money can also be beneficial for a number of reasons, including:

• Money for emergencies

We’ve all faced expenses we weren’t really planning on, whether it’s medication, car repairs, or expensive home repairs. If you have a savings account, you can cover such emergencies and still be able to pay your bills.

• Cushion during unemployment

In the event you lose your job or your hours are reduced, a savings account can help you cover your expenses until you are employed again.

• Less chance of incurring more Red Deer debt

Without a savings account, you may be forced to incur more debt in an emergency, which ends up putting you deeper into debt and making you pay more interest in the long run.

Paying Debt and Saving

Debt reduction and savings both have benefits and drawbacks, so it’s important to carefully weigh the pros and cons of each before you decide on a financial plan.

You can still pay down debt and save a large amount of money by alternating the amount you have budgeted to save towards paying off debt and saving. For example, let’s say you have $500 set aside each month for debt reduction. The first month, pay $500 on top of your minimum amounts for credit. The next month, put $500 in your savings. Keep doing this until your debt is paid off.

There are many different approaches towards paying off debt, saving, or doing both. Both savings and debt reduction are important for financial well-being. With a little creativity, you can find ways to pay off your debt and save some money at the same time.

Canadians have been enjoying Red Deer interest rates at historic lows for quite some time now. These affordable rates have allowed many people to purchase homes and enjoy lower monthly payments. Many people have also refinanced their current rates to take advantage of low rates.

Currently, the prime rate in Canada is 1%. This rate is basically the best interest rate available to borrowers. While this rate is not required of lenders, most banks and lenders use the prime rate as a benchmark for determining their rates, giving customers with the best credit scores rates closest to the prime rate.

Will Red Deer Interest Rates Rise?

When Canada interest rates will rise depends on a number of factors. The Bank of Canada raises or lowers interest rates depending on the state of the economy, the demand for bonds, and inflation. Generally speaking, when the economy is struggling, Red Deer interest rates are often lowered to help encourage buying and stimulate the economy. If inflation rises or the economy needs to be stabilized, interest rates tend to go up. Additionally, there is also the option of keeping the interest rate the same.

Interest rates were expected to rise in September 2011, but the Bank of Canada held rates steady at 1% due to economic factors in both Canada and the US.

Taking Advantage of Low Rates

With Red Deer interest rates remaining low, now may be the time to purchase a home if you are seriously considering it. A number of things to keep in mind before making this decision include:

Type of mortgage loan. When you get a mortgage, you have the option of getting a fixed rate mortgage, a variable or adjustable mortgage, or a hybrid. A fixed mortgage locks your rate in for the duration of your loan, whereas a variable loan changes frequently. A hybrid combines the two, making part of your loan fixed and part variable.

Your budget. If you opt for a variable rate, current low interest rates make it tempting to overspend when it comes to financing a home. Be careful! Canada interest rates will inevitably go up, and this could leave you owing much more for your mortgage once your loan resets. Inability to afford your mortgage payments results in much more serious consequences such as foreclosure or Canada bankruptcy.

Options. Take a good look at your options before you lock in a rate or choose a variable mortgage. Will you have the option of refinancing to a fixed rate at a later date if you initially have an adjustable loan? Do you have to pay a penalty if you want to pay off your loan early? These are all things to consider.

Interest Rate forecast. Interest rate predictions are usually pretty accurate, and it’s important to consult these before deciding on a loan. If interest rates are expected to go lower, for example, it may be better to wait before locking in a loan or opt for a variable loan.

With interest rates at record lows, it’s a good idea to take advantage of them now before they rise.  While the Internet can be a great resource for initial research, it’s important to speak to and work with a professional.

A credit card can be powerful tool in your financial toolbox. It can also decimate your financial health and ruin your Red Deer credit. How much does it really cost you to use your credit card?

How Credit Makes Money for Your Lender

We all know that our credit card makes cash available to us for purchases by lending us money that we do not have to spend. But do we really understand why our lender is willing to extend us credit? Do we understand the difference between a 15% rate and a 23% rate in terms of profit to our credit card company?

Let’s say you have a credit card that has a balance of $1000. Let’s also say you were late for a payment and that your rate went from 15% to 23%. We will also suppose that you make a minimum payment each month.

An on-line ‘cost of credit’ calculator can help us understand the costs of credit. We can also input the two different rates to see how much one late payment has cost you.

At 23%, your $1000 credit card balance will take you approximately 71 months to pay off if you pay a minimum payment of 3% monthly or $25. You paid $803.00 in interest, which goes directly to your lender.

Now let’s see what happens when we change the rate to 15%. In this scenario we still pay the minimum amount of 3% or $25 monthly. This time, at 15%, it will take you 54 months to pay off your debt and you will have paid $370 in interest. Your one late payment cost you $473 and 17 extra months.

What is Your Red Deer Debt Costing You Every Month?

You can figure out how much your debt costs each month.

1. Divide the APR by 365 days. (23% / 365= .06…)
2. Now multiply that .06 by the 30 days in the month. (.06 X 30=1.8 or .018%)
3. Finally, multiply .018 by your $1000 balance. (.018 X $1000=$18)

Every month your creditor takes $18 of your $25 payment as profit and the rest is subtracted from your remaining debt. You can easily see who the winner is here.

Understanding the Credit Vocabulary

Credit card companies use lots of terms and acronyms. Here’s a list of terms and their definitions:

• Principal is the amount you borrow.
• Interest is the cost you pay to borrow money.
• Term is length of time you have to pay off the debt.
• APR is an acronym for Annual Percentage Rate. That’s the rate of interest you pay and includes all of the costs involved in borrowing money; costs like your credit card fee.
•  Simple interest is the amount of interest you pay yearly based on the formula,

Interest = Principal X Interest X Term ($1000 X 15% X 5 years=$145)

By understanding the true costs related to Red Deer credit, you can make a more informed decision regarding credit.

Many seniors are facing retirement while trying to balance a significant debt load; it’s is a fact of life for many in this post-recession world. And unfortunately, a growing number of seniors are forced to file bankruptcy in Canada as a result of too much Red Deer debt.

These six strategies may help those approaching retirement to free themselves from Red Deer debt and move on to enjoy a rosy retirement.

Delay Retirement

Delaying retirement may seem more like a sentence than a savvy financial strategy, but savvy it is. The 65 year old of the new millennium is, on average, healthier and more robust than the 65 year old of the New Deal era. Why retire when you are at the height of your career and feeling great?  If you have the option, take it. Work to rid yourself of debt. You can also enjoy the satisfaction of delaying the receipt of benefits. The longer you wait to receive benefits, the greater your benefit. Five years can add a lot of money to your coffers and increase your monthly benefit, too.

Make Debt Reduction Job One

Make debt reduction more important than anything else, and then build a budget that reflects your new priority. Inform family members and trusted friends that you are on a path to financial freedom and ask for their support.

Keep Healthy

If you don’t have costly medical bills, you can bank a tidy sum or use those funds to pay down debt. You may also qualify for cheaper health insurance policies or realize greater benefits from your health insurance policy. Here are some smart tips from health care providers and nutrionists:

• Have a physical annually.
• Schedule health screenings like colonoscopies, mammograms, and blood work at the proper time and follow through.
• Exercise–it’s that simple. Talk to your doctor first and then get moving.
• Eat right. Visit with a nutritionist. Understand the needs of those over 65.
• Tame stress by developing stress-fighting strategies
• Visit the dentist regularly.

Examine Your Mortgage

Many homeowners approaching retirement find their mortgages years away from pay off or, worse yet, under water. Speak with a trusted financial counselor about available options. It may be smart to refinance at a lower rate or shorter term. Find out if a mortgage adjustment is available for your loan.

Cut Unnecessary Spending

Take a close look at your spending. As you examine each line item, ask yourself if the item is worth the cost when held up against your new goal of debt elimination. Cable, cell phone plans, eating out, and expensive trips are places to begin your search.

Weekend Work

Your years have given you a great deal of experience; experience that many people might find valuable.  Consider marketing your experience and reaping a financial reward. If you are a woodworker, great cook, or talented artist, you may be able to turn these skills into income.

By eliminating Red Deer debt, smart seniors can look towards a positive financial future. It’s never too late to start.

Most residents of Red Deer who find themselves in deep financial trouble are aware that declaring personal bankruptcy is one way of getting out of debt.  However, not all residents take the time to learn what bankruptcy really means and how it will affect them.  This is especially true for anyone who owns their own home.  Those who have heard of a friend or relative who lost a home in bankruptcy will rarely consider getting financial help in Red Deer from the one source best suited to help them – a licensed bankruptcy trustee.

If your intent is to avoid bankruptcy at all costs, why would you want to talk to someone with the word “bankruptcy” in their professional title?  If you own a home, wouldn’t you be better off seeking financial help in Red Deer from a credit counseling agency?

First, you need to know bankruptcy trustees do more than manage personal and business bankruptcy filings.  The Bankruptcy and Insolvency Act of Canada (BIA) includes a non-bankruptcy alternative called a consumer proposal that allows Canadians to protect all that they own from the risk of seizure and sale that accompanies some bankruptcies.

We can help you determine whether or not your home is actually at risk if you declare bankruptcy in Red Deer.  The BIA ensures no one loses all they own in a bankruptcy, but filers with assets may have to contribute some of what they own to go towards creditor repayment.  Exemption allowances are set by the Provinces and Alberta has the most generous allowance for home equity — $40,000 – of any province in the country.

If your home is at risk, we can work with you to structure a consumer proposal that will reduce your total unsecured debt and protect your assets.

However, there is a more compelling reason to come to us if you need financial help in Red Deer.  To earn a license to operate as a bankruptcy trustee in Canada, we go through a rigorous series of coursework and examinations.  No other debt solution professional in the country is required to have that kind of background.  In fact, there are no educational requirements for credit counselors or debt settlement consultants at all.  In our case, our first responsibility, as mandated by law, is to counsel anyone who walks through our doors on all debt solution alternatives, not just the bankruptcy and proposal filings we manage.

If you have friends or relatives who were in their earning years back in the early 1950’s, they can tell you at that time credit was used only for home and car purchases.  The credit card explosion in the 1960’s changed all that and today it is hard to imagine a life without credit.  This is one of the reasons some residents fear a Red Deer bankruptcy as a means of eliminating severe debt burdens.  They believe they will not be able to obtain credit after being discharged from bankruptcy.

That is not true.  You can obtain credit after bankruptcy and some financial experts claim it is easier than most people think.  While that is true, you need to know it will cost you more to get credit.  To restore your credit, you need three things – stable income, cash on hand and time.  A separate issue is whether or not you should even be interested in obtaining credit after a discharge from bankruptcy.

From time to time, we get people in our offices who tell us they don’t care what happens to their credit rating and have no interest in every applying for credit again.  Having been burned by credit spending, they have no desire to get back in that game.

In truth, that is an unrealistic view of life in the modern world.  Without access to credit, few Canadians could buy a home or even a new car.  Restoring your credit is important and there are things you can do to restore your credit worthiness after a bankruptcy discharge.

While in bankruptcy, we strongly urge our clients to start a savings account.  Remember, during bankruptcy you no longer have to make those monthly debt repayments to your unsecured creditors, so you will have more cash left over at the end of each month.

Once you get discharged from bankruptcy, you can begin putting the cash to work for you, starting with a secured credit card.  With a secured card, your credit limit matches the amount you deposit in a savings account with the card issuer.  You can use the card to make purchases in the same way you use unsecured cards.  Using the card and making on-time payments lets you begin to reestablish your credit history.

You can also take out bank installment loans using savings account balances as collateral.  Even if you have the cash to pay for major appliance purchases, taking out an installment loan instead helps restore your credit.

Many of the people we see in our offices have waited until some legal collection activity like a wage garnishment convinced them they had no choice but to consider a Red Deer bankruptcy.  They come in with little idea of what they might lose in a bankruptcy or its duration.  However, on occasion we do have people come in early in the process of slipping deep into debt to explore their options.

Instead of dismissing a Red Deer bankruptcy without bothering to learn what it would mean for them and how it works, they are willing to learn the advantages and disadvantages of all debt solutions, including a declaration of personal bankruptcy.

Bankruptcy is not for everyone but it has its advantages.  Many of our clients are shocked to learn that the ability to get credit after you climb out from under your debt is actually better after a bankruptcy than with any other structured repayment plan.

The fact is if you need professional help to restructure your debt or the way you are repaying it, or both, your credit rating is going to take a hit.  Even though a Red Deer bankruptcy gives you a worse credit rating than a credit counseling solution, the net effect is the same.  You cannot get credit until you successfully complete the program.  At that point, you can begin to rebuild your credit history.

Credit counseling solutions take from 3 to 5 years to complete, while the vast majority of bankruptcies last from 9 to 21 months.

The longest duration in Red Deer bankruptcy is 36 months, and that is for a second time filer with surplus income.  Yes, there are people who get into deep financial trouble more than once in their lives and our bankruptcy laws now make it harder to file for that second bankruptcy.

Surplus income is the second thing that determines the duration of your bankruptcy.  The government sets a threshold living allowance based on family size and location.  While our laws give debtors the chance to get out of debt and start over, they also try to be fair to creditors.  The idea is a bankruptcy filer with substantial assets and income should contribute something towards paying the creditors back.

If your monthly gross income exceeds the threshold allowance by more than $200 a percentage of the surplus amount over the $200 will go towards your creditors.  In addition, surplus income increases the duration of your Red Deer bankruptcy.

If you have filed before and you have no surplus income, the duration of your bankruptcy will be 24 months.

If you have never filed before and you have surplus income, you will remain in bankruptcy for 21 months.

If you have no surplus income and have never declared personal bankruptcy before, the duration of your Red Deer bankruptcy will be 9 months.

For those in financial trouble whose credit is still good and still have income, an ideal solution for many residents is debt consolidation.  Red Deer residents, however, should know this solution for present troubles may mean even greater troubles in the future.

Although it sometimes happens, it is very rare for a debt consolidation loan originator to require formal credit counselling before extending the loan.  Nor do they require the borrower to close their existing unsecured credit accounts.

We have people come to us ready to declare personal bankruptcy in Red Deer and when we discuss their history and background, we learn they took out a debt consolidation loan several years ago.  What happened?

The truth is debt consolidation loans do nothing to reduce your total debt.  Their advantage is they reduce your total monthly unsecured debt repayments.  If you owe $30,000 to six unsecured creditors, you take out a loan and “consolidate” those multiple accounts into a single account with the new lender.  But you still owe $30,000.

Where the trouble can begin is with those unsecured accounts that now have zero balances.  In a world where many of us are driven to spend and spend and spend, we often end up living beyond our true means, thanks to the availability of easy credit.

So the person or couple that just consolidated that $30,000 now has $30,000 in newly available credit.  And the spending cycle sometimes starts all over again.  The difference is that this time when they max out those cards, they still owe the balance on the debt consolidation loan.  Since these loans are usually collateralized by equity in a home, the home itself is now at risk.

Real credit counselling is about much more than learning some principles of personal money management and how to safely use credit.  It gives you the opportunity to look at yourself in the mirror and ask yourself what it is that drives you to live beyond your means.

In a culture that values financial success above all else and where material possessions are a sign of such success, the answer is not hard to find.  If you define yourself by what you own, not by whom you are, you may need to redefine yourself, or perhaps, win the lottery.  Credit counselling education can help you change your life priorities.  Reputable non-profit credit counselling agencies often offer free credit counselling education classes.

Not everyone experiencing financial difficulty in Red Deer is in the same boat.  Some residents have lost their sources of income and lack resources of any kind to stay afloat.  With no savings, no job prospects, and no family or friends to help them out, a declaration of personal bankruptcy may be their only solution.

Then there are those Red Deer residents who still have income, but it is just not enough to stretch far enough to cover all the bills at the end of the month.  While some with good credit and sufficient equity in their homes can take out a debt consolidation loan to lower their monthly payments, financial difficulty for most of us means missing payments, which destroys a credit rating.

The Bankruptcy and Insolvency Act of Canada (BIA) includes two non-bankruptcy solutions that offer debt relief while at the same time providing legal protection against creditor collection activity.

An Orderly Payment of Debts is there for those who wish to repay the total they owe, but need a little help from their creditors.  With a stable source of income, an OPD can work for Red Deer residents with moderate levels of debt.

An OPD is not available throughout Canada – only in Saskatchewan, Nova Scotia, and here in Alberta through the government approved non-profit credit counseling agency, Money Mentors.

Counselors from Money Mentors will assess your financial circumstances and determine a monthly payment you could realistically make over a four-year period, based on your income and family size.  If the total payments over that four-year period cover your total debt, with a reduction in interest rates to 5%, you might qualify for an OPD.

The counselor will present your petition to the court, and if granted, a legal consolidation order will prohibit your creditors from any collection activity against you as long as you continue to make the required payments.

Although this solution works for many people, you need to be aware of the consequences should you be unable to keep up with the payments.  Once you default, your creditors can immediately seek an enforcement order to collect what they are owed without first having to get a judgment order that the debt is valid.  In effect, the initial consolidation order is the same as a judgment order.

Money Mentors is a reputable agency and would never suggest a payment you could not afford to make.  However, you need to consider the fact these payments must continue for four years.  If you have any doubts at all about your ability to keep up with them, you might want to consider an alternative solution.

The explosion in the cost of higher education throughout North America has led to a situation where almost all students have to take out student loans to finance their studies.  In times past, an advanced degree yielded higher paying jobs that made the repayment of even substantial loan amounts possible.  In today’s job market, that is not always the case and more and younger Canadians are falling behind in student loan repayments, often leading to mounting credit problems as they rely on credit to survive.  Is a Red Deer bankruptcy a viable solution?

If you have been searching the Internet for information about dealing with student loans, you already know you cannot include loans less than seven years old in a bankruptcy filing.  It used to be ten years, but the Bankruptcy and Insolvency Act of Canada (BIA) was amended in 2009 to make it somewhat easier to eliminate student loans.

However, many Canadians who could get out from under their student loans by declaring a Red Deer bankruptcy are reluctant to do so because they fear the impact bankruptcy will have on their credit.

We see people in our offices all the time who believe filing bankruptcy means they will never be able to get credit again.  This is just not true.  In fact, although in the short term bankruptcy does destroy your credit rating, it is the quickest way to get out of debt and start rebuilding your credit history.  You do not have to wait until the notation of bankruptcy drops off your credit report.  As soon as you get your discharge from bankruptcy, you can apply for a secured credit card and begin establishing a history of on-time repayment.  The only qualifications you will need are a stable source of income and some cash to put up to act as collateral for the secured credit account.

If you have student loans less than seven years old and you are unable to keep up with those loans and the rest of your unsecured debt repayments, a Red Deer bankruptcy might still be your best solution.

Once you declare bankruptcy, you stop making repayments on the rest of your unsecured debt, although you will still be responsible for the student loans.  In most cases, the additional disposable income you get from eliminating those other payments is enough to allow you to continue meeting your student loan obligations.

Many residents who need financial help in Red Deer spend time on the Internet searching for advice on different self-help debt solutions as well as professionally provided options like debt settlement plans.  Some even look into declaring personal bankruptcy in Red Deer as a possible solution.

Unfortunately, while they are searching, some are ignoring the collection letters they are getting from a creditor.  Even if you believe you can work things out without the legal protection of bankruptcy or a consumer proposal, do not ignore creditor collection activity.

Expand your Internet search to include consumer rights regarding bill and debt collection activity in Alberta.  You do have rights and if you feel a creditor has violated those rights, you can file a formal complaint with the provincial government.  You can find complaint forms and specific regulations regarding debt collection at www.servicealberta.ca.

In case you did not know, there are stages in the debt collection process, and often different players appear.  Typically, the first contact comes directly from the creditor, but they can turn the debt over to a collection agency.  However, the law requires them to inform you in writing that they intend to use a professional collection agency.

In theory, debt collection agencies have regulations to follow, but in practice, it sometimes seems they assume everyone they deal with is a deadbeat, with no intention of paying up, even though they can afford it.  They can be ruthless and often rely on misleading information and in some case outright lies.  They get away with this because most Canadians do not know their rights as they relate to creditor collection activity.

Your creditors can call you, but only between the hours of 7 AM and 10 PM.  However, they cannot continue to call you to the point of harassment.  They can call you at work and they can call your employer one time, but only to verify your employment status.

They can call relatives and neighbors, but only to get an address and phone number.  They cannot give you misleading or false information.  If you have done some research on your rights and our bankruptcy laws, you will know insolvency is not a crime.  If a debt collector implies you could go to jail, your rights are being violated.

Most people in need of financial help in Red Deer start down the path with one or two debts.  Contacting those creditors immediately rather than waiting for them to turn your debt over to a collection agency is definitely something you should do.  At that point, creditors may be willing to accept a reduced payment over an extended period.  It costs them money to hire debt collectors and pursue legal action.  It is in their interest to reach an agreement with you if possible.

If you are in need of financial help in Red Deer, chances are one of your main concerns is dealing with your creditors.  Some residents come to us for help and tell us of sleepless nights and ignoring the telephone out of fear there will be a nasty creditor collection agent on the other end.

Ignoring your creditors is not going to make you sleep better at night, nor is it going to stop the calls.  If you ignore your creditors long enough, eventually one or more will take legal action against you.  If you have a source of income or own a home with equity in it, you can rest assured, they will come after you.  Yes, they may wait a long time, simply because it costs them a substantial amount to take legal action.  However, they will come.

We often get people in our offices ready to declare personal bankruptcy in Red Deer because their wages have been garnished.  Had they come to us sooner, they might have avoided bankruptcy.

You need to know the sooner you get financial help, the more solution options you will have from which to choose.  When it comes to dealing with your creditors, your first source of financial help is the telephone.  Call your creditors and let them know what is going on.

You may not realize this, but many lending institutions in Canada are having their own financial difficulties dealing with mounting loan losses.  In 2010, almost 100,000 Canadians declared bankruptcy and their creditors got next to nothing in repayment.

Creditors have a financial interest in keeping you out of bankruptcy so you can pay them back.  Some credit card companies have programs for people in trouble where they allow reduced interest and lower monthly payments.  If you do not call and ask for help, you will never learn what they might be able to do to help.

Fear can paralyze residents in financial trouble.  They fear their creditors; they fear for their futures; and most of all, they fear the unknown.

We can help you with the unknown.  The federal government licenses us to manage bankruptcies and a non-bankruptcy alternative called a consumer proposal.  As part of our responsibilities, we are required to counsel anyone who comes to see us on all available sources of financial help, not just bankruptcy.

If you need financial help in Red Deer, schedule a free initial consultation at your earliest convenience.

Many residents in severe financial difficulty in Red Deer are oblivious to the warning signs all around them.  It can be difficult to acknowledge you are in trouble, especially when the process is gradual.

You may have heard the old story about the frog and the boiling water.  As the story goes, if you throw a frog into a pot of boiling water it will jump out.  Put the same frog in a pot of cold water and heat it to boiling very gradually and the frog will remain in the pot.

We see people in our offices every day who are truly sitting in a pot of boiling water.  Most of them look at us in bewilderment and wonder how they possibly could have gotten so far into a financial hole.

Yes, it is true that job loss, a layoff, or some other form of income interruption gets people into hot financial water.  But you cannot ignore the fact that many Canadians in similar situations manage to survive without bankruptcy.

How do they survive?  Most have kept their debt levels low and have a safety net in a savings account.  Doing that requires living not just within your means, but in many cases, it requires living below your means.

The biggest warning sign of financial trouble is simply living beyond your means.  Availability of credit makes that possible and over time, you may be on a road that ends up with a Red Deer bankruptcy.

In today’s world, there is more and more pressure to acquire more and more things to demonstrate how successful we are.  Many of us who cannot afford these things simply charge them, with the best intentions of paying down our growing debt over time.

If you look at your credit card statements over the last several months and see increasing balances, that is a warning sign.

If you are approaching or over your credit limit on your credit cards, that is a warning sign.

If you are using credit card advances to pay some of your other bills, that is a warning sign.

By far the most significant warning sign is creditor collection calls.  Like the frog in boiling water, once we get a few letters and calls and no action is taken, we doubt creditors will make good on their threats.  Eventually, they will and you may find yourself facing a wage garnishment or other legal action.  Do not ignore the warning signs.  Take action to help yourself before the water gets too hot.

For the majority of residents experiencing severe financial stress in Red Deer, bankruptcy is an option of which they are aware, but it is a solution few are eager to adopt.  Both debt collectors and the professional debt solution companies offering solutions prey on people’s fear that bankruptcy will change their lives dramatically.

In theory, bankruptcy has several advantages as a way to eliminate debt – speed, cost, and credit repair.  In practice, most Canadians have such a deeply ingrained fear of bankruptcy they fail to consider these advantages.

This fear should come as no surprise.  If you search the Internet for information about ways to deal with severe debt burdens, you learn many experts caution that bankruptcy should be a last resort.

While there is a substantial downside to a Red Deer bankruptcy for filers with significant assets, the upside should not be ignored.  Here are three things you need to know about bankruptcy:

1. Bankruptcy is quick.
2. Bankruptcy is cost effective.
3. Bankruptcy may be the best way to start rebuilding your credit.

Speed

To get out of debt and eliminate your financial stress, there are solutions you can implement on your own, or you can seek professional help.  Of the professionally available solutions, none is quicker than bankruptcy.

First time bankruptcy filers complete their bankruptcy process in nine months – for filers with low income – to twenty-one months – for filers with higher income.  Debt management and settlement plans take from three to five years to complete.

In addition, these options do not offer the legal protection from creditor collection activity you get with bankruptcy.

Finally, almost everyone who files a Red Deer bankruptcy is successfully discharged, while many non-bankruptcy options fail.  The hard truth is conditions change and many Canadians cannot keep up with the payments required in those plans.

Cost

Non-bankruptcy options require substantial commissions paid to the solution provider as well as sign-up fees and monthly maintenance fees in some cases.  These costs can be substantial.

For low-income filers, costs are limited to filing costs and trustees fees, which are set by the federal government.  Higher income filers might lose some of what they own when declaring bankruptcy, but in many cases, a comparison of value of assets lost against debts forgiven still makes bankruptcy more cost effective.  To determine the actual cost to you of a bankruptcy, you need to meet with a licensed bankruptcy trustee in Red Deer.  Initial consultations are free of charge.

Credit Repair

Finally, despite what you might have heard about bankruptcy destroying your credit rating, the fact is bankruptcy is the fastest way to begin restoring your credit rating.  While it is true the R9 credit rating you get when you file bankruptcy is worse than the R7 that goes with a debt management or settlement plan, both of these ratings prohibit you from getting credit while you are in the program.

Once you have successfully completed any of these debt solutions, you can begin to rebuild your credit rating, and you will be out of bankruptcy sooner than any other solution.

If you are experiencing financial difficulty in Red Deer and have been searching for solutions, chances are you have read you should stay away from a declaration of personal bankruptcy.  The Internet is full of debt help websites advising Canadians to consider a Canada bankruptcy only as a last resort.

Consequently, we have people coming into our offices ready for that last resort that really have no idea what Canada bankruptcy laws are and what a bankruptcy filing will mean for them.

When we begin our discussions with them, we point out the Bankruptcy and Insolvency Act of Canada (BIA) actually provides an alternative solution to bankruptcy – a consumer proposal.  It is surprising how many residents of Red Deer have never heard of this solution.

As you may know, in a bankruptcy filing you may lose some of what you own.  Canada bankruptcy laws recognize that while debtors have a right to get a fresh financial start, creditors also have the right to be repaid as much as each individual debtor can realistically afford to pay.

Low-income filers with minimal assets often lose nothing in a bankruptcy.  However, higher income filers will usually have to give up some of what they own to be used to repay their creditors.  No one loses everything and each province has exemption allowances that determine what you can keep.  You will be happy to learn Alberta has some of the most generous allowances in Canada.

However, depending on your circumstances, you may want to consider a consumer proposal as an alternative to bankruptcy.  It is a more costly solution, but you get to keep all your assets if you qualify for a proposal.

Most Red Deer residents have seen or read advertisements from debt settlement companies touting their solution allowing you to cut your unsecured debt in half, without bankruptcy.  A consumer proposal does the same thing at a lower cost.  More importantly, consumer proposals come with something debt settlement plans do not – legal protection from your creditors.

What those commercials and print advertisements never tell you is creditors are not legally bound to honor their settlement plan.  If you sign up for one of those programs, there is no guarantee one or more of your unsecured creditors will not come after you with legal collection activity down the road, even if you are successfully honoring the terms of the plan.

To find out if you qualify for a consumer proposal and how one might help you deal with your financial difficulty in Red Deer, schedule a free initial consultation with a licensed bankruptcy trustee.

A few years ago the Federal Consumer Agency of Canada (FCAC) did a study of the credit solution industry in Canada and concluded with a warning to Canadians to make sure they “shop around” before selecting a firm.  If you are in need of financial help in Red Deer, here are a few things you should know about potential credit solution scams.

First, the FCAC focused heavily on the fees charged by credit solution providers.  Even though some Provinces have regulations about what they can charge, there is a great deal of variety across providers.

Most of these providers do disclose all their fees, but it can be hard to find them buried in reams of documentation you are asked to read and sign to join the program.

In fact, if you have read some of the horror stories you find in Internet forums from people who claim to have been scammed by a credit solution provider, the information they needed was disclosed.  Canadians everywhere who are in desperate need of help are not always in a mental state that allows them to fully read and understand the fine print.

Credit counseling solutions often work out just fine for consumers with lower amounts of total debt with fewer creditors.  The problems with these solutions come from the timing of the payments made to the creditors.

As you know, with a credit solution, you stop paying your creditors directly and instead make a monthly payment directly to the solution provider.  If your total debt is small, and you only have two or three credit accounts to pay off, the repayments start flowing pretty quickly.

But if your debt total is high, the solution provider will hold your payments in escrow until the balance is large enough to make a settlement offer to one of your creditors.  These programs can take three to five years to complete.  If you have five or more creditors to repay, each with high balances, they are going to have to wait their turn.

In some cases, the timing of settlement offers is not a problem, as long as the creditors know what to expect.  If you are thinking about enrolling in a credit solution program, you need to know how the provider will communicate with your creditors.

In most cases where consumers end up being sued by a creditor, the problem can be traced to lack of communication from the credit solution provider.  If letters from the provider end up in the wrong department, or if an initial letter is not followed up with the timing of an expected settlement, creditors are left in the dark as to when they can expect some repayment.

At the beginning of 2011 there was some encouraging news about the disturbing level of household debt across Canada – it went down slightly.  It would appear more and more Canadians are realizing they may be in a bit of financial trouble and are looking for some form or debt relief.So, just where should you go for financial help in Red Deer?  Why not begin by looking in the mirror?

Have you seen those commercials from debt solution companies promising debt relief through negotiating reductions in what you owe with your creditors?  There is nothing they will do for you that you cannot do for yourself.

It all begins with a personal budget. If you have been searching the Internet for ideas on debt relief and financial help in Red Deer you have already read that in some cases personal budgeting alone is enough to provide enough debt relief to allow residents to get back on sound financial ground on their own.

Unfortunately, some residents who feel they are already in too deep ignore personal budgeting.  Then when they go to a credit counselor, a debt solution company, or a licensed bankruptcy trustee, they are asked to spell out their financial circumstances – essentially the same information you would need for a personal budget.

The point is, all forms of debt relief – even declaring personal bankruptcy in Red Deer – will require you to lay your budget out on paper.  So why not get started at the first sign you need debt relief?

With a budget on paper you can determine how much additional cash you can generate to go towards debt repayments.  Most residents do this by cutting expenses to the bone and generating additional income.   Additional income is not restricted to finding a second or part time job.  You can also raise cash by selling some of what you own that you can live without.

Now that you know what you can afford to go towards debt repayments, you can negotiate better repayment terms directly with your creditors.  Creditors are only interested in one thing – getting back as much of their money as possible.

Your creditors know debt relief programs can be expensive, so they are well aware you will have more money to send their way if you are representing yourself.  If you can document you current difficulties and your ability to repay, you may be able to negotiate a longer repayment period at a lower interest rate or even a reduction in what you owe.

While the business news tells us economic conditions are improving slightly, there are still many residents dealing with financial difficulty in Red Deer and all across Canada.In our work, we see many different kinds of people who come to see us at different stages of their financial troubles.  Unfortunately, far too many wait until a wage garnishment or a legal property attachment forces them to take action.

Others have learned through the Internet that licensed bankruptcy trustees like us offer free initial consultations where we evaluate the client’s financial condition and review potential solutions, several of which keep residents out of bankruptcy.

Financial difficulty in Red Deer can be like finding yourself in a deep hole.  How do you best get out of the hole?  To answer that question, you have to know how deep the hole is and what tools are available to get you out of there.

Personal budgeting is a way of both assessing the depth of the hole and the tools you might have at your disposal.  The tools are your income and your assets.  Your total debt and your monthly expenses determine the size of the hole.

Getting out of debt involves a combination of raising income and lowering expenses.  Budget worksheets you can find on the Internet give you a framework you can use to track and record where the money you do have is going.

Once you know where you are spending, you can determine what you can cut.  We recommend clients challenge the designation you find on some budget worksheets labeled Fixed Expenses.  When you think about it, you should realize your housing costs are required expenses in that you have to have somewhere to live; but they are not fixed, since you can lower them at your discretion.  You can sell your home or move to a cheaper apartment.

Another thing we help our clients do is create a statement of financial net worth.  The budget worksheets you find on the net deal with income and expenses, but fail to look at another tool you have in your struggle to get out of the hole – what you own.

Your net worth is the difference between what you owe and what you own.  Even residents of Red Deer with negative financial worth often have things they could sell to keep them out of bankruptcy.  Internet sites like EBay and Craigslist provide a marketplace for raising some much-needed cash for those experiencing financial difficulty in Red Deer.

If you need financial help in Red Deer, you need to know both where to turn for help and what kind of help is available.  While there are several debt solutions you can try on your own – like debt consolidation loans and debt reduction through personal budgeting – there really is no substitute for sitting down with a professional debt consultant.  Bankruptcy Trustees like us offer alternatives to bankruptcy called Consumer Proposals and non-profit Credit Counseling Agencies offer Debt Management Plans and Orderly Payment of Debts.

There is another source of help available from for-profit debt settlement companies.  You have certainly seen their ads on television, promising to cut your debt in half or more while staying out of bankruptcy.  There are a couple things you need to know about these providers and their solution plans.

First, the government does not regulate them.  Licensed trustees go through an extensive educational program and even an RCMP background check.  We have to pass several certification exams before the government grants us a license.  For-profit debt solution providers have no qualification standards. What’s more, the government does not regulate the fees they charge and they can vary considerably.

But the most important thing you need to know is a Consumer Proposal comes with full legal protection.  If you have been getting harassing phone calls and letters or even had your wages garnished, all that will stop if your consumer proposal is accepted by your creditors.  What’s more, your creditors are prohibited by law from attempting to contact you in any way at all, as long as you are making the payments set out in your proposal.

At the risk of being very self-serving, we see no reason for you to consider one of these plans when they are essentially identical to what happens with a Consumer Proposal;  Debt settlement plans cost more and do not protect you from legal action.

The process of filing a Consumer Proposal begins by meeting with a trustee where we assess your situation to first determine whether a consumer proposal is right for you.  If other kinds of financial help in Red Deer would better fit your situation, we will so advise you.  If a proposal is your best option, we work up a monthly payment you can afford to make and then present a proposal to your creditors specifying a reduced amount you can repay over no more than five years.  Creditors are very willing to accept proposals when they realize they will be repaid more than they will get if you are forced into bankruptcy.

Although there are indications an economic recovery is well underway, there are still many Canadians in deep financial trouble.  No one wants to end up in a Red Deer bankruptcy.  Many residents of Red Deer start looking for debt solutions by searching the Internet.

If you are one of them, you have certainly come across the advice to set personal budgets as a means of getting out of debt on your own, without resorting to debt settlement plans or other debt solution options.

In our work, we deal with residents of Red Deer who can no longer cope with their debt burdens and seek the protection of a Red Deer bankruptcy.  Some have tried personal budgets and failed.

Once we begin to dig into the details of their financial lives, we find some aspects of their budgets that if they had changed them earlier, might have helped them stay out of bankruptcy.

First, conventional wisdom on personal budgeting suggests saving 10% of your income before you attack your pile of bills.  If you are in deep trouble, it might be time to adopt some guerilla tactics when it comes to your budget.

If you’re putting income into savings, stop.  Does it make sense to commit money to a 1.5 or 2% savings account when you are carrying credit card balances at 12%, 15%, or more?

Second, conventional wisdom says to stay current with all your bills, cutting expenses to the bone to make this happen.  Suppose you can’t?

You may be surprised to learn some of your creditors are more willing to work with you than you might think, if you give them a chance.  Many are more than willing to grant bill extensions, if you ask.  Hydro, water, and telephone bills are good places to start.  Call them directly and offer a reduced payment this month – some will accept as little as $25.  Most utility companies do no report delinquencies to the credit reporting bureaus till you are so far behind you make their disconnect list.  Even some hard-nosed credit card issuers may accept partial payment and forego late fees and increased interest charges.

Finally, make sure the budgeting system you use is clear about the difference between fixed or non-discretionary expenses and variable or discretionary expenses.  Some personal budgeting worksheets you find list Rent/Home Mortgage as a fixed expense.

The forms we use to collect budgeting information from our clients before they declare a Red Deer bankruptcy has Rent/Mortgage as a discretionary expense.  Although it might be inconvenient and even painful, at your discretion, you can move to a cheaper apartment or home to help get your debt under control.

Even though some economic indicators point to a gradual improvement in economic activity, there are still thousands of Canadians who are finding it difficult to manage their financial obligations.  If you feel you need financial help in Red Deer, you are not alone.

Your Internet searches for information on the kinds of financial help available have probably already uncovered debt consolidation as the option that least affects your credit rating.  If you have a high level of total debt, refinancing your mortgage may be your best debt consolidation solution.

As you know, there is no guarantee you will be able to borrow the total amount of equity you now have in your home, if you need the full amount.  First, you need good credit to get a loan at an interest rate low enough to make refinancing your mortgage cost effective.

Credit requirements should tell you to look into refinancing your mortgage as an option at the first sign of financial difficulty, before you start going late on any of your credit monthly repayments.

Refinancing also depends on a stable source of income.  Lenders want to be as sure as they can be that you will have the ability to repay what you borrow.  If you fear your income might be reduced substantially at some point in the future for whatever reason, should you think about running out right now and refinancing while your income still justifies the loan?

Absolutely not.  We have dealt with people who refinanced their mortgages only to find themselves staring at the prospect of a bankruptcy filing a few years after the refinance because they forgot one simple fact about debt consolidation.  It doesn’t lower your debt at all.  The advantage of debt consolidation comes from the lowered monthly payments.

If you owed $50,000 in other debt and refinanced your existing $100,000 mortgage to pay off the 50k, you still owe $150,000.  If your income falls as you fear it might, will you be able to handle the mortgage payment?

The second and perhaps more dangerous disadvantage of refinancing your mortgage to get the financial help in Red Deer you need is credit card use.  Refinancing to pay off credit card debt leaves you with zero balances on your credit cards.  You need to take a hard look in the mirror and ask yourself if you can learn to control your credit card spending.

Some people who are having financial difficulty in Red Deer ignore the situation in the hopes something will happen to make things better.  It rarely does.  Others look for professional help through credit counseling or debt settlement solutions.  You need to know all professional solutions are going to start from the same point – an assessment of your current financial situation.

Knowing how you are currently managing your money is a basic principle of personal finance many residents of Red Deer ignore.  Every day we see people in our offices who just know they don’t have e

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nough money to go around and pay all the bills on time each month.  For many, where the money they do have is going is a mystery.

No matter how severe the financial difficulty you face, you get back on your feet in one of two ways – you bring in more income or you cut expenses.  Sometimes it is possible to do some of both, although finding a part time job these days is not an option for many residents of Red Deer.

When it comes to expenses, you cannot cut until you know exactly where you spend your money.  For example, if you stop for a gourmet cup of coffee and a muffin every morning on your way to work and pay with a swipe of the card, you probably do not know how much of your income is going towards something you could modify and save some money.   A key principle of personal finance and better money management is accounting for every dime you spend.

Two other key principles of personal finance are knowing your debt-to-income ratio and your net worth. The debt-to-income ratio is the amount of your monthly income that goes towards repaying existing debt.  You get the number by dividing the total monthly debt payments you have by the total gross income you bring in each month.  High debt-to-income ratios are sure signs of financial difficulty in Red Deer.

Your net worth is the difference between what you own and what you owe.  Most of us own things we really do not think of as assets in the way we think of major items like a home or a car.  However, many residents of Red Deer own things they may be able to live without.  Selling off some of those assets can raise needed cash to get total debt down to levels that are more manageable.

Once you know how much additional income you might be able to generate through cutting expenses or selling assets, you can establish a strict personal budget to set spending limits and even savings goals, both of which will help you get out of financial difficulty in Red Deer.

Ruining a credit rating is one of the principal reasons some people will go to any lengths to avoid declaring bankruptcy in Red Deer.  Ironically, many Red Deer residents come into our offices once they have learned declaring bankruptcy can actually be the quickest way to begin the credit repair process.  What they sometimes don’t realize is that you can begin to repair your credit without declaring bankruptcy, if you act early enough.  Here’s how:

First, you need to know your credit score is not like a high school or college Grade Point Average (GPA) that stays with you forever.  A credit score is a snapshot in time that reflects your credit history as it is right now.  Credit scores fluctuate, depending on how much credit you have, how much you owe, and your payment history.

Second, you need to know those credit repair companies you find on the Internet can only help you with making sure your credit report is accurate. If you have been struggling to keep up with your bills for a while, chances are you have some late payments already on your credit report.  No credit repair company or credit repair kit you can buy on the net can help you erase accurate late payment history.  They will help you find and correct errors in your report, but anyone who claims they can erase accurate late payment history is not telling you the truth.

The only way you can deal with late payment history is to get current and establish a record of on time payment.  Over time, your credit score will improve.  To do that, you’ll have to come up with some extra cash to contribute towards paying down your overdue debts and then staying current.

That task might seem beyond you, but we have helped many residents of Red Deer start the credit repair process without declaring bankruptcy in Red Deer by setting up a strict personal budget.  If you are one of thousands of Canadians who rely on credit cards for daily purchases and don’t save your charge slips or examine each charge on your monthly credit card statements, you really don’t know where your money is going.

With a personal budget, you can determine where you can cut spending to leave more income available for paying down debt.  If you are beyond the point where that is possible, declaring bankruptcy in Red Deer will eliminate most of your unsecured debt so you can start over again.

If you have been searching for information on how to file bankruptcy, you already know you will need to use a Red Deer licensed bankruptcy trustee.  Since you pay their fees, it is only natural that some residents of Red Deer think the trustee should represent them in the same way a lawyer might represent them.

The fact is a Red Deer licensed bankruptcy trustee is not a direct representative of the debtor.  But neither are they a representative of the creditors.  Bankruptcy trustees act as administrators of the bankruptcy process as set forth in the Bankruptcy and Insolvency Act (BIA) of Canada.  To understand why this is so, we have to consider the intent of our bankruptcy laws.The BIA recognizes there are two sides in a bankruptcy – you the debtor and your creditors – and both sides have rights to be protected.  You have a right to get a fresh financial start, but your creditors have the right to be repaid a portion of what they are owed, provided you can afford it.

What this means is that if you have substantial assets, your Red Deer licensed bankruptcy trustee may seize and sell some of them, with the proceeds going towards partial creditor repayment.

A very few Canadians with a lot of assets try to get around this by “hiding” some of what they own before declaring.  Believe it or not, there are people out there who have sold an expensive recreational vehicle to a relative for a few dollars with the intent of buying the asset back after they are discharged from bankruptcy.

If trustees acted like lawyers and learned of a transaction like this, the attorney client privilege might apply.  Would that be fair to the creditor?

The role of a Red Deer licensed bankruptcy trustee is to ensure that both parties in the bankruptcy transaction follow the “rules of the game.”  If you do have to contribute assets and income towards repayment during bankruptcy, the trustee will ensure that any claims made by your creditors are valid.

Although government regulations ensure all licensed bankruptcy trustees are both competent and trustworthy, you do have recourse if you feel the Red Deer licensed bankruptcy trustee you have hired is biased or has done something you feel is not right.  You can call the Office of the Superintendent of Bankruptcy – the federal agency that regulates trustees – and file a complaint.  The OSP will investigate your complaint and resolve the dispute.

If you’ve already spent time searching the Internet for information on debt solutions in Canada, you may wonder how we could even ask the question.  Expert after expert tells you declaring personal bankruptcy in Red Deer should be a last resort.  With its severely negative consequences, you are told you should do anything you can to avoid filing for bankruptcy to solve your debt problems.Many residents of Red Deer do precisely that.  Even though they are unable to meet their monthly debt payments without resorting to using one credit card to pay the minimum on another, they refuse to even think about bankruptcy.  Payday loans once in awhile are perfectly acceptable but a discussion of what is involved in declaring personal bankruptcy in Red Deer is unthinkable.

Then the available credit begins to dry up and sooner or later one of the creditors you’ve gone far behind with starts with the threatening letters and calls.  When the notification comes of court-ordered wage garnishment, only then do these Red Deer residents come in to see us or another licensed bankruptcy trustee in the area

Now they are certain declaring personal bankruptcy in Red Deer is their only choice, when in fact, it might not be.  But you need to know, in some cases, bankruptcy is your best debt solution and the sooner you declare, the better off you will be.

The most important negative consequence of declaring personal bankruptcy in Red Deer is asset loss.  Canada’s bankruptcy laws acknowledge the rights of creditors to be repaid as much of what they are owed as a debtor can afford without undue hardship.

The law protects all Canadian citizens who file for personal bankruptcy from losing all they own.  But filers with substantial assets of high value may lose some of what they own when they file.  In addition, they may have to contribute a small portion of their monthly income towards creditor repayment while in bankruptcy.

The truth is if you have few assets and modest income, bankruptcy can be the quickest and least costly debt solution available for you.  Under those circumstances you can be discharged from bankruptcy in nine months and walk away free of your unsecured debt.  There are a few exceptions, like student loans under seven years and alimony and child support payments.

If you have heard declaring personal bankruptcy in Red Deer will prevent you from getting credit for the rest of your life, you heard wrong.  There are many myths surrounding what bankruptcy actually involves.  To learn whether bankruptcy is truly your best option, schedule a free initial consultation with us or any licensed bankruptcy trustee in Red Deer.

For many Canadians, personal bankruptcy may actually be the best path out of the severe debt burdens they face.  However, the thought of declaring bankruptcy frightens many of us.  So instead of learning what bankruptcy really involves, we look for alternative solutions to bankruptcy in Red Deer and all across the country.

While there are several options, they have significant differences, making some more appropriate for certain debt situations than others.  If you have been searching the Internet in an attempt to identify these alternative solutions to bankruptcy in Red Deer and learn what they can do, you have undoubtedly uncovered some good general information.  What are often missing are the specific details about how a particular solution fits your unique financial circumstances.

Here are three things Red Deer residents need to know about how to learn the alternative solutions to bankruptcy in Red Deer:

1. For specific answers, you will need to meet with a debt help professional.
2.  There are significant differences across the sources of professional help.
3.  There are only two legally binding alternative solutions to bankruptcy.

First, there is no way to determine what alternative solution to bankruptcy in Red Deer will be the best for your financial situation without knowing the situation.  While you can create your own statement of financial condition, it will not cost you anything to get professional help to get that done.  All three sources of professional debt help – credit counselors, debt solution companies, and licensed bankruptcy trustees – offer initial consultations at no charge.

Second, you need to know there are major differences amongst this trio of debt solution providers.  Bankruptcy trustees are licensed by the federal government.  Although their title would seem to say bankruptcies is all they do, that is not the case.  The also offer something called a consumer proposal, which many debt experts feel is the best alternative solution to bankruptcy.

What’s more, their licensing requirements call for a rigorous series of educational courses and qualifying examinations.  They undergo a background check from the Royal Canadian Mounted Police and the Office of the Superintendent of Bankruptcy sets the fees and commissions they charge for their services.

Neither credit counseling agencies nor debt solution companies are regulated in any way.  There is huge variation in the fees and commissions they charge.  While some belong to professional associations that have membership standards, it is entirely possible for literally anyone to hang a shingle over their door and call himself or herself a credit counselor or debt solution consultant.

Third, the alternative solutions you will learn from credit counselors or debt solution companies are not legally binding on your creditors.  If your wages are already being garnished, the creditors do not have to stop.  In addition, they can initiate legal collection activities against you at any time in the future.

There are only two alternative solutions to bankruptcy in Red Deer that will stop any collection activities underway and prevent any future action.  One is an Orderly Payment of Debts, available only in the Provinces of Alberta, Saskatchewan, PEI, or Nova Scotia through a government approved credit counselor.  The other alternative solution is the consumer proposal, available through licensed bankruptcy trustees anywhere in Canada.

The CRA (Canada Revenue Agency) is the federal government organization responsible for the fair and equitable collection of tax revenue for the Canadian government.  What happens when you owe the CRA and you cannot pay?  To some residents of Red Deer, CRA debt is viewed as the same as any other unpaid debt.  In fact, many Canadians who owe the CRA ignore the debt in the belief unpaid credit card debt is a more serious matter.

Nothing could be further from the truth.  The worst possible thing you can do if you have CRA debt is ignoring it.  Although the government may be slower to take collection measures against you than a privately owned credit card issuer may, they will come after you for what you owe, and they have far more power to collect than does a corporation.

You may know that your creditors have legal means of collecting what they are owed, including wage garnishments, bank account attachments, and property liens.  Privately held companies must go through a legal process to initiate these collection activities, but the CRA operates by a different set of rules.

For them, initiating a wage garnishment is an administrative matter.  They do not have to go through the courts and they will come after you for what you owe.  They have to.  Would it be fair to those taxpayers who pay in full and on time if the CRA negotiated a settlement with you for less than you owe?

You have heard the commercials for those debt solution companies that promise to cut your debt in half or more.  That does not work with Red Deer CRA debt.  A debt repayment plan negotiated by a credit-counseling agency or a debt solution company cannot help you with Red Deer CRA debt.  How can you deal with CRA debt?

You have two options, depending on how much you owe and your ability to repay the debt.  You can try to negotiate directly with the CRA or you can use a licensed bankruptcy trustee for an insolvency filing.

However, before considering a solution you have to verify the amount you owe.  People struggling to pay their bills generally have neither the time nor the money to file a tax return ensuring they take advantage of all the deductions they can.  Get professional advice or invest the time needed to learn the tax code and make sure you are paying as little tax as legally possible.  Most people who do this find they owe less than the CRA says they do.

With that number in hand, you can go to the CRA to try to reach a settlement.  If you are in trouble due to job loss, medical emergency, or because of a natural disaster you can apply to the CRA Fair Practices Commission for a waiver of the interest and penalties on what you owe.

While the CRA may be willing to accept monthly repayments, you must be able to pay them off in 12 months.  The CRA feels carrying past debt into a new tax year is not advisable.  If you simply cannot pay them, you can do nothing and wait for them to garnish your wages or attach your property to collect.  If you make little and own nothing, there is little they can do.  However, if you have income and property to protect, you may need to declare insolvency to get rid of your CRA debt.

The Bankruptcy and Insolvency Act of Canada outlines insolvency proceedings, which include personal bankruptcy filings and consumer proposals.  In both of these, CRA debt is treated the same as any other unsecured debt.

To see if you qualify for an insolvency proceeding as a means of dealing with Red Deer CRA debt you need to meet with a licensed bankruptcy trustee in Red Deer.  Bankruptcy trustees are professional debt consultants licensed by the federal government to handle personal and business insolvencies.  If you are reluctant to declare bankruptcy, you should know the consumer proposal is another insolvency proceeding that protects your assets and much of your income that might be lost in a bankruptcy.

If you are one of the thousands of Canadians unable to deal with mounting debt, you should know that bankruptcy is not the only way out of the quagmire in which you find yourself.  For some, a Red Deer bankruptcy may very well be the best way to deal with severe debt burdens.  However, no one should declare bankruptcy without considering the other available debt solutions.  Where can you turn for alternatives to a Red Deer bankruptcy?  Here are three sources to consider:

1.  Look to Yourself
2.  Credit Counseling Agencies/Debt Solution Companies
3.  Licensed Bankruptcy Trustees

Do it Yourself Alternatives

Depending on how deep you are in debt, there are things you can do without professional help to stay out of a Red Deer bankruptcy.

First, if your credit is still good and you have enough equity in your home, you can take out a debt consolidation loan to pay off your unsecured debt.  The result will be significantly lower monthly debt repayments and more disposable income at the end of the month.

Second, you can set up a personal budget to cut expenses to the bone, allowing more income available for paying down your debt.

Third, you can contact your creditors directly and propose alternative repayment arrangements.  All your creditors are interested in is collecting as much of what they are owed as they can.  If you can afford to continue to pay them something, propose an alternative amount.  You will have to prove to them you are in difficulty but can continue to pay the lower amount you are proposing.  Creditors do not want to see you declare bankruptcy, where they get little or nothing back, and in some cases are willing to listen to this kind of informal proposal direct from you.

Credit Counselors and Debt Management Companies

Professional help is available through both credit counseling agencies – some non-profit and some for-profit—and for-profit debt solution companies.  Both begin by assessing your current financial situation and determining a monthly debt repayment you can realistically make over a period of 3 to 5 years.

Based on that total amount you can contribute – less their fees and commissions – they will attempt to negotiate alternative repayment arrangements with each of your existing unsecured creditors.

If the total is enough to repay your entire debt, they will suggest a debt management plan that takes 3 years to complete.  Creditors are generally very willing to accept these arrangements even if it means lowering their interest rates since they will eventually be paid back in full.

If the total you can contribute is too low, the professional debt solution provider will suggest a debt settlement program.  Here the time period is extended to 5 years and the professional negotiates reductions in the total you owe to match the 5-year total you can contribute, again minus their fees and commissions.  Creditors are less willing to accept these plans since they get less than they are owed.  However, if they can be convinced bankruptcy is your next step, they may be willing to accept such an arrangement.

In both these cases, your monthly payments are made directly to the professional debt solution provider, not to your creditors.  The professional then distributes the fund to your creditors over time.

Licensed Bankruptcy Trustees

Your final source of help is a licensed bankruptcy trustee.  While their professional title implies bankruptcies are all they do, this is not the case.  They also handle consumer proposals, which many experts feel is the best alternative to a Red Deer bankruptcy, available for residents who stand to lose assets in a bankruptcy filing.  A proposal is similar to a debt settlement plan, where you repay less than the total you owe.  However, it has a huge advantage – legal protection.  With a proposal, you are protected from collection activities of any kind.

If you can no longer pay your bills on time every month and you are getting threatening letters and phone calls from creditors, a Red Deer bankruptcy can get you out of the trouble you are in.

The Bankruptcy and Insolvency Act (BIA) of Canada outlines our bankruptcy laws.  Their intent is to provide “honest debtors with an opportunity for a fresh financial start.” The mechanics of filing for bankruptcy are relatively simple and straightforward.  However, there are some broader things to consider if you are thinking of filing a Red Deer bankruptcy.  Here are five things you need to know before filing:

1.  Some of the things you may have heard about bankruptcy are not true.
2.  Not everyone qualifies for bankruptcy.
3.  Bankruptcy is not free.
4.  You may lose some of what you own in a bankruptcy filing.
5.  Licensed bankruptcy trustees administer bankruptcy filings.

First, there is a lot of misinformation about some of the disadvantages of filing bankruptcy floating around.  Much of it originates from the scare tactics of unscrupulous debt collectors whose sole purpose is to scare you out of parting with what little money you have.  If you have heard you could go to jail if you cannot pay anything in a bankruptcy, that is not true.  Nor is it true that you will never be able to get credit again or that your spouse will become liable for your debts if you file.  You need to separate bankruptcy facts from bankruptcy fiction before you make the decision to file.

Second, you must be legally insolvent to file for bankruptcy with a minimum debt of $1,000.  Insolvency means you cannot pay your bills on time with the income you currently make and the assets you currently own.  Note that assets are part of the qualifying definition.  Some Internet websites about bankruptcy fail to point this out.  Simply put, if you owe $200,000 and you have assets totaling $300,000 you cannot file bankruptcy regardless of your income.  Liquidating your assets could pay your debt.

Third, bankruptcy may cost you more than you think.  Some Canadians think the only costs in a bankruptcy are legal fees and court costs.  Not true.  If you make substantial income, you will have to contribute some of it towards creditor repayment while you are in bankruptcy.  First time bankruptcy filers who have to contribute income will remain in bankruptcy for 21 months.

Fourth, the BIA protects you from losing all you own if you file, but if you own a lot, you will probably lose some of it to go towards partial repayment of your creditor.  Each Province has its own regulations regarding exemption allowances for what you own.

Fifth, in Canada you cannot file a bankruptcy on your own.  The BIA requires the use of a special bankruptcy trustee, licensed by the federal government.  Trustees are regulated by the Office of the Superintendent of Bankruptcy (OSB) and are highly trained professional debt consultants.

You might be surprised to learn they can actually help you avoid a Red Deer bankruptcy.  The BIA has another insolvency solution called a consumer proposal, which allows filers to keep all they own.  To find out if you qualify for a proposal or if bankruptcy would be a better option for you, schedule a meeting with a licensed Red Deer bankruptcy trustee as soon as possible.  An initial consultation is free of charge so you have nothing to lose and everything to gain by talking to a trustee at the first sign of financial trouble.

“I’m going bankrupt.”  Red Deer residents and indeed Canadians from coast to coast break out in a cold sweat at the mere mention of the possibility.  You need to know going bankrupt is not the only way to deal with crushing debt.  There are alternatives.

All debt solution alternatives – even personal bankruptcy – begin at the same point – an accurate assessment of your financial condition.  You are going to get out of debt either on your own or through working with your creditors to make alternative arrangements for paying them back all or part of what you owe.  To determine how to proceed you need to know where you are right now.

You need to create a financial “net worth” statement for yourself.  You need to list all that you owe, all that you own, and your sources of income.  While that is something you can do on your own, there is no reason for you not to seek professional help.  The vast majority of debt solution professionals – including credit counselors, debt solution companies, and licensed bankruptcy trustees – offer free initial consultations.  The first thing they will do for you is document your current financial circumstances.

Debt solutions are based on that initial assessment.  If your total debt is moderate and your income is stable you may be able to take out a debt consolidation loan using collateral like the equity in your home.

In some cases, reworking or establishing personal budgets can generate enough additional disposable income to get back on track with your debt repayments.  Personal budgeting involves strict expense controls and if you are already behind on some unsecured debt payments you may have to contact some of your creditors, explain your situation, and propose a gradual repayment plan.  If you start early enough in the game, creditors are more willing to listen to your proposal than you might think.

If your total debt is beyond your ability to stay current even with a loan or budget and cost controls you will need a debt repayment plan from a professional debt consultant.  You have several options.

Shop around for a reputable credit counselor or debt solution company in Red Deer.  Only meet with people who can provide real references and who have been in business for a long time.  They offer two alternatives to going bankrupt Red Deer residents can consider.

For people with low to moderate levels of total debt they have debt management plans.  The professional determines a monthly payment you can realistically make for a maximum of 3 years.  If that total amount is enough to repay all that you owe with a little help from your creditors through reduced interest rates, the professional will contact your creditors and propose this alternative repayment plan.

For people with debt levels too high to be fully repaid in 3 years there are debt settlement plans.  The idea is the same – you make a single monthly payment direct to the counselor or debt solution company.  With this plan, the professional must negotiate a reduction in the total you owe to match the amount of your monthly payments over 5 years, less their fees and commissions.  With both management and settlement plans make sure you fully understand how much you will be paying in fees and commissions to the debt solution provider.

There is one final alternative to going bankrupt Red Deer residents need to know.  It is called a consumer proposal and is available only through a licensed Red Deer bankruptcy trustee.  The terms are very similar to the debt settlement plan where you repay less than the total you currently owe.  However, consumer proposals come with legal protection against creditor collection activity.  If your creditors have already garnished your wages, a consumer proposal is the only debt repayment plan that will stop the garnishment.

If you find yourself staring at a pile of bills at the end of each month desperately trying to decide which you will pay and which you will put off until next month, you need financial help in Red Deer.  Can you work through these tough times on your own?  Where do you turn for help?  Do you need professional advice and counsel?

There is much you can learn about financial difficulties and available debt help solutions by searching the Internet.  However, nothing replaces the old-fashioned approach of sitting down, face-to-face, with a knowledgeable and trustworthy professional.

Even if you suspect you might be able to weather the storm by yourself, there is no reason not to get some professional advice.  Almost all professional debt consultants offer free initial consultations and free financial help in Red Deer so it will not cost you a dime to talk to a few.

What’s more, most of them have the skills needed to assess your current financial condition.  All debt solutions flow from the situation in which you find yourself.  If you have a significant amount of unsecured debt and you have already reduced your monthly expenses to the bone, your available solutions will look different than they would if you owed only a moderate amount and had not yet established a personal budget.

Thousands and thousands of Canadians just like you are in financial trouble and there is no shortage of professionals out there willing to help them.  Unfortunately, not all are reputable and not all are even well trained to offer advice.  There are three categories of professional debt solution providers you can explore.

The first are credit-counseling agencies — either non-profit or for profit.  A counselor will provide financial help in Red Deer and evaluate your situation and provide budgeting and credit use help if you request it.  They have debt help solutions called debt management plans that will enable you to repay your unsecured credit in 3 years, depending on the total you owe.

After reviewing your financial picture, the counselor will determine a monthly payment you can afford to make directly to them.  If the total amount over a 3-year period, less their fees and commissions, is enough to pay back all you owe at a reduced interest rate, they will contact your creditors to explain the plan.

The second are debt solution companies.  These are for-profit companies and their debt settlement plans are appropriate for people whose total debt is too high to be paid off in the 3-year period typical of debt management plans.  The central idea is the same – a single payment made directly to the debt solution company – but the debt consultant must negotiate a reduction in the total owed to match the total that will be collected over a 5-year period.

You should know that the government regulates neither credit counselors nor debt solution companies.  There is a great deal of variation in the fees they charge.  In addition, you have no guarantee that they have undergone professional training or education of any kind.

The third place you can turn for professional financial help in Red Deer is licensed bankruptcy trustees.  They are regulated by the federal Office of the Superintendent of Bankruptcy (OSB) and are highly trained.  What is more important, they are the only professionals out there who are fully knowledgeable about all debt help solutions, not just the ones they offer.

Not everyone who is having financial difficulty in Red Deer ends up declaring personal bankruptcy.  Some Canadians are jolted into trouble through an unexpected loss of income.  Even then, they can put off getting some kind of help looking for a debt solution, relying instead on savings and available credit.

At some point, difficulties meeting your monthly obligations mushroom to proportions you can no longer ignore.  For most Canadians this is a gradual process, starting with a few late pays and building up to 90-day late pays and more.  Eventually, threats of legal action and finally wage garnishments or property attachments arrive.

There are early warning signs that your situation may be getting out of control you need to know about.  The earlier you seek professional help to deal with your debt, the more options you have available.  Do not ignore any of these signs:

First, are the balances on your credit cards approaching their limits?  Are some already over limit?  Are you requesting credit increases?

Second, are you using credit card cheques to pay bills?  Are you holding off paying utility bills to be able to make your credit card minimum monthly payments?

Third, are you only making the minimum monthly payment due on all your credit cards?  Do you draw on the increase in your available credit as soon as you make the monthly payment?

Fourth, are your total monthly credit card charges greater than the total amount of your credit card debt repayment?  Do you know how much you charge every month?

Fifth, do you know how much your total unsecured debt is?  Do you have any idea how long it would take you to pay it off?

Sixth, are you taking out payday loans every month, or even every other month?

If you are experiencing any of these warning signs of financial difficulty in Red Deer, what can you do to help yourself?

To begin, you need to think about how you got to where you are.  While a sudden loss of income pushes many Canadians into a pit of severe financial difficulty, for most of us, it is credit cards that led us to the edge of that pit.

Consumer credit counseling is available from counseling agencies all across Canada.  Counselors can help you establish a personal budget, starting with figuring out exactly where the money you have is going.  In the age of credit cards, few people pay strict attention to what they are buying on the card.  They simply swipe it multiple times each day and then watch the minimum monthly payment rise.

Counselors can help you understand how to use credit properly.  If you are already in pretty deep, the first thing they usually advise is to stop the bleeding and shut down some of your cards.  They can also help you work with your creditors to reduce your monthly payments if you have no other choice.

Counselors are not the only professional debt consultants who can help with personal budgeting and credit counseling.  Licensed bankruptcy trustees do more than manage bankruptcies.  They can help you assess your level of financial difficulty in Red Deer and explain all the options available to you.

More than 100,000 Canadians filed for bankruptcy in 2010 (from July 2009 to July 2010).  Many agonize over the decision and put it off as long as possible.  As debts grow to the point of being unmanageable, some Canadians wait to take action until something like a wage garnishment shocks them to attention.  Filing for bankruptcy in Red Deer is a serious matter that should require a great deal of thought.  Here are 3 tips to keep in mind if you are considering filing bankruptcy in Red Deer.

1.  The sooner you declare, the faster you can begin getting on with your life.
2.  Start getting your financial information together the moment you begin to consider filing.

3.  Do not do anything with your assets right before filing.

First, bankruptcy is a chance at a fresh financial start.  Many Canadians struggle for months on end in the hopes something will happen to make things better.  They endure the embarrassment of a credit card being declined at a local store, and toss and turn half the night worrying about which bill collector will call next.  They avoid picking up the telephone, letting the answering machine record the latest threat of legal action.

Why not end the agony and get on with it?  If this would be your first time filing for bankruptcy in Red Deer, you would remain in bankruptcy for no more than 21 months.  Depending on your financial circumstances you could be discharged in as little as 9 months.  At that point, you would emerge virtually debt free.

Despite what you may have heard, bankruptcy is not the end of life as you know it.  You will not lose everything you own if you file for bankruptcy nor will you be shut off from credit for the rest of your life.  You can begin to rebuild your credit rating the moment you are discharged.  You do not have to wait until the notation of your filing disappears from your credit history 6 years after you are discharged.

Second, the only way to determine whether filing for bankruptcy in Red Deer is the best way for you to deal with your debt is to determine exactly what your situation is.  It is surprising that many Canadians do not know exactly where their money goes.  They only know they do not have enough to get by.  They have only vague notions of how much their assets are worth and in some cases can only estimate a rough total of what they owe.

In some cases, Canadians learn there are alternatives to bankruptcy that fit their situation better.  To file for bankruptcy you will need the services of a licensed bankruptcy trustee.  Trustees are trained debt consultants and they can help you assess your financial circumstances and explain whatever debt solution options are available to you.  There is no reason to wait to see a trustee until you are certain you want to file.  The best time to see one is at the first sign of financial trouble when they can still help you stay out of bankruptcy if that ends up being the right choice for you.

Third, do not try to save some of your assets you might lose in a bankruptcy by selling them to a relative or a friend.  The courts can view such actions as fraudulent activity and it may affect how long you remain in bankruptcy and even whether or not you are eligible to file.

The best tip you can get if you are thinking of filing for bankruptcy in Red Deer is to sit down with a licensed bankruptcy trustee as soon as possible.

Declaring bankruptcy in Red Deer as a means of dealing with bills you cannot pay and threatening calls that are keeping you up at night is not an easy choice.  The decision becomes more difficult if you have heard some of the “urban legends” about the terrible things that will happen to you if you proceed with a bankruptcy filing.

Some Canadians who would be better off with the fresh start offered by a declaration of bankruptcy put off the decision because of some of the fictional tales they may have heard.  Here are some things you need to know to separate the fact from the fiction about declaring bankruptcy in Red Deer:

• You will not go to jail nor will you lose your passport if you declare bankruptcy.
• Your spouse is not liable for what you owe if you declare bankruptcy.
• You can rebuild your credit rating after you are discharged from bankruptcy.
• Depending on where you live and how much equity you have, you may keep your home if you declare bankruptcy.
• There are differences in the costs of bankruptcy depending on your own financial circumstances.
• A licensed bankruptcy trustee can tell you exactly how a bankruptcy will affect you.

First, there are no debtors’ prisons at the edge of the Arctic Circle and no one does jail time because they cannot pay their bills.  Canadian law clearly states insolvency is not a crime.  You do not surrender your passport.

Second, if only your name appears on the credit agreement, your spouse is not liable for that debt.  In addition, your spouse’s credit rating will not include any information about your bankruptcy.

Third, although a bankruptcy will temporarily stop you from applying for credit, once discharged there are practical things you can do to begin to rebuild your credit rating.  And despite what you may have heard, you do not have to wait until the notation that you went through bankruptcy disappears from your credit file.

Fourth, no one loses everything in bankruptcy.  However, what you are allowed to keep varies from Province to Province.  In Alberta, there is an exemption allowance of $40,000 for home equity, while there is none in neighboring Manitoba.

Fifth, there is no fixed cost to a bankruptcy filing.  Filers who make little money and have no assets will end up paying filing costs and trustees fees.  Filers with substantial assets and significant income will lose some of it, but never all.  If you heard of a friend who walked out of bankruptcy with no debt and no asset or income loss, that applies strictly to him or her.  Each individual filer’s circumstances differ so their costs will differ.

Sixth, these fictions arise from two sources.  Some credit collectors attempt to frighten consumers into action, regardless of how far they stretch the truth.  They usually do it with “half-truths” where the threat of legal court action – which is a real possibility – is stretched with an implication jail time could follow the court action.  To get the real truth about declaring bankruptcy in Red Deer and what it will mean to you in specific terms, meet with a licensed Red Deer bankruptcy trustee.  Do not let the fiction prevent you from learning the true facts.

If you are at the point where you can no longer keep up with your monthly bills, you really have only two ways to deal with your debt.  First, you can generate more income so you can pay all you owe each month.  Second, you can reduce the total you pay out each month.  In tough times like these, extra income is beyond the reach of most of us and we can only go so far in cutting expenses like food and utility bills.  The major source of trouble for many Canadians is their unsecured debt, and the best way to deal with that is some form of debt consolidation.  Red Deer residents need to know there are several debt consolidation options Red Deer available.

Debt Consolidation Loans

The core idea behind all debt consolidation solutions is to eliminate the multiple monthly payments you are currently making to your unsecured creditors with a single, more affordable monthly payment.

The simplest way to do that is to take out a debt consolidation loan.  Red Deer residents with a source of collateral – such as equity in a home – and good credit can borrow money and repay all their unsecured debt, leaving a single and lower monthly payment for the new loan.

Debt Management Plans

However, debt consolidation loans are beyond the reach of many and for them there are debt management plans offered by consumer credit counseling agencies.  A professional counselor will review your financial situation and figure out a monthly payment you can afford to make towards repaying your unsecured debt.  This single payment goes to the counselor, not to your creditors.

What the counselor does for you is contact your creditors and demonstrate that you are in trouble and can no longer continue making the regular payments.  Instead, they propose an extension of the repayment period up to 3 years that will allow you to pay back all you owe.  These solutions, however, only work if your total debt is low enough to be fully paid in 3 years or less.  What then?

Debt Settlement Plans

For people with high levels of debt there are debt settlement plans.  The idea is the same as the debt management plan – consolidate your multiple monthly payments into a single payment.  Here the professional debt solution provider has a tougher job negotiating with the creditors.  First, they typically propose a repayment period of 5 years.  Second, they must get the creditors to agree to reduce the total amount you owe to match the total you will pay out with 5 years of making single payments to the provider, less their fees and commissions.

Orderly Payment of Debts (OPD)

An Orderly Payment of Debts is essentially identical to a debt management plan.  Your debt total must be low enough to be repaid in 4 years.  An OPD is only available through approved non-profit credit counselors in the Provinces of Alberta, Saskatchewan, PEI, and Nova Scotia.  An OPD is a legal proceeding that gives you protection against creditor collection activity.

Consumer Proposals

If your debt total is too high to qualify for an OPD, a Consumer Proposal is definitely an approach to debt consolidation Red Deer residents should consider.  It is similar to a debt settlement plan where you repay less than the total you owe over a 5-year period but it comes with legal protection.  To see if you qualify for a Consumer Proposal you will need to contact a licensed Red Deer bankruptcy trustee.

When it comes to debt you owe the CRA, Red Deer residents need to know there is a big difference between what you may owe a credit card company and what you owe the CRA.  For some residents of Red Deer, CRA is the bill that keeps being put off.

You have undoubtedly heard television commercials from debt solution companies and credit counseling agencies promising to cut your debt in half.  CRA debt is not something these people can help you deal with.  The CRA will not negotiate settlements with any of these professional debt solution providers.

However, in some cases, they will negotiate directly with you.  In addition, there is an option called a consumer proposal where the CRA may negotiate with a licensed bankruptcy trustee.  We will have more to say about these two options in a moment.  Right now, you just need to know credit counselors and debt solution companies cannot help you with CRA debt.

CRA debt differs from credit card debt in collection attempts as well.  A credit card company has to work through the court system to initiate wage garnishments or property attachments against you.  The CRA can initiate these methods as an administrative proceeding.

So what can you do if you have tax debt you owe, but cannot pay?  Here are seven things you need to know about dealing with CRA debt.

1. You may not owe as much as you think.
2. You need to take advantage of every tax deduction available to you.
3. You can ask the CRA Fair Practices Commission for a waiver of interest and penalties.
4. You can work directly with the CRA to set up a repayment schedule.
5. You can try to get a loan to pay your CRA debt.
6. You can file a consumer proposal to reduce your CRA debt.
7. You can declare personal bankruptcy to eliminate your CRA debt.

First, many Canadians who get behind with income tax debt pay little attention to their filings.  Some do not file at all.  The CRA does not know the details of your financial situation so the amount they say you owe may be wrong.  This is almost always the case if you are able to take deductions but have failed to do so.

Second, you need to do whatever it takes to ensure you are taking advantage of every possible deduction.  If you have friends or relatives with accounting expertise, ask for help.  Pay a professional tax preparer if you can afford it.  There may be community services agencies you can turn to for help at little or no charge if you cannot afford professional advice.

Third, if you are in trouble due to circumstances beyond your control, the CRA maintains a Fair Practices Commission that can waive the interest and penalties that have been added to your original debt.  These circumstances include job loss, medical emergencies, and natural disasters.

Fourth, if you can pay what you owe in 12 months or less, the CRA might be willing to negotiate a payment schedule, although interest and penalties will continue to accrue.

Fifth, if you have equity in your home or another source of collateral you could take out a loan to pay off your Red Deer CRA debt.

Sixth, the Bankruptcy and Insolvency Act of Canada contains a provision called a consumer proposal that allows debtors – working with a licensed bankruptcy trustee – to pay back their creditors less than the total owed over a five-year period.  Under a proposal, your CRA debt is treated the same as your other unsecured debt.  It is the only option you have to reduce what you owe the CRA.

Seventh, you can declare personal bankruptcy and your Red Deer CRA debt will also be treated the same as your other unsecured debt.  To determine if a consumer proposal or a personal bankruptcy is the only option you have for dealing with your CRA debt, meet with a licensed Red Deer bankruptcy trustee as soon as possible.

Many Canadians find the easiest debt to ignore is taxes owed the CRA.  Red Deer residents are no exception here when given the difficult choice of paying utility and credit card bills versus writing a cheque to the CRA.

However, your tax debt will not go away on its own.  You have to take some action and even doing nothing is a viable option, provided you know what can happen.  Here are 7 facts about debts owed to the CRA Red Deer residents need to know:

1.  You might be able to reduce the total you owe the CRA

2.  The CRA is sometimes willing to negotiate directly with you on a repayment schedule

3.  The CRA does not have to go to court to initiate collection activities against you

4.  Doing nothing is an option

5.  CRA will not work with credit counseling agencies or debt solution companies.

6.  A consumer proposal is a way to reduce the total you owe the CRA

7.  Personal bankruptcy may eliminate your CRA debt

First, while personal bankruptcy is the only way to walk away from your CRA debt, it is highly likely you can reduce what you owe them.  If you have been ignoring income tax debt, chances are you haven’t paid attention to accurate filing either.  You need to examine your past filings and make sure you are taking advantage of all the tax deductions you can.  The best way to do this is to get help from someone with experience in tax issues.  If you can’t afford to pay a professional, try to get help from friends, relatives, or business acquaintances who are up-to-date on Canadian tax law.

Second, if you could manage monthly payments that would pay back the total you owe the CRA in a 12-month period, they might be willing to enter into a negotiated repayment schedule with you.  If you haven’t paid because you lost your job, had a medical emergency, or been the victim of a natural disaster, you could apply to the Fair Practices Commission of the CRA for a waiver of penalties and interest, reducing the total you owe.

Third, many Canadians fail to appreciate the power the CRA has to collect unpaid debt.  While your other unsecured creditors must work through the legal system to get a wage garnishment or a property attachment against you to collect what they are owed, the CRA doesn’t need the sanction of the Canadian courts.  They can garnish your wages as an administrative proceeding.

Fourth, if you do nothing, eventually the CRA will come after you with wage garnishments and property attachments.  However, there are limits to how much they can garnish so if you are receiving federal assistance or have very low income, there is nothing for them to garnish.  Similarly, if you own no property, there is nothing for them to attach.

In situations like these, doing nothing is an option but it comes at a high price.  That CRA debt will remain with you as a blot on your credit for the rest of your life or until you pay it off.

Fifth, although the debt repayment plans offered by debt solution providers can’t help you with your CRA debt, they can lower your monthly payments enough on your other unsecured debt to allow you to negotiate a repayment schedule directly with the CRA.

Sixth, our bankruptcy laws allow consumers the option of filing a ‘consumer proposal‘ with their unsecured creditors where the total debt owed is reduced significantly.  You have to meet with a licensed Red Deer bankruptcy trustee to see if you qualify for a proposal.  If you do, your CRA debt becomes the same as your other unsecured debt.  If a majority of your creditors accepts the proposal by dollar volume, the CRA is bound to honor the proposal.

Seventh, in a bankruptcy filing, CRA debt is treated like any other unsecured debt.  Depending on the total you owe to all your creditors, the best option for dealing with debts owed to the CRA Red Deer residents have may well be personal bankruptcy.

Bankruptcy.  Red Deer residents will go to almost any lengths to avoid it.  However, in many cases, it is the best option for getting rid of your debt and stopping the harassing phone calls and threats of collection activity.  For your information, here are the seven steps you will need to take to file for bankruptcy in Red Deer:

1.  Prepare a list of trustees to interview.
2.  Schedule initial consultations with two or more trustees.
3.  Complete a financial information form.
4.  Meet with the trustee to review your information.
5.  Trustee prepares the paperwork necessary for filing.
6.  Meet with the trustee to sign the paperwork.
7.  Trustee files the paperwork with the Office of the Superintendent of Bankruptcy (OSB).

First, you have to find a licensed trustee to handle your filing.  The Bankruptcy and Insolvency Act (BIA) of Canada has established our bankruptcy laws and a filing requires the services of a trustee, licensed by the OSB.  There are differences in bankruptcy filings across the Provinces so you will need to find a local Red Deer trustee, licensed in Alberta.

Before making the decision to declare bankruptcy, Red Deer residents need to know it is a long and difficult process so it is important to select a trustee with whom you are comfortable working.  You will be working with this person until you are discharged from bankruptcy in anywhere from 9 months to 21 months, if this is your first bankruptcy filing.

Second, even though government regulations control the fees and commission trustees can charge and ensures all trustees are fully qualified, it is sound practice to meet with at least two trustees.  Initial consultations are free of charge so you have nothing to lose by meeting with several trustees.  You can build a prospect list using Internet local search.

Third, at your first meeting the trustee will give you a financial information form to complete.  The trustee will also discuss bankruptcy alternatives with you.  It is important you allow yourself the time needed to consider what you are doing before you make a decision.  Take the form home and complete it.  The same information will be needed even if you ultimately decide against declaring bankruptcy and go with another solution.

Fourth, you will meet again with the trustee to review your information for accuracy and completeness.  Now it is decision time.  You need to make up your mind and give the trustee permission to take the next step.  The trustee will explain exactly what the bankruptcy will cost you and what you will need to do during the process.

Fifth, the trustee will prepare the paperwork necessary for filing your bankruptcy.

Sixth, it usually takes a trustee a few days to get the paperwork ready for your signature. Take this opportunity to think over your decision to file.  At this point, you should know all you need to know about what bankruptcy will mean for you.  You should also know what alternatives you have.  Make sure you are fully satisfied that bankruptcy is your best choice before returning to the trustee’s office to sign the paperwork.

Seventh, the trustee will file the paperwork and the OSB will issue a “stay of proceedings.”  This stay orders your creditors to stop any collection activities they had underway against you before your declared bankruptcy.  Red Deer residents will be happy to know the stay also stops creditors from even making contact with you while you are in bankruptcy.

For the past several years, around 100,000 Canadians have been declaring bankruptcy every year.  Some Canadians share their experiences with friends and relatives throughout the country in an effort to be helpful.  However, if they do not know that a bankruptcy in Red Deer, Alberta, is different from a bankruptcy in Hamilton, Ontario, they can do more harm than good.  There are significant differences in the way the federal bankruptcy laws are implemented across the Provinces.

The federal Bankruptcy and Insolvency Act (BIA) protects bankruptcy filers from losing all they own in a declaration of personal bankruptcy.  However, in an attempt to be fair to creditors who have a right to be repaid some of what they are owed, the law also stipulates that filers with significant income and assets will have to contribute some of what they own and some of what they make towards creditor repayment.  Some assets are exempt and the Provinces determine the exemption allowances.

If you have a friends in Hamilton who told you they lost their home when they filed for bankruptcy, you are probably fearful of losing your home in Red Deer should you file.  However, Ontario has no exemption allowance for equity in a principal residence while Alberta has an allowance of $40,000.

What this means is that if the current equity in your home is less than $40,000 you will keep your home if you file for bankruptcy in Red Deer.  Alberta has the most generous exemption allowance for home equity in the country.  Residents of Quebec, Ontario, and Manitoba have no allowance, while Saskatchewan has an exemption of $32,000 and British Columbia’s exemption ranges between $9,000 and $12,000.  The higher allowance is for residents of the greater Vancouver area.

However, Alberta does not have the most generous allowances in every asset category.  Your friends in Ontario could keep one car valued at no more than $5,650 while your exemption is only $5,000.

You should also know that it is possible for bankruptcy filers to keep some of their assets that are over the exemption allowance by “buying back” the difference from the bankruptcy estate.  If your car is worth $7,500, you could keep the car by contributing the $2,500 difference to the bankruptcy estate.

What is the bankruptcy estate?

If you declare bankruptcy in Red Deer, one of the first things you will need to do is turn over your assets to the licensed bankruptcy trustee you have selected to manage your bankruptcy.  The trustee will determine what assets you can keep and what assets must be seized and sold.  The funds go into an escrow account and are later distributed to creditors who file valid claims against the estate.  Bankruptcy filers with significant income will be contributing some of what they earn every month into the estate for that same purpose.

To fully understand what filing bankruptcy in Red Deer will cost you in terms of both income and loss of assets, you need to meet with a bankruptcy trustee licensed in Alberta.