Category: Credit Counselling

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Collection Agencies – Know Your Rights

When you are behind in paying a debt, creditors may turn your account over to a collection agency in an attempt to recover the amount owed. Whatever the situation is that landed an account in the hands of a collection agency, there are certain rules that they must abide by. It is important to know your rights when dealing with collection agencies.

– Written notification. The collection agency must notify you in writing that they have assumed your account. If you are receiving phone calls from an agency that has not sent you written notification, ask for this to be sent to assure that it is not a fraudulent action.
– Only pay what you owe. Collection agencies are not allowed to collect more than the amount owed in Canada. Their fee is taken out of the amount owed to your creditor so no additional fees should be added on top of what your originally owed the creditor.
– No harassment. While collection agencies are allowed to contact you to collect the debt, they are not allowed to harass you or your family. There are also certain times of day that are restricted from collection attempts, check with the rules within your province or territory.
– Contacting others to collect your debt. Collection agencies are not allowed to contact your friends, neighbors, family or any outsider to try and get information besides phone number or address to collect your debt.
– Legal action. You must be notified before a collection agency can begin attempting to collect the debt through legal or court action.

If you owe the debt, it is always best to pay it in full as soon as possible or make arrangements with the collection agency to do so. However, if you feel they are using illegal or unjust means to try and collect money from you, contact your provincial or territorial consumer affairs office and report the agencies actions.

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Debt and Divorce – How to Deal with it

Divorce is never easy, especially when it comes to splitting up assets and debts. In most cases, the married parties must agree on how to divide the martial belongings, both what is owned and what is owed. While assets are easily divided, debt is a little more tricky. Most martial debt that is in both of the couple’s names can affect both people for as long as the debt exists, regardless who the divorce papers say is in charge of paying it back. Before filing for divorce, couples should take in to consideration how it will affect their debt and credit situation.

Divorce decrees are not recognized by most lenders. If a marital debt is in both names of the couple, then it is still considered owed by both regardless of what the divorce court or papers have declared. For example, if the couple bought a boat together and the wife is awarded the boat and the loan that goes with it, the husband is still responsible if the payments are not made. Unless the wife is able and willing to refinance the boat in only her name, the husbands is still expected to make the payments if she does not.

Since many marital loans and debts may take years or even decades to pay off, as long as they exist, the couple is still tied to each other. One way to handle this is to separate debts into one or the others name only before the divorce. Another is to pay off the debts together before the divorce. For large ticket debts like homes or vehicles, it may be best to sell the property versus having one person take over the payments while the other person’s name is still attached to the debt. By dealing with the debt issue ahead of time, both people can go their separate ways without having a financial tie for years to come.

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Secured Debt vs Unsecured Debt – What’s The Difference?


When consumers buy on credit, there are two main types of debt that they can incur: secured and unsecured. The difference is fairly simple, yet they can be treated very differently in many ways. In basic terms, a secured debt has collateral that can be taken if the debt is not repaid. Unsecured debt is not attached to any tangible collateral, only the promise of repayment by the debtor. Because of this main difference, these two types of debt usually have different interest rates and consequences when they are not repaid.

Secured Debt
Most secured debt is for large purchases or investments. In these cases the loan is borrowed to buy a large purchase, such as a house, vehicle or boat. Because the loan is secured, interest rates are generally lower than unsecured credit. The item purchased is put as collateral with the stipulation that if the loan is not paid as agreed, the lending institution has the right to repossess the item. Another way secured debt is incurred is for cash loans. A person may use an item such as a home or vehicle as collateral to receive monies for personal reasons. Whatever is used as collateral is then subject to possible repossession if the loan is not repaid or if the person files bankruptcy.

Unsecured Debt
The most common types of unsecured debts are credit cards or signature loans. In both cases, credit is given based on the promise of the debtor to repay. While not repaying the debt will negatively affect the persons credit worthiness and score, usually the lender has no alternatives beyond reporting the unpaid debt to credit agencies. Due to this, unsecured credit and loans are generally at higher interest rates since they are a higher risk for the lenders. If the person files bankruptcy or does not pay, the debt is usually a complete loss for the lender.

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Couponing – You Don’t Need To Be Extreme to Save Money



There are many books, TV shows and online websites dedicated to showing how extreme coupon use can save hundreds and even thousands of dollars. As impressive as these savings may be, they do require an amount of time and dedication that many families cannot or are not willing to give. However, there are ways to make the most of coupon savings without making it a full-time project.

Smart Shopping
There is more to saving substantial money on groceries using coupons than just clipping out the ones that are for products that a family currently needs. The true trick to saving large amounts of money throughout the year is to change the way that a family shops, incorporating coupons into the strategy. By buying items when they are priced the lowest and adding coupons to make the price even lower instead of only buying those same items when they run out, can be a huge money saver.

Prices on all items go up and down, based on many uncontrollable factors, including seasonal changes and corporate buying patterns. Extreme coupon users know this and save their coupons to combine with low prices. By doing this on all items whenever possible, a family may get a years worth of cereal or shampoo at a fraction of the cost of buying it only as they need it.

Look at the Big Picture
To make this possible, instead of only buying what is needed for the next week or two, the bigger picture needs to be looked at. Grocery lists need to be built around savings, stock piling on good coupon deals and doing less impulse buying on wants versus needs. Although it can take a while to get a surplus of items on hand, once this becomes a habit, it can save hundreds if not thousands of dollars a year.

The main idea is to use coupons to save money over the long run, not just on what a family needs today. Combining coupons with sales prices to stock up on everyday items is a way every family can save using coupons, even if they are not “extreme”.

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6 Tips to Help You Get Back On Track

Whatever your financial life goals are, it often takes discipline, planning and a lot of hard work to achieve them. You need to know where your hard-earned money is going before you can make the necessary changes to your spending habits. Here are 6 steps to follow to help you get on track.

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Peace of Mind at Retirement

For those who are approaching retirement in the next few decades, the recent recession has changed many goals when it comes to retirement saving. While building a substantial savings for retirement through high earning investments was once the goal of many of baby boomers, a new value has been placed on the peace of mind that comes from stable, safe ways to ensure income for their retirement years.

Security Builds Peace Of Mind
The recession hit many hard, shrinking the size of their accumulated wealth and taking away the financial security that they thought was already theirs. This shock to the economy has made retirement investors more focused on keeping what they have, versus building a monumental retirement savings through higher risk investments. The change has lead to more baby boomers considering fixed rate annuities and other guaranteed investments that will protect their assets and slowly grow their retirement savings.

The quick reduction in investment values in the past decade has changed the entire mindset of those both young and old.For those approaching retirement age, there is no longer the illusion that money lost in high-risk investments can be quickly recouped. Protecting savings to ensure a steady and reliable income for retirement is more important to many than trying to grow nest eggs quickly for a more comfortable lifestyle. Younger generations have seen the backlash that has happened to their parents and grandparents, and many will proceed more cautiously when planning their own investments.

Although the lesson was financially painful for many, it was a valuable lesson to be learned for all investors. High-risk investments can be lucrative and have their place within an investment portfolio; however, the peace of mind that comes from having stability and security for retirement can be even more valuable.

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Financial Blues – Spending Hangover


There is nothing like a spending hangover to take the wind out of a good spending spree. Once you are done congratulating yourself on the great gifts that you purchased for friends and family, the reality begins to set in. You have stretched your budget beyond all recognition, and have no idea how you are going to pay for all this. It is time to stop thinking in the moment and start planning ahead.

When you look at it, most of what you spend can be anticipated. Holidays, birthdays and seasoning spending are good examples of constants in every person’s life. So why wait until the last minute to generate the income that you need for special occasions? Instead, save throughout the year so that you have disposable income set aside for gifts, holidays and clothes.

Take advantage of sales throughout the year, too. Just because a birthday is a few months away, it doesn’t mean you can’t pick up a great early deal. If you are in a month where you have some spare cash in your budget, take full advantage by getting ahead of the game and purchasing gifts or paying off a holiday early.

You don’t have to spend a fortune every time you take out your credit card or visit an ATM, either. There is much more pleasure to be derived from being creative with your budget. Retro and thrift shores are treasure troths, where you can buy a whole wardrobe of items for the price of two or three. Alternatively, if you have a creative talent you can make your own gifts for little to no cost, which adds a personal touch, too.

It’s the little things that matter, and when it comes to a budget, it’s the little things that often break the bank. You can avoid these last minute expenses by planning carefully for every eventuality. Make sure you don’t end up with a list of things you need to buy, with no room in your budget to pay for them. Make a list for every event, from your daily expense to your next holiday.

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Financial Tips for University and College Students

Are you struggling with student debts, paying bills or otherwise making ends meet? Well,
knowing where, when and on what you spend your money is the best way to manage your
student budget. If you live month to month, on the premise that there are good times and bad
times, then you need to take a closer look at your finances.

Never spend all your money, just because it is there. Remember those bad times? That
spare cash would have come in pretty handy, if you still had it. Sit down and take stock of
everything you spend each month. Keep all your receipts and create spending categories
such as food, rent, school costs and clothes. Deduct these costs from your income and you
will begin to get a picture of where your money is going. Next you need to decide which
outgoing costs should take priority, and where you can afford to make cuts. Note: This does
not necessarily mean cutting out complete categories, but rather, streamlining what you spend
on each.

Certain categories, of course, are fixed and need to be paid first. Your rent, and loan
payments are examples of fixed costs, however, in some cases you may be able to negotiate
lower payments if you are struggling. Luxuries, on the other hand, are fair game. Until you
have a working budget in place, it is likely that you will have to cut back completely on the
small pleasures in life. Remember, renting a movie costs significantly less than a trip to the
movies, eating in is the new eating out, and thrift clothing is just another name for retro.

Wherever possible, spend cash and avoid using credit cards. If you have to use credit cards
at all, make sure that you pay off the balance in full each month. When you start to see spare
cash in your budget, do not immediately go on a spending spree. Lastly, save whatever you
can, no matter how small an amount, and look at it as a emergency savings or a nest-egg for
the future.

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November is Financial Literacy Month in Canada

Did you know that the month of November is Financial Literacy Month?

This initiative is a nationwide campaign aimed at helping Canadians increase their financial knowledge so that they can make more informed decisions when it comes to their personal finances. Understanding basic financial principles and practices is an essential ingredient to every household’s financial stability.

At Creditaid, one of our highest priorities is helping families understand how the credit system works and how to manage their finances wisely. Many people fall into financial crisis without being fully aware of how they got there in the first place. We believe a clear understanding of the credit system and available financial tools can help people turn their situations around before they find themselves too far in debt. Financial management is key and we are happy to provide you with the tools and information you need to get there.

Creditaid is committed to helping Canadians and we’re here to help. With the Creditaid Budget Bootcamp, we have taken this commitment one step further. Our Budget Bootcamp will take you step by step through a comprehensive budgeting plan, aided by many of the tools we use to help our clients on a daily basis.

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Paying Down Debt Is an Increasing Priority According to RBC Survey

There were some very interesting statistics generated from a recent online poll conducted by the Royal Bank of Canada, which made comparisons between the debt carried by Canadian households in 2012 versus 2011. The number of survey respondents who had no personal debt, outside their mortgage, increased from 22% to 26% during the last year; a very positive move towards debt-free living.

In spite of this positive direction, there were still some indicators of concern.

For those respondents which did have personal debt, the average amount of that debt did increase by $84 over last year’s number, instead of going down. Just over half, 51% of the respondents, indicated that they were more concerned with paying down debt than investing in the future. In addition, one in three of the survey’s participants noted that they experienced anxiety over their debt levels, an increase in those statistics over 2011.

Canadians appear to be moving in towards more debt-free living, according to this survey, but there is still work to do, to increase the financial stability of Canadian households in general.

Read More about RBC Debt Poll – http://www.rbc.com/newsroom/2012/1010-debt-poll.html