credit cards
Posts about credit card debt and strategies to deal with it, including filing a consumer proposal or personal bankruptcy proceeding.
How Does a Credit Score in Canada Really Work?
Introduction In theory, a credit score should be quite simple – through an algorithm, you’re assigned a numerical score that determines your credit worthiness. The score is a weighted average of many factors, including but not limited to: Your payment history Your credit utilization rate, which is how much of your credit limit you have uses versus how much you have available to you Balance owing on your debts The length of your credit history Public records (such as bankruptcy) Number of inquiries into your credit file Different Credit Scores But the reality is not that simple. Here are the complicating factors: Each of the two major credit rating agencies,…
20 Year Old Considering Personal Bankruptcy
A reader asks: I messed up big time but I’ve learned a lot of lessons. I earned just a hair shy of $200,000 in my first year as a real estate agent at 20 years old. I was way too immature to have that kind of money, and blew most of it without saving. I invested my tax savings in growing my team which I thought would have been an easy pay back. Lost it all. No worries though just sell more houses. Depression strikes, mother gets very sick, I took on an expensive apartment and car. Not emotionally mature enough to handle these things like an adult yet. Hemorrhaging…
My Wife Has Made a Huge Mistake
A READER ASKS: I’ve always been a debt averse person and very conservative with my money. I don’t make a substantial income I grossed $57,000 in 2018 and support my children (1 year and 5 years) and my wife who is currently a stay at home ma, and a great one at that. When my wife and I were married in 2014 we made a joint bank account (added her to my account) and we share our income and expenses freely and equitably. Since then (with a few minor setbacks) we have been able to accumulate $10,000 in savings in our RBC e-savings account, its not much but it took…
How To Deal with Credit Card Debt
In theory, the process for paying off your credit card debt is rather simple: Review the annual interest rates on all of your credit cards. Focus your financial resources on paying off the credit card balance with the highest rate of interest while maintaining the minimum payments on your other credit card balances. Once the credit card balance with highest interest rate has been paid in full, repeat step 2 for the credit card balance with the next highest interest rate. Repeat this process until all your credit card balances are paid in full. What if you don’t have the financial resources to do this because your income is too…
Pay Off Your Debts Before Investing
Ever build one of those mortgage spreadsheets? Take your interest rate, the term of the mortgage, your payment, and plug it all into a spreadsheet to see how it amortizes over time? It’s a pretty good exercise. Here is the key step—open that spreadsheet and add up the interest you will pay over time, assuming you don’t make any prepayments. The answer will probably blow your head off. For example, on a $250,000 30-year 4% fixed rate mortgage, you will actually pay about $430,000 in total over the course of those 30 years. Every butthead reading this is like, “But you get to deduct that from your taxes!” I have…
The Collection and Debt Settlement Services Act: New Protection for Debtors
On January 1, 2015, the Collection Agencies Act (Ontario) was renamed the Collection and Debt Settlement Services Act (the “CDSSA”), and provisions were added that deal specifically with debt settlement services. Starting July 1, 2015, these new provisions and the regulation will, among other things, provide greater protection and remedies to Ontario consumers who obtain debt settlement services, whether the debt settlement is by installment payments or lump-sum. The new debt settlement protections will include the following: • any person performing debt settlement services (“DSC”) must register as a collection agency and comply with strict licensing requirements (e.g. must pass a written exam, requirement to operate from an actual physical…
Applying for a Home Trust Secured VISA to Rebuild Your Credit
Once a debtor has been discharged from bankruptcy, she can obtain a secured credit card to start rebuilding her credit. Contrary to popular belief, a debtor who has been discharged from bankruptcy doesn’t have to wait 7 years (the length a bankruptcy stays on a credit file) to re-establish her credit history. Immediately after her discharge, she can apply for and receive a secured credit card to start rebuilding her credit. This is how it works: Apply for a secured credit card. It is called a “secured” card because you’re required to provide a security deposit to the bank. Your credit limit will be equal to the amount of security…
