by Angela Marquis

Going through a divorce, change of career, losing a love one or moving your place of residence are all stressful situations both emotional and financially. Any or all of these reasons, could contribute to confusion or misunderstanding regarding debts.

If you are not sure whom you owe, the first step is to get copies of your credit report. There are two major credit reporting agencies: Equifax and TransUnion. Read the report carefully to see who you owe, account number, contact information for the creditor, outstanding balance and a nine point scale indicating whether a payment was made on time or late.

The nine point scale is as follows:
R0 Too new to rate; approved but not used.
R1 Pays (or paid) within 30 days of billing; pays account as agreed.
R2 Pays (or paid) in more than 30 days, but not more than 60 days, or one payment past due.
R3 Pays (or paid) in more than 60 days, but not more than 90 days, or two payments past due.
R4 Pays (or paid) in more than 90 days, but not more than 120 days, or three or more payments past due.
R5 Account is at least 120 days overdue, but is not yet rated 9.
R6 (Code 6 does not exist.)
R7 Making regular payments under a consolidation order or similar arrangement.
R8 Repossession (indicate if it is a voluntary return of merchandise by the consumer).
R9 Bad debt; placed for collection; skip.

All credit reports contain different information and keep in mind, just because a debt isn’t on the report, doesn’t mean you don’t owe them, as it just means the creditor did not report it or the debt was removed from the creditors report, usually after six years.

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do I need to have a fulltime job in order to consolidate credit card debt due to family death unable to pay credit cards

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Canadians now owe an average of $1.48 for every dollar they earn. Consumer debt levels have hit a new high, in large part due to a drop in disposable income. Does this sound familiar?
My wages are being garnished to pay for my outstanding debts.
I am afraid to answer the phone because it may be a bill collector calling.
My creditors are threatening to sue me, repossess my personal property, or hire a collection agency to recover their money.
I have been borrowing money for household expenses from friends and family to make it from one pay cheque to the next.
I am paying one creditor one month and another one the next because I don’t have enough money to pay them both.
My financial problems are affecting my health, my job, and/or my marriage.
I am going over my spending limit or using credit cards as a necessity, instead of a convenience.
I am only making the minimum payment on my credit card balances.
I use overdraft almost every month.
At least one utility company cut off service because of my outstanding bills.
I spend 15% or more of my take-home pay on loans and credit card debt payments.
I am paying overly high interest or service charges because I don’t pay my bills on time.
If you agree with one or more of these statements you should consider making your New Year’s Resolution to make a fresh start. Call and book an appointment for a no cost, no obligation meeting to discuss your options and come up with a plan that is best for you and your goals.

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Joint or cosigned debts include any of your debts for which your spouse, or anyone else for that matter, has signed the original contract, loan agreement or credit card application. If your spouse has cosigned your debt or requested a credit card, they will be responsible to repay the debt. Unless differently agreed with the lender, the amount owed by your spouse will be the full amount of the debt, not just 50% or some other portion you may feel is justified.

For some credit cards, the terms may state that authorized users (secondary cardholders) can also be held responsible for any outstanding balances, even if they don’t sign the credit card application. Read the credit agreement carefully and make sure that you fully understand who is responsible. If you aren’t sure, ask the lender.

Your spouse will continue to be jointly liable for a loan, credit card or other joint debt in bankruptcy or a consumer proposal
unless otherwise specifically agreed to by the financial institution or credit card issuer. Therefore, it is important to obtain written confirmation of any agreement.

Your marriage or living relationship alone does not make your spouse or partner responsible for your debts.
However, if you are jointly liable for a debt, a separation or divorce agreement between you and your spouse does not legally bind the financial institution or creditor. This is only an agreement between the two of you. You must obtain written agreement from the creditor that the debt has been split or re-assigned to one of you.

Joint debts can be confusing. It you would like to review your debts and options, please contact me at 310-PLAN.

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Every day I meet with clients whom have asked “How do I teach my children to manage
Their money?” It all begins with the GOLDEN RULE. The GOLDEN RULE is to pay ourselves first.

How we teach our kids about the GOLDEN RULE is of course to lead by example. I am a firm believer in tracking every penny that goes out of the pocket. Write down every penny you spend for a solid three months. That includes money going to child A, B or C. That way we are aware of where exactly our money is going. You will be shocked to see how much money you are handing over to your children for hot dog or pizza days at school. This can all be very costly on our budgets. This is why children have the magical thinking that money grows on trees.

Our job as parents is to teach our children the realities of life. Children usually have a sense of what money can do for them at about 5 or 6 years of age. A 5 year old would get $5 per week and $1 would go directly into the piggy bank. A child would get a $1 per year of their age for a weekly allowance. Therefore a 6 year old would get $6 per week and $2 would go into the piggy bank.

The GOLDEN RULE is to always pay yourself first. This money is a great investment in their future for college or university. Their wants and needs cost more as they grow older. Teenagers want to go to the movies, go bowling or go shopping which all adds up. The question to ask is do you have enough money in your budget to do all of those things? Or should you wait and save? Teenagers soon find they want more money and the only way to get more is to get a job.

These are very tough economic times and if you are having a difficult time maintaining your budget , please call 310-PLAN for a no cost, no obligation meeting.

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I am a big believer in keeping track of where you spend your money, because if you don’t keep track of where you spend, it’s very easy to spend more than you have.

Every day I meet with people in Windsor who are worried about preparing a budget, and I give them all the same advice: You must go into the budgeting process with a POSITIVE ATTITUDE. Don’t think about the negative aspects of making a budget; concentrate on the rewards.

You may be able to pay down your debt or save for retirement. Your budget is the tool for you to reach your goals.

STAYING MOTIVATED happens over time and becomes routine. Staying motivated is hard no matter if your goals are to keep physically fit or financially fit. You may consider rewarding yourself or raising the bar a little higher and save more.

Finally you need to have REALISTIC GOALS. It is always best to choose short term goals such as paying off a bill or saving for a vacation. Attaining short term goals helps to build and maintain your motivation. Try these budgeting basics that work:

1. Write down every time a penny goes out of your pocket. Yes, every single penny. It really does add up. Do this for three solid months. Tracking your spending behavior actually works. You can’t change it if you don’t see it.

2. Add these numbers up and put them into your monthly budget along with your fixed monthly bills.

3. Ask yourself if you are happy with where your money is going or is there a yes with a condition? ie: Spending $60 a month at the coffee shop is making them rich. Try spending $30/month and putting the other $30/month in a separate savings account with no attached debit card access.

You may find your debts unmanageable and feel that you are getting nowhere fast. A consumer proposal will give you the fresh start you need. Please call me at 310-PLAN or email me to book a no cost, no obligation meeting.

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Yes, I do realize the holidays are over, but now is the time to start planning for 2010. One of the most important things a person can do is to set a budget. Not just for gifts, but for everything. Our phone lines are quite busy in January as people start to receive their holiday credit card bills and are shocked to discover how much money they spent.

So here is the plan. Set a limit on how much you are going to spend and then set aside money each month in advance. For example, if you are planning on spending $500 on gifts, set aside $42 each money. If you start doing this in January, you will already have the $500 set aside. It is a lot easier to save a little bit each month than to try to come up with a large amount all at once.

I realize that many people have debt they can’t manage and that is where we can help. Sometimes bankruptcy or a consumer proposal is the best way to get a fresh start.

If you have having difficulty managing your debt, call us at 310-PLAN.

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I hate to be the bearer of bad news, but September was a record month for filings for our fim in Windsor.

The first reason is obvious to anyone living in Windsor. Companies are reducing their work forces or shutting down. This in turn leads to lower incomes for those who worked at the company, and will also have an effect on the people who serviced those companies. It can cause hardship on everyone from the suppliers to the coffee shop across the street from the company.

The other reason for the record filings was the changes the government made to the Bankruptcy and Insolvency Act. If someone was thinking about filing for bankruptcy a month or so ago and realized that filing after September 18, 2009 might cost them more money, many of them decided to file before the rule change.

If you think you may need to file for bankruptcy, call me at 310-PLAN or email me.

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IF I AM ALREADY BANKRUPT CAN I BE ELIGIBLE FOR A CONSUMER PROPOSAL?

Yes a consumer proposal can be filed be someone in bankruptcy. In fact it is quite common for someone who after filing bankruptcy has an increase in income or a windfall.

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When faced with numerous loan payments and credit cards bills each month, the first step for many people is to find out if they can obtain a debt consolidation loan. The debtor (the person who owes the money) will go to his or her bank and apply for the loan. If the debtor qualifies, the bank will then give a loan and pay off the other credit card and loans. Once you receive the loan from your bank, if the bank doesn’t cut up your credit cards, you need to make sure you do it yourself. If you currently don’t have a source of income, it is unlikely you will be able to obtain a loan.

The main advantage of a debt consolidation loan is that it takes all of your debt and combines it into one monthly payment. Your new loan payment should be less than the minimum payments you were paying on your credit cards and loans. If it is not a lower monthly payment, this might not be the best option for you.

Another factor to consider will be the interest rate you will be charged. Most credit cards have interest rates between 10% and as high as 28% per year. The interest rate charged on the loan should be lower than you are paying now.

You will also need to consider any other terms the bank has. Do they want to put a lien on your car, or do they need a cosignor? If they do, you need to consider the risk to your car and the cosignor if you are unable to pay the loan in the future.

If you are able to make a monthly payment, but you don’t qualify for a debt consolidation loan, a consumer proposal might be a better option for you. You can call me at 310-PLAN or email me to discuss this option in more detail.

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