Top Listeners' Questions on Dealing with Debt
 |
Top Listeners' Questions on Dealing with Debt (Part I) - Money Problems Radio Show |
| Originally aired on March 31, 2007. | |
Show Topic:
Every week on the show we invite our listeners to e-mail us with questions on dealing with debt and their own financial issues and concerns. On this week's show we take a sampling of the best listeners' questions from previous shows and ask our experts to weigh in with their best advice and suggestions on how to deal with the problems that are affecting the listeners. We touch on issues like bankruptcy, consumer proposals, alternatives to bankruptcy and other topics.
Guests:
Ted Michalos and Doug Hoyes joined us from the firm of Hoyes Michalos Trustees in Bankruptcy. They founded their firm in 1999 and have helped thousands of Canadians deal with their financial problems and get a "fresh start". They advocate the importance of having a "Plan" to deal with your debt issues.
Show Summary:
We started the show by discussing a consumer proposal, one of the best kept secrets in debt management options. It's essentially a deal between you and your creditors that allows you pay back a portion of your debts, administered by a licensed trustee in bankruptcy. The creditors stop calling and you are free of collection calls. We discussed what is and what is not included in a consumer proposal.
We had a question about what debts can be included in a bankruptcy. Doug advised that you can't pick and choose what debts are included in a bankruptcy proceeding, including money owed to friends and family.
We also discussed whether the house and vehicles are involved in a bankruptcy proceeding. Doug stressed the importance of meeting with a licensed trustee to discuss your situation. Ted said that if there is equity in a home, a consumer proposal may be a better option. Ted advised that in the province of Ontario, if you own a car worth $5,650 or less it will not be touched in a bankruptcy.
Then we went on to answer a question about credit reports. Ted defined credit agencies as for profit entities that serve as central processing centres for all the commercial lenders in the marketplace. They provide monthly reports to credit bureaus based on the transactions that their customers have. They report on whether you as a customer are making their payments. Each item has a rating, starting with "1", the best rating and increasing numerically if you don't make the payments.
Doug explained that your ability to borrow can be based on what is in your credit report. He said that if you are denied a consolidation loan or other financing, it may be time to call a credit counsellor or licensed trustee to discuss your circumstances.
We talked about the differences between a consumer proposal and a DMP or Debt Management Plan. Ted warned about a lot of companies that may be offering services that are not legitimate. Ensure that if you are working with a Debt Management agency you are dealing with a legitimate enterprise.
We talked about responsibility for debts as a result of marital separation or divorce. Doug said that if you have co-signed someone else's debts and they go bankrupt, you are now responsible for those debts; therefore, regardless of marital circumstance, if you co-signed you have an obligation to the debts.
Don't let your money problems overwhelm you, contact a licensed trustee in bankruptcy and arrange for a free consultation today - they have the answers to your questions on dealing with debt.