How to avoid going into debt over Christmas Holidays

Stop Collection Calls

With the holiday season fast approaching, many Canadians find themselves less excited about the Joys of Christmas and more anxious about the debt that follows into the New Year.  According to a 2013 article on, Canadians – on average – spent or planned to spend close to $1200.00 on Christmas, a slight increase from the previous year.  This year, Canadians are expected to spend nearly $1500.00, with the highest priced gifts on most wish lists averaging $711.00[1].

On average, Canadians owed just under $16,000 in personal debt after the 2013 holiday season. All of this amounts to greater stress during the holidays and – by nature – a less than Merry Christmas. There are many practical ways to save money and properly budget for the Christmas Holidays without turning into Scrooge.  Whether you are trying to avoid the massive credit card bills in January or finding a way to still enjoy the holidays in the midst of a consumer proposal or personal bankruptcy, here are a few tips to help you budget and save this Christmas Season.

Tip # 1: Search for Cash Flow  

One of the biggest hurdles many people face during the holidays is setting a budget for gifts. Most people often neglect setting aside a bit each month to put towards the holidays, and instead find themselves with an inflated budget leading into the New Year. If you find it tough to put some money aside each paycheque, consider bringing in a bit of extra money by sell old clothing, books or toys to stores like Once Upon a Child or Plato’s Closet – and even used book stores and pawn shops. While you might only get somewhere between 15% and 25% of what you originally spent on it, you’ll not only be creating additional cash flow, but providing an opportunity for those less fortunate – who often rely on these type of stores through the holidays – to enjoy the season as well.

Another option is to turn your points for gas or other retailer rewards cards into gift cards that can be used to purchase gifts when the big ticket sales are happening, such as Black Friday or Boxing Day. By simply saving your points from gas purchases or purchases at retailers with rewards cards throughout the year, you can prevent yourself from overspending during the holidays. You can often redeem them for restaurant gift cards, retail chains and online stores. Gas cards themselves make excellent stocking stuffers for university and college student.

 Tip # 2: Budget & Pay Cash

A recent Bank of Montreal survey shows that 57% of Canadians admitted to making impulsive purchases when holiday shopping.[2] If you want to avoid overspending during the holidays, make a budget and stick to it.

It is always good practice for those holiday shopping on a budget to plan your gifts ahead. By doing so, you can make note of your holiday expenditures and only spend what you have to. A good way to do this is to put the cash aside for each gift into envelopes with the name of each person you’re getting a gift for on the front. This way, you only spend what you need, and avoid additional purchases that can contribute towards credit card debt.

You can avoid many impulse and extra purchases at Christmas by sticking with your budget and not falling into trap of “Keeping up with Jones” Much of the need to increase spending during the holiday season has to do with the influence of social media and advertising. Keep in mind that retailers have an immense impact on what the holidays “should look like”, thus creating an environment of materialism driving consumers to get the newest and biggest fade that drives their bottom dollar.

With a specified budget in hand, you allow yourself to keep your eyes open for the best deal on the gifts you need.

At its roots, the holiday season is about giving and togetherness. The biggest thing you can do for someone during this stressful season is to just wish someone a happy holidays, and to be there to celebrate it with them. It’s often our love for our friends and family that makes us want to give them a memorable holiday. At Don Allen & Associates, we have a number of online budgeting tools to help you budget and keep out of debt.

If you find yourself with credit card debt following the holiday season, you should turn to a bankruptcy trustee to see what your options are. At Don Allen & Associates, we can guide you in the correct path to clearing your credit card debt, whether it is through bankruptcy or a consumer proposal. Contact us today for more information.

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How Can I Stop Debt Collection Calls?

Stop Collection Calls It’s no surprise to anyone that – whether you are in the midst of a financial crisis, or have had to miss or otherwise forgo a bill payment – debt collection calls only add on to the stress you’re already dealing with. The last thing you need is someone reminding you that you owe money, but nevertheless, a collection agency still has a job to do.

What you should be aware of are your rights, and collection regulations, if you find yourself being harassed by a collection agency. You should note that it is not the prerogative of a collection agency to inform you of your rights with regards to collections.

What is a Collection Agency allowed to do?

How a collection agency works is simple: your creditor does not feel that the amount owing warrants legal action, so they pass along your file to a collection agency. The collection agency will then send you a letter, which informs you of your debt owing, your creditor’s information, any other pertinent information, and above all, that they are now the company in which you will be dealing with to repay whatever is owed.

A collection agency can contact you regarding the debt(s) that you owe, and is allowed to use any means – given that they are reasonable – to get you to pay your debt. A reasonable means should not, in any way, be detrimental. An example of reasonable means would be assisting you in setting up a payment plan in which to pay off your debt.

What are Collection Agencies not allowed to do?

  • A collection agency cannot threaten you regarding your debt
  • A collection agency cannot charge you with something that has nothing to do with your debt
  • Collection agencies are not allowed to make abusive phone calls, which include bullying, harassing, foul language, or any other forms of verbal abuse.
  • Collection agencies cannot contact your employer without your written consent, with the exception of one call to confirm your employment
  • The hours a collection agency can contact you are as follows:
    • Sundays between 1PM and 5PM
    • Mondays through Saturdays between 7AM and 9PM
  • The hours a collection agency cannot contact you are as follows:
    • Any day of the week outside of the allowed hours listed above
    • Contact is not allowed on statutory holidays
  • Following the initial conversation with a collection agency, the collection agency cannot contact you more than 3 times per week.
  • A collection agency cannot give false, misleading or defaming information to any person, for any reason
  • Collection agencies cannot make legal recommendations to a creditor that would result in any court process without first notifying you of this intention

I Feel I Am Being Harassed – What Should I Do?

If you feel like you are being harassed, refer to the above list of what a collection agency cannot do. If they are in any violation of these rules, you can file a formal complaint. The official website for the Province of Ontario has all the information you’ll need in making a consumer complaint:

What Should I Do When I Receive A Collection Notice?

First and foremost, contact the collection agency right away. This helps you avoid further complications with collection agencies.

Your next step, with the initial call to the collection agency, is to make arrangements to pay. Collection agencies are 99.9% of the time more than willing to assist you with a payment plan.

If you’ve made a payment plan, or other arrangements to make payment(s), make these payments. The only sure-fire way of getting collection agencies to stop calling is to make your payments. One thing you should not do is arrange to make payments that you cannot make. This will only complicate issues further.

If you find yourself unable to make payments, then your next step should be to contact a Personal Insolvency Trustee. At Don Allen & Associates Inc, we can assist you with a number of options from consumer proposals or bankruptcy, and help you get your life back on track.

How to Survive Without Credit Cards – Part 2

Flight Without Credit Card Booking a Flight without a Credit Card

Filing for a Consumer Proposal or Bankruptcy can be a very intimidating process.  There are a lot of questions and concerns about managing without having Credit Cards.  Our previous blog discussed two questions that often arise regarding this, “How do I book a flight without a credit card?” and “How can I reserve a hotel without a credit card?”  The key to both situations is always plan ahead.  Reserving a flight can often times be easier than reserving a hotel without a credit card.  Here are a few keys to get you started.

Do Your Homework

West Jet Airlines

Although many airlines and websites require you to pay by credit card for a flight reservation there are still many other airlines that accommodate patrons who wish to pay by cash or debit.  Be sure to call around and do your research the same way you do when you are looking for a cheap flight.  For instance, in Toronto, one Canadian airline that is good to start with is West Jet.  Here is a look at their policy regarding booking from their website.

  1. When do I have to pay for my flight?
    WestJet requires payment at the time of booking. If you do not have a payment card, you can book your flight at one of our airport locations or at a travel agency.
  2. How can I pay for my flight?
    We accept American Express®, Discover® and Diners Club International® cards, MasterCard®, Visa®, Visa Debit®, and Universal Air Travel Plan (UATP). WestJet gift certificates purchased prior to October 1, 2009, may be redeemed* by calling 1-800-581-9499 or at a WestJet ticket counter. We also accept debit and Canadian cash at our Canadian airport locations, and U.S. cash at U.S. airport locations. For international airport locations, the accepted forms of payment vary. Please call us for information on a specific location.

As you can see the one significant detail regarding booking a flight with cash or debit is the need for you to do so at either an airport or travel agency.  Keep this in mind and again make sure you plan ahead.  It may mean a trip to the airport a few weeks prior to your trip in order to make sure you get the flight you desire.

Visit a Local Travel Agency

If getting to the airport is not an option because of distance or time restraints you can also look into booking a flight through a local travel agency.  For example, Flight Centre in Barrie offers a wide variety of options when booking a flight or travel package.  Some options include paying by cash or debit for the flight or buying gift cards to use towards flights in the future.  Also they offer an option of starting an account that you set aside money in to help with saving up for a vacation or flight that you can redeem when you have saved the needed funds.

No matter the situation you are facing, getting a handle on your debt is an important step and whether you are filing for bankruptcy or a consumer proposal, with proper budgeting and some planning ahead you can still enjoy vacations and travel without out the need of credit cards.

How to Survive Without Credit Cards – Part 1

Hotel without Credit Card Booking a Hotel without a Credit Card

Often when entering into a Bankruptcy or Consumer Proposal many people are concerned with how they can manage without the use of Credit Cards.  Two of the most common questions people face are, “How do I book a flight without a credit card?” and “How can I reserve a hotel without a credit card?” Although the process can sometimes be more complicated, it still is possible.  Here are some simple tips to keep in mind when facing this situation.

Plan ahead

When booking a hotel you will want to make sure you call ahead to the city or destination and see what hotels allow for debit or cash reservations.  When searching places to stay look for local, non-chain hotels or even bed and breakfasts as well as more common hotel franchises.

Prepare For Security Deposits

Make sure you also state that you will be paying by cash or debit and that you won’t have a credit card for a security deposit.  Some hotels will allow you to stay if you authorize a security withdrawal to cover incidentals, damage, or amenities like mini bar and pay-per-view.  This money will be refunded to you at check out, but be sure to check if there are any delays for refund as some hotels can hold deposits for several days.

Pay Upfront

Debit Credit Card Logos By paying for the stay upfront you ensure to the hotel manager that they will get the appropriate funds for the stay.  This is often a guarantee for hotels with credit cards.  An upfront payment on your room limits the risk and conveys a certain sense of responsibility and liability for the room. As well many debit cards now come with Visa and MasterCard logos making it easier to use debit as an alternative to credit.

Finally, remember to budget accordingly.  Make sure you set aside the appropriate amounts needed for the stay and still have extra finances and cash to cover your meals, gas and other travel expenses like souvenirs and attractions.  Preparation is the key to a great vacation.

Bankruptcy Court and What You Should Expect

Barrie Bankruptcy Court

Since filing for bankruptcy in Canada is a legal process, as outlined by the Bankruptcy and Insolvency Act (BIA), you may be required to appear in court. In Canada, the ability to exercise the bankruptcy process falls under the provincial Superior Court’s jurisdiction. You typically would attend a hearing in a Bankruptcy Court to appeal for a discharge.

In your first or second bankruptcy, you need to:

  • Complete all of the duties required for filing for bankruptcy as outlined by your trustee
  • And if no one opposes the discharge.

Throughout the process of filing for bankruptcy, you are bound to complete certain duties – which includes attending two sessions for credit counselling. Not completing these duties is a sure-fire way to wind up in court. To add insult to injury, if you don’t complete them, you will not only have to go to court, but offer up an explanation as to why they weren’t finished.

If you are eligible, you will be given a copy of the discharge papers by your trustee. However, if you do not qualify, your trustee will have to apply for a hearing with the court to review your discharge.

In Canada, there are four types of discharges: Automatic Discharge, Order of Absolute Discharge, Order of Conditional Discharge, and Order of Suspended Bankruptcy Discharge.

An Automatic Discharge will be appointed if you have completed all of your duties on time, and there were no objections to the discharge. No court hearing is required in this case.

An Order of Absolute Discharge will officially rid you of your debts that were incurred prior to filing for bankruptcy. Exceptions are taken into consideration under the BIA.

An Order of Conditional Discharge means you will be discharged of your debt provided you meet the conditions set by the court.

An Order of Suspended Bankruptcy Charge means the court has delayed the discharge until a set date. This is typically due to an opposition to the discharge on the grounds of a criminal investigation, or failure in completing any and all duties.

Don’t place all of your worries on the notion that your creditor will oppose your discharge. In fact, an opposition occurs less than 1 out of 100 bankruptcies filed in Canada. A creditor would really only oppose the discharge if they believe they can convince the court to require you to make extra payments, or perform extra duties – however, this is a rarity due to the fact that your duties are laid out in the BIA.

You should note that on your third bankruptcy (and fingers crossed you don’t come to that), you will not be eligible for an automatic discharge. You will now have to go to bankruptcy court for a discharge hearing in any of the other three categories.

If you have any questions regarding bankruptcy, debt or help handling your personal finances, give us a call toll free at 1-888-504-1511, or visit us on the web at

What is Your Role in Filing for Bankruptcy?

Filing For Bankruptcy Barrie If you have decided it’s time to throw in the towel by declaring bankruptcy, one way to make the process less stressful than it already is would be to educate yourself on your role in filing for bankruptcy. When you declare bankruptcy, you have set duties and responsibilities you must comply with in order to not commit any offenses under the Bankruptcy and Insolvency Act. If you commit an offense, you could not only face a hefty fine, but also imprisonment for upwards of five (5) years.

Start by handing over your assets to your bankruptcy trustee. You will also have to hand over all credit cards issued to you for cancellation. Your Trustee will also need to obtain all of the records relating to your affairs.

Compile a formal list of your liabilities and assets, which should include the names of your creditors, addresses, account numbers and debt amounts. You should also note any of your assets you have sold in the year leading up to your bankruptcy declaration, and any assets you have obtained as a gift in the last five year prior. Your Trustee will need the necessary information to file income tax returns, as well as a monthly income and expense statement. You are also required to report inheritances or lottery winnings to your Trustee.

Your Trustee will begin arranging meetings with your creditors, and you will be required to attend if you are called upon. You will also need to attend at least two counseling sessions, which are set up by your Trustee. If you have a change in address or telephone number during the time of your bankruptcy filing, you are required to inform your Trustee immediately.

While it all seems like an incredibly stressful process, you have to keep your head together. If you miss anything, make any mistakes or purposely leave something out of your bankruptcy claim, you can be convicted with a fine or jail time.

You are at risk of conviction if you fail to follow any and all of the requirements previously mentioned, as well as falsifying statements, hiding or destroying property / records, obtaining any kind of credit over $1000 in the time of your bankruptcy, falsely obtaining credit, engaging in any sort of trade or business without full disclosure to your Trustee, and refusing to answer questions truthfully during an examination under oath. These offenses carry fines and/or jail time, depending on their severity. Your Trustee is there to guide you through the process, so if you feel confused or overwhelmed; it always helps to just ask questions.

If you are considering filing for bankruptcy or would like to know some of your other bankruptcy alternatives, feel free to contact one of our four offices located in Toronto, Barrie, Collingwood and Owen Sound.

Understanding Consumer Proposals, A Bankruptcy Alternative

Consumer Proposals Barrie When someone falls into the scary pit of unmanageable debt, the first reach for help seems to automatically be to bankruptcy. Bankruptcy is rarely your best option and there are several other options that you can explore to avoid bankruptcy, including consumer proposals. Check out our Debt Options Calculator to compare your debt management options.

A consumer proposal is typically your best bankruptcy alternative and/or debt management option to help settle your debts. Understanding the process and procedure of a consumer proposal can be simple.

Discussing Your Debt

After discussing your budget and money problems, a trustee can help you determine a proper estimation of what you can afford to pay back to your lenders and appropriate timelines. We will customize your proposal to suit your financial abilities, in the end, paying back much less than your total owed.

Finalizing Your Consumer Proposal

Once we have determined on the appropriate numbers, a specialist will put together the documentation, have you sign it and then file it accordingly. Thankfully this will help put a stop to those annoying collection calls or even wage garnishments.

Consumer Proposal in the Hands of the Creditors

The documentation will then be sent off to your creditors for them to look over and approve. Once enough creditors approve the proposal holding 50% of your total owed, the consumer proposal is approved and moves forward. If this doesn’t happen right away we can work with you and your creditors to adjust the proposal where it is attainable and agreed upon by both parties.

Payments Are Made

You will then make the agreed upon payments to your trustee where they will distribute to your creditors accordingly.

To find out more details on Consumer Proposals and how we at Don Allen & Associates Inc. can help you!

Battling The Unexpected Personal Finance Problems

Battling Personal Finance Issues We’ve all been down this road before: something unexpected happens – maybe your car breaks down, or you need some special kind of medication – your insurance isn’t covering it all, and you’ve got to pay out of pocket. You’ve already smashed the piggy bank, and checked between the cushions but you’re just coming up empty. So how are you supposed to battle the unexpected? Until you find a way to predict the future, there’s a couple ways to get some quick money.

If you’ve ever walked around your city, chances are you’ve seen a Money Mart, or something similar that offers what seems to be an insane amount of money the moment you walk through the door. This option is called a payday loan, and your eyes don’t deceive you. Money Mart’s website notes that 99% of people who apply for a payday loan are almost instantly approved, and receive their money shortly following. All you need to apply: a pay stub, bank statement and blank cheque. Almost seems too good to be true, right? That’s because it is.

Before you even consider this option, research, research and then research some more. Where they get you with their enticing calls to action are the charges and interest rates.

Let’s put this in perspective: in Ontario, a loan amount can range from $120 to $1500, and you are charged around 20% for every $100 you borrow. So if you want to borrow $300 for a car repair, you’ll end up having to pay $363 at the end of your loan term – an ambiguous amount of time that is due on your next payday and can range anywhere from one week and 42 days.

So what if life gets in the way once more? What if you are unable to pay that $363 back on time? Like any other loan, you will be charged annual interest. So what is the annual interest on a payday loan in Ontario? 547.50%. No – you didn’t read that wrong…it is actually 547.50%! What if you miss your due date by two months? That’s 91.25% interest. That $300 you needed for your car payment is now almost $700! Many people fall into massive debt when it comes to payday loans, and this is mostly due to simply not knowing the interest rates or charges that come with the loan.

Unless you are incredibly diligent with your money, or are at your wits end and have exhausted all your options, it is always a good idea to avoid a payday loan. So how else can you get some money?

Budget: Do you really need a case of soda this week? Maybe you could skip on the new shirt for now. Ask yourself “do I really need this now?” before you make a purchase – at least until you’ve remedied your situation. Check out our Personal Budget Tool

Odd Jobs: Ask around for jobs you could do in your spare time, even if it’s just shovelling driveways or carrying boxes. Money is money at this point.

Borrow from family and friends: The people closest in your life are, more often than not, willing to help you. Swallow your pride and explain the situation. They’ll most likely be willing to help, so long as you pay them back.

Sell Things you don’t need: You know that old guitar you don’t play with anymore? That pile of video games you beat already? Sell them online! Use websites like eBay, Kijiji or Craigslist to make some money. Don’t sell yourself short, but keep in mind: the more reasonable the price, the faster someone is to buy it.

What You Should Know About Collection Agencies

Collection agencies are third parties that are hired by creditors to retrieve debt that is owed to them. There are several things you should know about these agencies and your rights. Being well informed is the first step to dealing with your debt in a responsible way.

We’ve put together an entire page on our website, dedicated to bringing you the knowledge needed to handle these collection agencies and what you should know moving forward with them.

Check out this information on our Collection Agencies Page.

Secrets of Plastic Debt: Finance Infographic

We came across a very interesting article that shed a lot of much needed light on a very dark section of our wallet, the Plastic Debt! We were stirred up by many of the points and wanted to share some with you in a unique way. Hope you enjoy some of our favourite points!

  • The host of Til Debt Do Us Part, Gail Vaz-Oxlade tells the couples that she counsels to try and live on only cash for one whole month, create a budget and record all purchases.
  • When someone pays with cash, our first thought is “They were not approved for credit.” We couple the fact that someone uses cash to poverty. As if they are scrounging to get enough money together to pay their bills.
  • When someone pays with credit, we assume they have all their financial ducks in a row. When in reality, they either are well educated on how to use credit properly, or they are driving themselves further into debt.
  • Now a days, our issue is that most of us don’t really know what our income is. Our credit gives us the illusion of a bloated income, although reality is we are sinking in debt.
  • In order to put together a manageable and accurate budget, it’s necessary to do a spending analysis. In order to complete this analysis and come up with an honest review, you will need to consult both your credit and banking statements to get a full picture of your spending. For instance, your actual grocery list might average a total of $200 a week, but you are spending additional funds on lunches while you’re out and a coffee every day on your way to work. By examining every spending habit, your able to give yourself a better idea as to how much you are spending and where is feasible to cut your spending if needed.
  • Many financial experts say the best way to tackle a manageable budget is to seriously consider your needs vs. your wants, and to continually pay off as much debt as possible. These experts include Ms. Vaz-Oxlade of Til Debt Do Us Part, Don Allen, trustee and owner of Don Allen & Associates, and Jeffery Schwartz, executive director of Consolidated Credit Counseling Services of Canada Inc.
  • Ms. Vaz Oxlade separates these into three categories, one being your “essentials needs”: debt repayment, savings, rent, transportation etc. The second being “nice to have needs” : clothing, addition food allowance. All extras fall into the third category. Although your income may be minimal or inconsistent, it is best to plan each budget a month in advance, to guarantee that  this month’s income will cover next month’s budget needs.
  • We know what you’re thinking, what about all those unexpected expenses that bust our budgets out of the water. It’s best to setup a fund for these expenses. This way when you need that new set of glasses, or a new part for your car, you can refer back to this fund. It may take awhile to build up this fund, but deposit whatever you can into it, whenever you can. Every penny adds up and every dollar counts. A good way to keep up with this, is to give yourself a challenge. Add a dollar every day to your emergency jar, or every time you come home, empty your pockets into the jar. Remember, this is your EMERGENCY fund, not your chocolate emergency fund.