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: http://www.ontario.ca/consumers/filing-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.

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.

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.

 

Change your routine and SAVE DOLLARS

We look briefly at three of many ways to reduce your costs and save…

We all know that eating out is costly, but lots of us still do not make our lunch and take it to work. Buying lunch at work and eating out frequently at night, including drinks, can add up to hundreds of dollars per month. So change your routine. Make enough lunches for the week on the weekend and drink more water at meals and you will save lots of money.

Coupons – Although couponing is not as active in Canada as it is in the U.S.A., you can still save between 10% and 30% or thousands of dollars a year for a family. How often have we experienced free savings being sent to our door and we fail to take advantage of them. For example, a fast food coupon dropped off we might tend to throw out, convincing ourselves it is not healthy or we won’t use it. Yet, we find ourselves there in the next week or two and without the coupon to use. Take advantage of them by reviewing the flyers dropped off at your door. Sign up for coupons directly from manufacturers. Create meal plans based on coupons available. There are websites devoted to couponing which can point you to further sources (eg. GroceryAlerts.ca; Flyerland.ca; Save.ca).

Look for the cheapest gas even if you have to go a little out of your way to get it (if the extra distance makes sense). Carpooling can save you hundreds of dollars a year by sharing the drive to work with someone else.

Cars and Increasing Debt

The average Canadian non-mortgage debt reached $26,211 this year, the highest level since 2004 and 2.4% higher than a year ago. A large portion of this increase was an increase in car loan debt, which is up 13.2% over a year ago. Credit card debt and lines of credit remained virtually unchanged.

Canadians are continuing to take on debt faster than incomes are growing. Disposable income grew at an annual rate of 2.3% in May but households are taking on debts at a rate of increase of 5.7%.

Household debt is at a record high of 150% of GDP, which is higher than in the USA.  People are thinking that low interest rates will continue to be with us for a while and therefore they are getting more into debt.

The Bank of Canada has done some studies and estimates that “highly indebted” households (those that spend 40% or more of income on servicing debt) could rise to 10% in 2016 from 6% in 2011 if interest rates reach 4.25%.

In addition to the cost of buying a car, there is the maintenance, insurance and ever increasing gas cost. A 2006 study estimated the average vehicle costs $8,003 per year to own and operate – $3,421 for purchasing costs, $2,227 for gas and oil and $2,355 in other vehicle-related costs. Other studies have estimated that the gas, maintenance, license, registration, loan finance and depreciation for a small sedan model is $.50 per mile if you average 10,000 miles, $.41 if 15,000 miles and $.37 if 20,000 miles. This does not include parking costs.

Consider reducing your costs of this expensive asset by; taking more public transportation, car pooling, alternate driving with friends, drive as small and fuel efficient 4 cylinder car as possible, ride a bike or walk more for errands and consolidate your trips.

Learning to Live Off CASH

Learning to live off cash, without credit cards, can be a challenge initially if you have been used to living with the help of credit cards.  We help all of the people we see with budgeting, to show them how to budget and live off cash, without the use of any credit cards.

First, buy a small notebook to use as your spending journal. To really understand where you have been spending, you have to go back over at least the last 6 months of bank statements and credit card bills to see what you have been doing with your money. You need to know this to change your behaviour and cut your spending. Come up with average weekly amounts spent in each major category of expenses.

Get your last year’s tax return or assessment or your most recent pay stub and calculate the average monthly net take home pay you are making.

Summarize your expenditures under the major expense categories eg. Food/Personal Care, Transportation, Rent, Utilities, Entertainment/Gifts; Clothing and Other. You will have to adjust the numbers you have been spending to match the net income received.

For unexpected emergencies, you need to set aside a small amount whenever you can to contribute toward these. Take the change out of your pocket each day and put it aside to deposit weekly into this savings account so it will build up and be available when needed. Automatic pay deductions of 5 or 10% off each pay directly deposited into this account are good and you will learn to live without this money until the emergency.

Take clean jars and some envelopes and label them for the expense categories above.  Load each jar with what you determine is a week’s worth of cash for each expense category. When you go out to spend, take what you need in the appropriate envelopes. Then, it is very important to keep receipts and record in your notebook what you spent on the same day you spent it so you will remember accurately.  Review this each week to ensure you are staying on track.

Doing this will become easier and will give you amazing peace of mind, not having to deal with the stress of credit card bills and hounding creditors.