Posts in Debt Management
7 Ways to Get More From Your Income Tax Refund

Hopefully you are one of the people who is fortunate enough to be getting a refund. While it may be tempting to spend your refund at the mall or splurge on some other consumer goods or a trip, we have 7 suggestions that will provide you with more bang for your buck.

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2017 Surplus Income Standards

The Government of Canada has set net monthly income thresholds for a person or family to maintain a minimal standard of living in Canada. Every dollar that a bankrupt family makes above this level is subject to a surplus income payment of 50% while a person remains bankrupt.

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Budgeting 101 – Part 5 of 5

Catastrophic expenses are those expenses that you have no reasonable expectation of knowing that they are coming and they have a material and negative impact on your finances to the extent that you cannot recover from the impact and, in fact, may not even be able to deal with the expense in the first place..

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Budgeting 101 – Part 4 of 5

Lumpy expenses, as I call them, are expenses that we know (or should know) are coming down the track and will have to be incurred but only happen once in a lifetime or only once every couple, few, 5, 10 or 15 years (or so). Lumpy expenses can cause significant stress if you have not prepared for them. 

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Financial Math - The 5% House Down-Payment

The reality is that owning a home can be the root of a myriad of problems, one of which is tied to the 5% down-payment. With mortgage insurance, you can buy a house with only a 5% down-payment.  Mortgage insurance is actually required whenever your down-payment is 20% or less of the purchase price.

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Will I Lose My Canada Child Benefit (CCB) If I File For Bankruptcy?

The short answer is no, you will not lose your Canada Child Benefit (CCB) if you decide to file personal bankruptcy. While your CCB will not be affected by bankruptcy, you are required to report your CCB when calculating and reporting your household income.  These monthly reports will determine whether or not you have “surplus income”, which in turn will impact how long you are in bankruptcy and how much you will be required to pay.

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Can A Person Have Savings During Bankruptcy?

Yes, you can accumulate savings during a personal bankruptcy or consumer proposal. During a personal bankruptcy provided you are paying your required surplus income payment, if applicable. You can save as much as your budget allows.

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What Assets Can New Brunswick Residents Keep In Bankruptcy?

When an individual files for personal bankruptcy they assign all of their assets to the trustee to be liquidated for the benefit of their unsecured creditors.  That means any assets that have equity above and beyond what is owed against them must be recovered by the trustee. If all or a portion of the asset is not exempt the bankrupt person generally has the option of keeping the asset by repurchasing it from the bankruptcy estate.

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Consumer Proposal vs. Credit Counselling?

With all of the choices facing financially distressed consumers, it’s important to compare your options. The following chart provides you with information to help you choose the debt repayment solution that best meets the needs of you and your family.  

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How Are Secured Debts Treated In Personal Bankruptcy or a Consumer Proposal?

When an individual files personal bankruptcy or a consumer proposal these loans are not always impacted and the assets can usually be kept as long as the loan payments are current and continue to be made in accordance with the credit agreement.

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Can I Declare Bankruptcy If I Live Outside of The Country?

Generally speaking, under the Bankruptcy & Insolvency Act, if you reside outside of the country you can still declare bankruptcy as long as you meet certain criteria. If you are a previous Canadian resident and are have debt issues you should contact Powell Associates Ltd. to determine if you meet the criteria to file personal bankruptcy or a consumer proposal in Canada.

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Using RRSPs to Pay Down Debt

If you are unable to keep up with your debt payments you should consult a Licensed Insolvency Trustee to discuss your options before cashing-in any of your investments.   Your investment savings may be exempt from seizure so you may be able to keep them if you file for personal bankruptcy or settle your debts through a consumer proposal.

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Banking Fees – Are You Paying Too Much?

Your bank account service fee plan should reflect your needs and monthly usage otherwise you may be paying more than you should. If you find that your bank account is always in overdraft could be an indication that you are headed for financial trouble.  Consider reaching out to a licensed professional to receive a financial assessment to review your debt restructuring options.

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My Bank Account Is Always In Overdraft

The interest charged by banks to those carrying an overdraft can range as high as 20% so it can be a very expensive form of credit. If you find that you are carrying an overdraft balance and running out of money between pay periods this can be an early warning sign of future financial difficulties.

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