With the recent headlines of 46% of Canadians being less than $200 away from financial insolvency, we thought today we would write about consumer proposals. More specifically, just what is a consumer proposal? That answer is actually fairly simple. Through the Bankruptcy and Insolvency Act (“Act”), a consumer proposal is an arrangement negotiated with your creditors, through a Licensed Insolvency Trustee (that’s us!). The Licensed Insolvency Trustee (L.I.T.) takes the role of consumer proposal administrator, and the process allows you to settle your debts for less than you owe, and avoid bankruptcy in the process. Consumer proposals cover most unsecured debts, including:
Unsecured lines of credit
Loans (bank, finance company, payday)
Personal loans from family, friends and others
Income tax debt
These debts are generally
all accepted under a consumer proposal. If
you have secured debts (like a financed/leased vehicle or a house mortgage),
they would not form part of your consumer proposal.
These secured creditors have to be dealt with directly.
At this point, I’m sure you’re asking “Why would I want to
file a consumer proposal and avoid bankruptcy though?”, and that would be a
great question to ask! There are
several advantages to applying for a consumer proposal:
You get to keep your assets (not so in
Once a proposal is accepted, your payments will
not increase (payments can increase in bankruptcy depending on your income and
The negative effect on your credit score is
generally not as bad as a bankruptcy
Professional accreditation can be lost claiming
bankruptcy, but retained using a consumer proposal (eg. Insurance brokers,
corporation directors, licensed real estate brokers)
Interest is frozen at the date of the proposal
You may still
sponsor a family member through the Canadian immigration process (may be
hampered if claiming bankruptcy)
It’s a legal process so you and your creditors
must follow strict rules
There are some great advantages listed here, and the legal protection the process offers helps alleviate your stress as well. Once you file a consumer proposal, most wage garnishments cease, and collection companies/creditors can no longer contact you for payment. Taking charge of your debt and stopping the constant phone calls from creditors can allow you to live with a whole lot less stress! The Act ensures your protection and ensures your repayment plan follows a strict and regulated process. The L.I.T. will go over your budget with you to ensure you can afford the payment going forward. From there, the L.I.T. will negotiate a settlement between you and your creditors. You make monthly payments over a term that is usually 5 years (though there is no penalty for paying off the proposal faster). You attend two credit counselling sessions as well, which teach budgeting and credit rebuilding. Once you make your final consumer proposal payment, your debts are eliminated.
You generally pay more to your creditors in a consumer proposal vs. bankruptcy, but the payments are spread out over a longer term. This usually results in a less stressful process, not only because the payments are spread out over a longer term (and remember, there is no interest), but also because you get to keep your assets. So if you’re one of the many Canadians struggling with debt, and are looking for a way out, a consumer proposal might be worth your while. If this sounds like something that might interest you, or you have questions about the process, contact us today! We’re here to help you, and we love seeing our people get a Freshstart.
Last post we looked at Flipp, a handy grocery shopping app that lets you price match with ease. This week, we are going to look at another app that can help you save money, and stay on budget every month. Having a budget is a great way to track your spending. Watching what you spend is the best and easiest way to making sure you are staying on budget, but what is the best way to actually monitor your cash flow? The truth is any way that works for you is a good way! If you like to keep your receipts, and enter them all manually on an excel spreadsheet because it works for you, then keep doing that. Some banks (like Tangerine), will actually break down your spending when you log in to your online banking. This is great for those visual learners who like to see graphs and diagrams of where there money is going. If you have a few bank accounts, or different credit cards, and are a visual person, than a budgeting app that helps you keep everything organized in one place may be what you need.
Suggested App: Mint.
Mint is a super handy app that keeps all your financial information in one spot. You can link credit cards to your profile, or different bank accounts if you have more than one. The app automatically splits up your spending into different categories, which are completely customizable, to show you exactly where your money is going each month. It does this all automatically, so once you set a transaction on how you want it to appear in the future, it will do so every time that purchase is made. You can also set up bill reminders and bill due alerts, so your phone will remind you anytime you have money due. The app will also notify you if you are getting low on funds, or any unusual spending is happening. Basically, you will always be “in the know”, when it comes to your finances!
The customizable nature of the app helps you reach your savings goals easier. Seeing all your ATM fees for other banks in one spot may help you reconsider where you withdraw money the next time. You might be great at taking money out only from your own ATM, but occasionally go over budget in other areas. Mint will tell you right away if you have gone over your budget in any category during the month. Mint tracks your savings each month as well, so you can watch those accounts grow. The visual interface makes everything easy to understand, and the application is easy to use. Not only is the app easy to use, but it is safe, made by the makers of Quickbooks and Turbotax. With all your sensitive data at stake, it’s nice to know the company is used to dealing with such important information all the time.
Mint offers all of this free of charge with no commitment, and the ability to delete your account at any time. If you are a visual person and you have not been able to find an easy budgeting companion, Mint may be for you!
Are there any other budgeting apps out there you like? How do you keep track every month? We would love hear from you about your money savings tips!
Today’s post is about something we all need to do quite often… Grocery Shop! We have a suggestion for a handy app that can make your shopping easy breezy, and some recommended stores to keep your bill as low as possible through price matching. Let’s feed our bellies and not our debt!
Suggested App: Flipp is the modern way of shopping the flyers from the newspaper. Rather than waiting all week and rooting through the newspaper, Flipp keeps track of all of them in a single spot. The free app makes it easy to choose your favourite stores as well, so these will show up at the top of your list. Not only does Flipp keep all these flyers in the same spot, you can actually make your shopping list by simply selecting the items you want on screen. The app creates a grocery list from the items you choose. When you’re done choosing all your items, the app also has many coupon options you can search as well. You can also search for coupons in your area very easily, you just need to enter your postal code to see what is on sale around you!
This app is perfect for stores that offer price matching as well. Some stores that offer price matching include Save on Foods, Walmart, and Superstore. As long as the store carries the same product, they will offer to match the price of any competitor. This is the perfect kind of opportunity to use Flipp! Make your list using the app, open the app for the cashier to see when you check out, and you will ensure you are getting the best deals from around town under one roof. To save yourself time at the register, place all the items you are planning on price-matching at the front, and let the cashier know your plans. Might as well save money and time, right?
To make everything even more convenient, the app will sync up with your rewards cards (Air Miles, Aeroplan, PC Optimum, etc.) as well. The app does nearly everything you could ever need grocery shopping.
Price matching is a great way to save money on your grocery bill, and Flipp is the perfect app to keep you organized enough to do it! There are other grocery apps out there, and we want to know which ones are you using? How about telling us your favourite ways to save money at the grocery store? The grocery store is where we will spend a lot of our hard-earned money, so anyway to keep the bill down can be a great help. We hope you will find Flipp, and price-matching handy, and can’t wait to hear from you about your money saving tricks at the grocery store!
The holidays are a wonderful time of year to spend time with friends and family, however they can still create a lot of stress when it comes to managing our money. There are holiday parties to attend, holiday gifts to purchase, holiday cards to send out, and our normal living expenses and bills to take care of on top of all that. So here at Doug Lee & Associates, we have come up with some handy holiday tips and tricks to keep your budget balanced this holiday season. Here are our tips and tricks to ringing in a “balanced” new year:
Embrace the digital age. Why not email a nice holiday picture or “e-card” to friends and family, rather than printing things off and physically mailing them? This can be especially helpful if you have a long contact list for cards. If Grandma and Grandpa still check their mailbox when you ask them if they got your email, maybe send them a physical card, and save your digital version for family and friends that can appreciate it. You might not get rid of that entire mailing list, but surely you can save some money and time going digital rather than relying on the post.
Talk with friends and family about a spending limit. Most of us love to open a present; however most of us are just happy to have the time to spend with friends and family over the holidays. So why not cap the spending on each other, and focus on the time together instead? Set a small dollar limit that everyone can participate in and make sure everyone agrees to stick to it. This way, everyone knows what to expect from each other, and no one needs to stress about “not spending enough”. Besides, we’re all gathering for the food anyway, right?
Speaking of the food… Potluck Dinner! Why not have everyone coming for the big feast bring their favourite dish? This helps spread the cost around and also gives everyone a chance to try some food they may not have otherwise. The key to this plan is co-ordinating everyone and making sure everyone is bringing something different. You don’t want to end up with 5 trays of devilled eggs!
Find the free entertainment. We have all become accustomed to the movie theatre and various other entertainment options being open on Christmas Day, but this doesn’t mean we need to go. Find the street in your city that is best known for Christmas lights and take the family with a thermos full of hot chocolate. Or do a quick google search of free activities in your city that day to see what’s going on around you. If it’s too wet (or snowy of course) dig into that cupboard with all the board games and challenge the family to a friendly game (or an incredibly competitive game if that’s how your family rolls). Whatever your family finds the most fun!
Plan ahead as much as possible. This might be a bit late for this year, but good to note for next year. If you have to travel through the holidays, planning and buying your tickets ahead of time can save money and stress. You can also set aside a few bucks in your budget each time you get paid throughout the year, so that you have your holiday money ready when it’s time to spend. After using our first 4 tips, and keeping tip 5 in mind for next year, you will be a holiday budgeting machine in no time!
Those are our 5 money saving tips for the holiday season. Keeping budgeting tips and tricks in mind can help make your holiday a stress-free and joyous occasion, the way it was supposed to be! We all deserve to ring in the New Year full of confidence and excitement, and a balanced budget after the holiday season is a great step towards this.
How do you keep your budget in line over the holidays? What budgeting tips do you have that you have found success with? We want to hear from you! Share your money tracking ways with us, we love to hear how you save your money, and we’d love to share your tips with our community.