Trusted Licensed Insolvency Trustees in Vancouver and Surrey

When you have financial issues that you cannot resolve alone, it may be time to consider a consumer proposal or bankruptcy. How can you tell the difference, and which is right for you?

Crowe MacKay & Company's Licensed Insolvency Trustees in Vancouver and Surrey share what each means and how they can affect you. If you require assistance, contact our team in Vancouver and Surrey to start your debt relief journey.

Help for Financial Issues

There are some similarities between a consumer proposal and bankruptcy. They are both forms of relief from debt, and they both offer legal protection from creditors.

Both require a Licensed Insolvency Trustee (LIT), who is free to speak to, to weigh in their expertise. You can ask how the process works and ask their opinion on which option would be better for your situation. It is good to ask their opinion because, while there are similarities, there are significant differences, too.

Consumer Proposal vs. Bankruptcy: The Difference

A significant difference is how each will affect your assets. If you file a bankruptcy, you must surrender any non-exempt assets to the Trustee for the benefit of your creditors.

With a consumer proposal, however, your assets do not need to be surrendered. Instead, you will be making structured payments which will result in a greater rate of return to the creditors than they would receive in a bankruptcy.

Other important differences include the cost, the agreement’s duration, the impact on your credit score, and the minimum amount of debt required for each. Here is a specific breakdown of the requirements for each.

Consumer Proposal

Excluding your mortgage, you can only have a maximum of unsecured debt totalling $250,000. The cost for a consumer proposal is a negotiated settlement. It usually begins with approximately 20% of your debt, which is divided into monthly payments.

A Consumer Proposal cannot exceed five years. There is no penalty for an early completion. Also, there are no requirements for monthly reporting.

You keep your assets. The R7 rating will stay for three years on your credit after you complete it or six years after you file. It depends on which comes first.

Bankruptcy

To file for bankruptcy, the minimum requirement is $1,000 in unsecured debt. Under government regulations and based on your typical monthly income, there will be an assignment of monthly payments.

The duration is nine months or 21 months for a first time bankruptcy. A second bankruptcy is 24 months or 36 months. The duration is determined by your income and there is a monthly reporting obligation for your budget.

Further, with bankruptcy, you must surrender all non-exempt assets. Your credit will have an R9 rating for six years after the completion of the bankruptcy.

When to File a Consumer Proposal

While every situation is unique, it is important to weigh your options. A consumer proposal may be better for you but ask a LIT expert to help you make the right decision. Although, there are three reasons to choose a consumer proposal over bankruptcy.

With a consumer proposal, you can:

• keep your assets,
• make affordable monthly payments, and
• impact your credit rating less.

Working Toward Financial Freedom Together

With over 60 years of consumer proposal experience, trust the professionals at Crowe MacKay & Company to get you on the road to a debt-free life in Vancouver and Surrey.

Crowe MacKay & Company is ready to listen with compassion and respect. They have a commitment to you and will guide you to the financial freedom you deserve. Click here to contact Crowe MacKay & Company now.

This article has been published for general information. You should always contact your trusted advisor for specific guidance pertaining to your individual needs. This publication is not a substitute for obtaining personalized advice.

If you require corporate or personal Insolvency services, Crowe MacKay & Company provides custom solutions for clients, allowing them to live debt-free.

In Canada, part of the bankruptcy process requirements may include making payments for the benefit of the creditors. The Canadian government implements payment regulations known as surplus income standards. The concept behind surplus income standards is usually complex and challenging to understand, and that's where the importance of a Licensed Insolvency Trustee comes in.

Crowe MacKay & Company's Licensed Insolvency Trustees in Vancouver and Surrey explain what surplus income is and how surplus income standards benefit those undergoing bankruptcy. If you require assistance, contact our team in Vancouver and Surrey to start your debt relief journey.

What is Surplus Income?

Surplus income is one of the components of the Canadian bankruptcy process. It considers that debtors still need to afford a standard of living. When an individual or family earns a net income over a certain magnitude, surplus income payments are required during bankruptcy. Three main principles guide the structuring of the required payments:

• The more money you make, the more you will pay during bankruptcy.
• You can keep the portion of your income that reasonably covers “normal living expenses,” which is known as the Superintendent’s Standards.
• 50% of whatever you earn over the Superintendent’s Standards is required to be paid to the trustee for the benefit of your creditors.

For surplus income, your location within Vancouver or Surrey is not a factor, as the amounts determined by the Canadian government are a national standard.

Surplus Income Limits for 2023

Below mentioned are the surplus income limits set by the government for 2023: 

Family Size | Monthly Income Threshold

1                    $2,543

2                    $3,165

3                    $3,891

4                    $4,725

5                    $5,359

6                    $6,044

7+                  $6,729

How Are the Income Limits Set?

The limits of surplus income are set using the Bankruptcy and Insolvency Act. The needed considerations when setting the limits are as follows:

• How many dependents are there in the household?
• How much does the family unit earn in a month?
• To what extent are expenses eligible to be deducted for tax purposes?

Under the Bankruptcy and Insolvency Act, your monthly income won't always be consistent. If you are sick in a month, you will make less money than usual, and if you work overtime in a month, you make more. Since your income fluctuates, your surplus income is calculated each month to represent your monthly income accurately.

The Bankruptcy and Insolvency Act also considers non-discretionary expenses. These expenses could include medical bills, spousal and child support payments, child care expenses, and income tax payments. Once the deductions against your income are removed, your trustee will use the net income amount to decide your bankruptcy payment.

How Long Will You Have to Pay Surplus Income Payments?

After your first seven months of bankruptcy (or after 21 months if it's your second bankruptcy), the trustee will review your average income. Your bankruptcy will be extended for a year if your average income exceeds $200 over the government's prescribed limit.

• First time bankruptcy lasts for minimum of nine months. However, you will be bankrupt for 21 months if you are over the earnings limit.
• Second-time bankruptcy will last for a minimum of 24 months, but you will be bankrupt for 36 months if you are over the earnings limit.
• In a third bankruptcy situation, an application to court is required for your discharge. The court will decide how long you will be bankrupt (it will be for more than three years if there are excess earnings).

For insights into debt management, read How to Manage Debt through Financial Planning?

Require Assistance?

At Crowe MacKay & Company, we have over 60 years of experience and offer free initial consultations. If you have any questions regarding the information above, contact our office today and start your debt relief journey.

This article has been published for general information. You should always contact your trusted advisor for specific guidance pertaining to your individual needs. This publication is not a substitute for obtaining personalized advice.

If you require corporate or personal Insolvency services, Crowe MacKay & Company provides custom solutions for clients, allowing them to live debt-free.

Are you worried debt will affect your personal relationships? You are not alone. Debt is a major source of stress and tension in many relationships and can be a turnoff to potential partners.

In this article, Crowe MacKay & Company's Licensed Insolvency Trustees in Vancouver and Surrey explore how debt affects relationships, offering tips on how to manage it. If you require assistance with your debt, contact our team and start your journey toward financial freedom.

The Connection Between Debt and Relationships

A couple’s household finances often have a significant impact on relationship satisfaction. Money is a sensitive topic that can easily cause conflict and tension in a relationship. When one partner is struggling with debt, it can put a strain on the relationship and cause the other partner to feel overwhelmed or frustrated. As a result, couples can feel less satisfied with their relationship, communication can begin to breakdown, and, in some cases, couples could resort to divorce or separation.

Financial Infidelity

Debt can be a source of financial infidelity in relationships. One partner may hide their debt or spending habits from the other, which can lead to trust issues and further strain the relationship.

Different Financial Priorities

Debt can also highlight differences in financial priorities and values between partners. For example, one partner may prioritize paying off debt while the other wants to spend money on vacations or other luxuries. This can cause tension and conflict in the relationship.

The Impact of Debt on Your Personal Life

Debt doesn't just impact your relationships; it can also affect your personal life in several ways. Two of the most common ways our trusted licensed insolvency trustees see debt impacting your personal life are financial restraints and health concerns.

Limited Financial Freedom

Debt can limit your financial freedom and make it difficult to pursue your goals and dreams. For example, you may be unable to start a business or go back to school because of your debt.

Health Issues

Debt can cause mental health issues such as anxiety, depression, and stress. These issues can impact your personal life and make it difficult to enjoy activities and spend time with loved ones. Debt can also cause physical health issues such as insomnia, headaches, and high blood pressure. These issues can make it difficult to function on a daily basis.

6 Ways to Manage Debt and Improve Your Relationships

If you're struggling with debt, there are several things you can do to manage it and improve your relationships. Here are six tips from our trusted advisors:

1. Be Open and Honest

The first step to improving your relationships when facing debt is to be open and honest about your finances. Talk to your partner about your debt and financial goals, and work together to come up with a plan to manage it.

2. Prioritize Communication

Communication is key to managing debt and improving your relationships. Make time to talk about money regularly, and be open to compromise and discussion. Being on the same page financially with your partner is a key to a happier relationship.

3. Create a Budget

Schedule a time to sit down with your partner when you are both relaxed and focused and make a financial plan together. Creating a budget is essential to managing debt and improving your relationship. Make a list of all your expenses and income, and come up with a plan to allocate your money in a way that allows you to pay off debt while still meeting your other financial goals.

4. Seek Professional Help

If you're struggling to manage your debt on your own, seek professional help. A financial advisor or credit counselor can help you come up with a plan to manage your debt and improve your financial situation.

5. Be Patient

Managing debt and improving your relationship takes time and patience. It's important to be realistic about your goals and to celebrate small victories along the way.

6. Focus on the Positive

Finally, it is important to focus on the positive aspects of your relationship and your financial situation. Instead of dwelling on the negative, celebrate the things that you are doing well and work together to achieve your goals.

Taking Control of Your Finances and Relationships

Debt does not have to be a major source of stress and tension in your life. By prioritizing communication, creating a budget, seeking professional help, being patient, and focusing on the positive, you can effectively manage your finances and set yourself up for a healthy financial future.

Require Assistance?

At Crowe MacKay & Company, we have over 60 years of experience and offer free initial consultations. If you have any questions regarding the information above, contact our office today and start your debt relief journey.

This article has been published for general information. You should always contact your trusted advisor for specific guidance pertaining to your individual needs. This publication is not a substitute for obtaining personalized advice.

If you require corporate or personal Insolvency services, Crowe MacKay & Company provides custom solutions for clients, allowing them to live debt-free.

Compound interest is, in effect, paying interest on interest. In terms of investments, compound interest is great, but when it comes to debt, compounding interest is a huge set back.

Crowe MacKay & Company's Licensed Insolvency Trustees in Vancouver and Surrey share how compound interest can prolong your debt lifetime and your options to break free from additional compound interest charges. If you require assistance, contact our team in Vancouver and Surrey to start your debt relief journey.

What is Compound Interest?

Compound interest occurs when interest gets added to the principal balance owing and, if not paid in full by the next billing cycle, the interest rate is applied to the current full balance owing, which would include previous interest charges.

Simple Interest

Not all lenders charge compounding interest. Certain loans, such as mortgages, student loans, vehicle financing, and personal loans, charge simple interest. Simple interest is calculated using only the principal loan amount and does not include any compounding over time. Most revolving credit, such as credit cards and lines of credit, use the compounding interest method.

How Does Compound Interest Work?

Calculating the interest on your credit card debt can be complicated. If your credit card is not paid in full by the due date, interest is charged using the average daily balance method, which requires dividing your annual interest rate by the number of days in the year to give you the daily interest rate.

Let’s simplify this, imagine you have a credit card debt of $1,000, which has a 19% annual interest rate. If you were making payments of $30 per month, it would take you 4 years to pay off this debt. By the time this is paid off, you would have paid a total of $1,432.90, which means this debt cost you an extra $432.90 in interest.

How Compound Interest Affects Your Debt

Most often, people carry large debt loads for long-time periods. The interest you may be paying each year to maintain your current debt load will add up over time to equal several times more than your principal debt ever was.

The impact of compound interest on your debt repayment has a very real effect. Consider our example above. If there was no interest, at a rate of $30/month, the $1,000 would have been paid in full in 33 months; however, because of the compounding interest, it takes an extra 15 months to repay the full $1,000. This means that the decisions you make now to use credit can affect you for years if you are not making wise decisions.

Credit Card Debt - Making Minimum Debt Payments with Compound Interest

Another danger is falling into the trap of thinking you only need to make the minimum payment required. Minimum payments are designed to keep a debtor in good standing with the credit card company while not paying the card off in full. Doing this means you will be paying off your debt over a longer period of time and will incur a much higher interest charge.

If we once again use our example above but calculate using the minimum monthly payment, it would take a total of 10 years and 5 months to pay off the $1,000 debt and would end up costing $889.40 in interest. This is almost as much as the original debt amount was.

Utilize one of these calculators to analyze your personal situation

How You Can Break Free of the Impact of Compound Interest by Making a Consumer Proposal

It is very important that you weigh the cost of borrowing money over the benefits and time involved before you go into debt. But, what if you are already in debt and feeling trapped? A Consumer Proposal may be an option for you. A huge benefit of a Consumer Proposal is that once an agreement is made with your creditors, there is no interest. The monthly payments you make go 100% to paying off your debt.

Require Assistance?

If you are struggling with debts, compounding interest is likely costing you more and more each year. At Crowe MacKay & Company, we have over 60 years of experience and offer free initial consultations. If you require support, contact our office today and start your debt relief journey.

This article has been published for general information. You should always contact your trusted advisor for specific guidance pertaining to your individual needs. This publication is not a substitute for obtaining personalized advice.

If you require corporate or personal Insolvency services, Crowe MacKay & Company provides custom solutions for clients, allowing them to live debt-free.

It is that time of the year again, tax season. You may be weighing the decision of filing for bankruptcy or a proposal and wondering, what about my taxes? Is tax debt dischargeable by declaring bankruptcy or filing a proposal? Will I lose my government refunds?

Crowe MacKay & Company’s Licensed Insolvency Trustees in Vancouver and Surrey are here to help you understand the tax implications of filing for bankruptcy or a consumer proposal. If you require assistance, contact our team to start your debt relief journey.

It’s that time of the year, spring cleaning! While many people use this time of the year to clean up their house, yard, and diet, most overlook the need to do a financial clean up as well.

Crowe MacKay's Licensed Insolvency Trustees in Vancouver and Surrey are here to help, providing 6 simple steps for financial spring cleaning. If you require assistance, contact our team in Vancouver and Surrey to start your debt relief journey.

Crowe MacKay & Company's Licensed Insolvency Trustees in Vancouver and Surrey help Canadians understand how higher interest rates and inflation may impact their day-to-day budgeting. While rising costs affect how far your dollars will go, relief options are available.

Rising inflation and discussions of a recession in 2023 have more people in British Columbia concerned about dealing with increased interest rates. To combat inflation, on December 6, 2022, the Bank of Canada raised the policy interest rate, otherwise known as the Prime interest rate, by 0.5%. On January 25, 2023, another increase of 0.25% was implemented, making the current Prime interest rate for lending 6.70%.

How Prime Rates Impact Variable Interest Rates

The Prime interest rate has a direct impact on any credit with a variable interest rate, such as:

• Line of credit
• Personal or business loans
• Student loans
• Vehicle loans
• Mortgages

Variable interest rates fluctuate based on the Prime interest rate. Typically, loans also include an additional percentage which is added on by the lender. For example, a variable interest rate of “Prime plus 3” means you will be paying interest based on the current Prime rate plus an additional 3%. Currently, that would be 9.70% (Prime 6.70% plus 3%). However, variable interest rates change depending on the market, borrowers should be prepared for any increase or decrease they may see over time.

How Variable Interest Rates Can Impact You

The bottom line, the cost of borrowing money has increased dramatically over the last year, and the rising Prime rate is making servicing current variable debts costly. But, how is the rising interest affecting you personally?

Mortgage Debt

If you are a homeowner, ‘rate hikes’ may be of genuine concern to you. For those with variable rate mortgages with a fixed payment, this means when the interest rate increases, less of your payment is going toward the principal balance. In turn, paying off your mortgage will take even longer. If the interest rate increases to a point where the fixed payment is now only covering the interest and not paying down any of the principal, which is known as the trigger rate, the result is an unexpected increase to the fixed monthly payment. It is wise to review your payments and estimate your trigger rate.

For those with a variable rate mortgage with a variable payment amount, the size of the monthly payment fluctuates based on the Prime interest rate. When Prime increases, so do monthly payments. This way, you are always paying the same amount towards the Principal balance of the mortgage, but the rising interest rates increase your payment amount. It is important to know what you can afford to pay monthly. If you are reaching your maximum, it may be time to look into a fixed-rate mortgage.

Those with fixed-rate mortgages, however, are also affected by the increase in Prime interest rates when renewing their mortgage. For example, a 5-year fixed-rate mortgage in 2020 could be locked in for as low as 1.49%. However, if you are looking to renew your mortgage in February 2023, you’re looking at a rate of 4.28% to 6.34%. Once locked in at your new rate, you’re still possibly looking at a higher monthly payment amount or longer payment term.

Personal Loans

A variable interest rate on personal loans, including vehicle loans and student loans, has the same effect as it does on a mortgage. The increases to the Prime rate mean you’re paying more towards interest each month and less towards your principal balance. This means it will take you longer than originally expected to pay off the loan and cost more by the time you’re finished. Depending on your variable interest terms, it may be wise to look at locking into a fixed-rate loan. Fixed interest rates for a personal loan can vary from 5.4% to 47% depending on your credit score, security pledged, and other criteria set by the lending institution.

Investments

It is also important during times of rising interest rates to keep an eye on your investments. When interest rates are on the rise certain investments benefit such as savings accounts, GICs, and money market accounts. However, other investments such as stocks and bonds become more volatile. This can affect your retirement fund and emergency savings depending on how you have structured them. Many have found that they can no longer depend on these to be their safety net to balance out their debts.

Credit Cards

One of the few things not impacted by the increase of Prime is most credit cards. The majority of credit cards already have a higher fixed interest rate of 19.9% and the Prime rate does not change this. That being said, carrying a balance consistently on a credit card is costly and is a warning sign of financial troubles ahead. If you cannot pay off your credit card each month and continuously ‘need’ to use it to make ends meet, it is time to look at better options to fix your situation. A trusted Licensed Insolvency Trustee at Crowe MacKay & Company can help you manage your spending habits, book your free consultation today.

Managing Higher Interest Rates

It is important to realistically evaluate the impact current economic conditions have on your finances. You may look at your debt load currently and consider it ‘manageable.’ But, is there a light at the end of the tunnel or are you just servicing the debt each month and remaining in the same financial situation year after year?

If interest rates continue to rise, how close are you to reaching your breaking point? Maintaining a consistent debt load, even if you are servicing the debt, will not allow you to get ahead until you find a way to reduce or eliminate the debt. It’s time to explore your debt relief options and minimize the impact increasing interest rates have on your pocketbook.

Our professionals can review what options you have, including:

1. Consolidating your debts – what will one monthly payment and its interest cost you in the long run?
2. Debt management program – reduce or eliminate interest and structure payments.
3. Consumer Proposal or Division 1 Proposal – No interest and reduced structured payments.
4. Bankruptcy – is it the end? If this is your only option, learn how bankruptcy will impact you in the short and long term.

Our professionals at Crowe MacKay & Company Ltd. can assist you with weighing the pros and cons of each option along with the long-term impact your decision will have on your financial future. With the support of our Licensed Insolvency Trustees, a secure financial future is within your reach.

Require Assistance?

At Crowe MacKay & Company, we have over 60 years of experience and offer free initial consultations. If you have any questions regarding the information above, contact our office today and start your debt relief journey.

This article has been published for general information. You should always contact your trusted advisor for specific guidance pertaining to your individual needs. This publication is not a substitute for obtaining personalized advice.

If you require corporate or personal Insolvency services, Crowe MacKay & Company provides custom solutions for clients, allowing them to live debt-free.

Due to inflation and the rising cost of living, the Government of Canada has announced a one-time top-up benefit for low-income renters, providing $500 to qualifying individuals and families.

Crowe MacKay & Company's Licensed Insolvency Trustees share who is eligible and the application criteria to receive the $500 benefit.

Benefit Eligibility

The top-up program is for low-income renters with adjusted net incomes (i.e. net income from the T1 return adjusted for any universal child care benefit and registered disability savings plan amounts received or repaid) below $35,000 for families or $20,000 for individuals. Applicants must have paid at least 30% of their 2021 adjusted net income on rent in 2022.

In order to be eligible, applicants must confirm they:

• Filed their 2021 income tax return or statement of income
• Are at least 15 years of age as of December 1, 2022
• Are a resident of Canada in 2022 for tax purposes
• Have a principal residence* in Canada as of December 1, 2022
• Had 2021 adjusted family net income of:
  
  • $35,000 or less for families
  • $20,000 or less for individuals
• Paid 2022 eligible rent:
  
  • In the 2022 calendar year
  • For any qualifying principal residence in 2022
  • Equal to at least 30% of their 2021 adjusted family net income
    
    • Learn what is included as eligible rent

*Principal residence is where an individual normally lives and pays rent, such as a house, condominium, apartment, duplex, college or university residence, trailer, mobile home, or houseboat.

Confirming Eligibility & Applying

To determine if you are eligible for the one-time housing benefit, set up or utilize your My CRA Account or My Service Canada Account. Your account will show your eligibility status and allow you to submit an application.

Applications are open until Friday, March 31, 2023.

Access My CRA Account

Access My Service Canada Account

Require Assistance?

At Crowe MacKay & Company, we have over 60 years of experience and offer free initial consultations. If you have any questions regarding the information above, contact our office today and start your debt relief journey.

This article has been prepared for the general information of our clients. Please note that this publication should not be considered a substitute for personalized advice related to your situation.

Many people make resolutions for the New Year, which tend to last a couple of weeks and are then forgotten about. If your resolution is to find debt relief, start the New Year right by making a plan to erase your debt completely. Now is the time to take a serious look at your financial health and start exploring your options to lose those unnecessary debt ‘pounds.’ Whether you have been carrying this ‘weight’ for a long time or just packed it on recently, our team of Licensed Insolvency Trustees in Vancouver have the tools to help you shed it!

Questions to Ask to Help Relieve Debt

A good starting point for your debt relief journey in Vancouver is to look at your current debts vs. how quickly you’re paying back the principal amount i.e. the amount you originally agreed to pay back. Some questions to help you start this process include:

• How long will it take you to become debt-free at your current rate of repayment?
• How much is it costing you each month to maintain your debts?
• Are your monthly payments reducing your debt or are you solely paying the interest with your total debt remaining the same?

Try one of these calculators to help you better understand how quickly you’re paying back your debts.

Why is this an important first step? Take a look at the example below.

Credit Card Debt Example

A credit card’s basic interest rate is 19.9%. At the very least, your minimum payment will be:

1. A flat dollar amount, usually $10, plus any interest and fee, or
2. A percentage of your outstanding balance (typically 3%)

For this example, imagine you are carrying credit card debts that total $20,000 and are paying $600 a month. This is most likely the required minimum when the maximum credit is utilized. It will take you four years and one month to pay off your debt with this monthly payment. It will also cost you $9,355 in interest. These metrics do not include any additional charges you tack on those credit cards.

See a visual example of the above situation

With additional debts added onto your credit cards, it will take longer and cost more for you to become debt free. Not only this, but carrying a high volume of debt also means you are giving up the chance to save money, which in the short term affects your ability to take care of household costs, car maintenance, surprise expenses, and more. In the long term, your debt can hold you back from having a comfortable retirement and secure financial future. Your debt may even affect your relationships or employment advancement.

If you were able to save or even invest the same $600 each month, in four years, you would have more than $28,800 in the bank.

Utilize this calculator to help you manage your debt and saving goals.

Review Your Spending Habits

Next, take a look at your spending habits. Some key areas you can reflect on include:

1. Are you holding unnecessary expenses, such as a storage unit you’ve forgotten about completely?
2. Are there expenses you could minimize, such as the number of subscriptions you hold?
3. Do you overspend on conveniences, such as delivery over pick-up and even coffee on your commute to work?
4. Are you often emotionally spending or purchasing things on impulse?

These are all great starting points to help build a healthy monthly budget. But, if you’re deep in debt, this likely won’t help you realize the debt relief resolution you were hoping for in the New Year.

Deep in Debt – Your Debt Relief Options

To shed your heavy debt, you’re going to need to make some big changes, and it starts with asking for help.

Don’t be afraid to ask for assistance to get your debt under control. Our experienced Licensed Insolvency Trustees have over 60 years of experience. As a local Vancouver and Surrey business, and neighbor in your community, our team prioritizes one thing – you. We are ready to listen with compassion and respect to help you find a plan that works best for you. Some options our team may offer you could include:

• Debt consolidation – if your total debts are less than 40% of your net income.
• Debt management programs – reduce or stop interest while you pay your debts in full.
• Consumer proposal – a structured payment plan for a reduced amount agreed upon by your creditors.
• Division 1 Proposal – if your debts are more than $250,000 (excluding mortgage).
• Bankruptcy – if you can no longer repay your debts.

Can Filing for Bankruptcy Negatively Impact Me?

If filing for bankruptcy is the only solution for you, it’s not the worst-case scenario, living trapped in debt that gets heavier and heavier is. There are many misconceptions about bankruptcies, which may have been true 50 years ago but are no longer the case today. Our Licensed Insolvency Trustees are here to help you understand how each of these debt relief options will affect you now and in the future.

Start Your Debt Relief Journey in Vancouver Today

We understand it may be difficult to make this decision, and you may have some budgeting aches for a little while, but this too will go away. Each time you notice yourself getting financially stronger and more flexible, you are going to be thankful for making the choice to get financially healthy. The sooner you start the sooner you will get through this. Don’t waste another second, take advantage of our free consultations and start your debt relief journey today.

Let’s not end this year with a financial bomb!

No matter what you’re celebrating, the end of the year always seems to sneak up on us and comes with many forgotten-about expenses. Gifts, events, dinners, parties — how can you get through this season without breaking the bank?

Make a List Budget (& Check It Twice!)

First thing’s first — set a budget for yourself. How much can you spend? What funds have you saved during the year for this purpose? What part of your regular monthly budget could you cut down on in order to have a bit more spending this month?

Don’t have a monthly budget? Create yours now using this tool.

Once you've determined the amount of money available, you'll need to prioritize what you want those funds to be spent on. Is the majority for gifts? Events? Meals? Now you have a plan. Next is the hard part, you need to stick to your plan. One of the best ways to keep yourself accountable to your budget is to track expenses as you go to ensure you're not overspending. And once you have reached your spending limit, STOP! Do not put yourself into debt, these celebrations are meant to be enjoyed, not cost you your financial future.

Keep Your Money on Your Mind – check out some of these budgeting apps

Tap Into Your Inner Elf

When funds are low or non-existent you may need to be creative. Group gifts, homemade items, and social experiences may take a bit more time but can save a lot of money if you're willing to put in the effort. Hosting friends and family is costly, take the time to consider the expense before committing. Choose the time of your event accordingly – mealtimes will cost more so maybe a mid-afternoon tea or later evening cocktail gathering will help limit spending. Keep it simple. Don’t just try to come up with ideas, first check your cupboards to see what you already have in the house and make your plan around those items.

If you do decide to host friends and family, instead of preparing and supplying all the food on your own, why not share the cost? Potlucks are a great way to get together for a meal without one person breaking the bank. If potlucks aren't your thing, perhaps creating an “experience night”, such as a wine tasting with each person bringing their favorite bottle, can help limit your expenses as the host. Or try hosting a paint night, games night, trivia night, or baking competition with your friends. Many of these events can be planned at home with minimal costs, (the dollar store is your friend!). Also, remember the size of your event will affect the bottom line, determine a reasonable number of people, and don’t over invite.

Get on the Nice List in 2023

Don’t forget, these expenses come around each year, so start planning early. Set up an extra savings account that you contribute to each paycheque, and take the financial stress out of your 2023 holiday season. Remember, putting aside $25 each paycheque is much less painful than having to come up with $600 at the last minute!

If all these suggestions seem out of reach for you financially, or the stress of the season is becoming unbearable, we are here to help. Contact the professionals at Crowe MacKay & Company Ltd., to discuss how to create a financially secure new year!

The cost of living is on the rise and everyone is talking about one thing, inflation. With inflation at an all-time high, Crowe MacKay & Company’s insolvency experts share what it is, how you may be impacted, and provide solutions for those facing financial difficulties. If you require immediate assistance, our team is ready to help navigate you toward financial freedom, book a free initial consultation today.

What causes inflation?

Inflation happens when demand outweighs supply, which results in costs rising. For example, in Canada, the cost of groceries alone has increased by 10.28% as of September 2022. To counteract inflation, the Bank of Canada has been raising the prime interest rate.

What is the prime interest rate?

A prime rate or prime lending rate is an interest rate used by banks when lending to customers with good credit. Some variable interest rates may be expressed as a percentage above or below prime rate. You can expect the prime rate to impact the interest payments you make on your:

• Mortgage
• Line of credit
• Car loan
• Student loan

The prime rate is currently 5.95%, which is 3.5% higher than it was a year ago (2.45%, November 2021) and it is expected to rise again.*

Interest Payment Example

To put this into relatable terms, let us look at an example. The table linked below is how much interest you would pay each month on a $10,000 line of credit from November 2021 to October 2022. The borrowing rate is the prime rate plus any additional percentage determined by the credit lender**. In this example, the lender has added an additional 1% to the monthly interest payments.

** Loans can be the prime rate plus (or minus) any percentage determined by the lender. The lender will take into account conditions of the market, individual credit score, amount borrowed and assets, if any, available to be provided to the lender as security for its loan.

View monthly interest payment table

In short, in the past year, the monthly interest payments have more than doubled. This means that less of your payment is going toward the principal balance and thus extending the time you will be carrying this debt.

Struggling or unable to meet your financial obligations?

Inflation affects us all, whether we are financially secure or not. As said by Bank of Canada Governor Tiff Macklem, “high inflation feeds frustration and creates a sense of helplessness,” and if you are already struggling with debt this may be your breaking point – but you do have options.

Instead of feeling overwhelmed and frustrated, talk to a Crowe MacKay & Company advisor to help you take control of your finances. Many people are surprised to learn that there are several options for reducing debt and to avoid filing for bankruptcy, such as:

• debt consolidation,
• debt management programs, and
• Consumer Proposals.

Every situation is unique, so we recommend connecting with a Licensed Insolvency Trustee to help review all your options to ensure you have the best financial future possible.

At Crowe MacKay & Company, we have over 60 years of experience and offer free initial consultations. Contact our office today and start your debt relief journey.

This article has been published for general information. You should always contact your trusted advisor for specific guidance pertaining to your individual needs. This publication is not a substitute for obtaining personalized advice.

Vancouver debt professionals are at times met with surprises from clients who were unaware of the obligations they must meet during bankruptcy. If you declare bankruptcy, whether personal or corporate, certain obligations must be fulfilled to get discharged. If you or your business is struggling financially, filing for bankruptcy may be the best debt solution—but before you can make that decision, you first need to understand the main bankruptcy obligations.

Tuition costs, the price of books, and other school expenses are on the rise. It is no surprise that student debt is also increasing—and becoming unmanageable for many people. A significant number of Canadians finance their post-secondary education with government student loans such as British Columbia Student Aid, private loans from a bank, or both. They work hard at their studies but then find it impossible to get out from under student loans. If you are struggling to pay off loans, there are several options for student debt relief. Today we will look at two options: bankruptcy and consumer proposals.

All businesses experience financial challenges at one time or another. It is important to keep a close eye, as these normal challenges can quickly turn into financial hardship. There are obvious red flags that your business is experiencing trouble—and there are some warning signals that are less obvious. Here are some of the signs that your business should start to consider corporate restructuring for debt relief in BC.

After filing for bankruptcy, any garnishments against your salary will stop. Your wages are not affected by personal bankruptcy and you are entitled to collect your income while using the bankruptcy process to eliminate your debts. However, if your income exceeds a certain level, it is considered “surplus income” and you will be required to pay a portion of it during your bankruptcy for distribution to your creditors. It is important to understand how the surplus income rules work so you know what to expect if you declare bankruptcy.

Income tax debt should not be ignored. It can quickly become unmanageable. If you fall behind on payments, interest charges and penalties will be added to your debt. If you do not pay, the Canada Revenue Agency (“CRA”) has broad powers to collect what you owe. The CRA can garnish your wages, seize your assets, freeze your bank accounts, or set off amounts you owe from one year against your tax refund in another year. Unlike other creditors, the CRA can use its authority under the Income tax Act to collect from you without having to get a court order first. The CRA is powerful and notoriously difficult to negotiate with. The good news is that an insolvency trustee has options to help you deal with the CRA and get relief from your tax debt.

Vancouver businesses are struggling financially due to COVID-19. Debt and taxes are piling up. Rent is overdue. Payroll is late. Banks are calling in loans or refusing to provide further funds. If this sounds like your business, it’s time to take stock and get a plan in place to help your business survive. Corporate restructuring may be the best option—but is informal or formal restructuring what your company needs? Vancouver insolvency trustees can review your individual company’s circumstances and help you decide. Here are some of the basics to consider when deciding between informal and formal restructuring to deal with business debt.

COVID-19 has produced waves of financial distress for BC businesses, large and small. Many companies are struggling to rebound in the wake of COVID-19. As time goes on, government measures to ease the financial strain may not be enough to keep a business afloat. If your company is facing financial difficulties due to COVID-19, corporate restructuring can help your business survive.

COVID-19 has caused unprecedented financial hardship for Canadians. Business closures, employee lay-offs, and income loss due to illness have all skyrocketed in 2020. Some COVID-19 relief measures and government assistance programs are ending, making individuals even more vulnerable to financial trouble.

If your debt has become unmanageable, you need a solution. Personal bankruptcy is one way to get debt relief. But how do you know if you are eligible to file for bankruptcy, and what steps do you need to take to file for bankruptcy in BC? Vancouver bankruptcy consultants at Crowe MacKay & Company prepared this step-by-step guide to file for bankruptcy with the help of a Licensed Insolvency Trustee.

Debt can feel overwhelming. If you are having trouble paying credit card debt, payday loans, lines of credit, or personal loans, you may be wondering about options such as bankruptcy, a consolidation loan, or a consumer proposal. Vancouver debt solution professionals can review your financial situation to determine which of the many options is best for you. While bankruptcy can offer a fresh start if you are under a large amount of debt, it is typically used as a last resort due to the damage it causes to your credit rating and the possibility of losing assets. For many people, a consumer proposal is an ideal alternative to bankruptcy that helps eliminate consumer debt while offering some key advantages. Here is how a consumer proposal can help you resolve your debt.

The short answer is filing for personal bankruptcy will not directly affect your spouse or common-law partner. You are responsible for your own debts. There is a common misconception that when you file an assignment in bankruptcy and you are married or living in a common-law relationship, your spouse or common-law partner is automatically responsible for your debts. Often collection agents, when trying to collect from you, tell you that if you don’t pay they will contact and try to collect from your spouse or common-law partner. This is a collection agency scare tactic and as long as your debts are not co-signed, they can only go after you for your debts.

There are many myths related to bankruptcy where the biggest one is that you will lose everything you own. While there is some truth intermingled with the misconceptions, applying for bankruptcy has both benefits and temporary disadvantages. Doubting how bankruptcy will affect the future is a valid concern that many have. With the help of an experienced bankruptcy consultant, you can find out what bankruptcy is going to mean for your future.

Declaring bankruptcy is an extreme measure, but using it in the right way at the right time can save you money, give you peace of mind and help you get back on your feet financially. It allows businesses or individuals that are unable to pay their debts to settle their financial difficulties. 

One of the first questions that get asked regarding bankruptcy is “Will I lose everything?” People generally fear that a trustee will seize everything and sell it during such times.

Unfortunately, student loans are something that many people have to deal with, and they can keep you in debt for several years. If you’ve recently filed for bankruptcy, you may be left wondering what happens to the student loans you have yet to pay off. The laws vary depending on where you live, so we’re here to offer some clarity on the proceedings in Canada.

If you have a debt, whether small or big, you have to plan your finances to make your payments on time. Without proper management, you lose a major part of your paycheck clearing off credits. You end up borrowing fresh loans to pay off older ones. Managing your bills gets out of your control and you fall into a vicious trap. Crowe MacKay LLP offers debt solutions to clients in Vancouver and the surrounding area.

Have you unwittingly stepped onto the debt treadmill without realizing how fast it goes? Are you saddled with excessive obligations that are creating a financial crisis? In this situation, your first step is to consider debt solutions, such as a consumer proposal or a consolidation loan. This could potentially reduce your overall debt, or consolidate it under a single loan account. However, if your debt is too large, or your assets fall significantly short of your debt value, then you may have no other choice but to consider filing for personal bankruptcy.

Many people run into financial trouble at some point in their lives. Maybe you lost your job in an unstable economy or your debt grew more slowly over time until it became unmanageable. Whatever the case may be, you are not alone and you are not out of options. A Licensed Insolvency Trustee at Vancouver's Crowe MacKay & Company Ltd. can help you get your finances back on track.

A consumer proposal in Vancouver is an effective debt solution for those struggling to pay off the full amounts of the money they owe to creditors, in their currently allotted timeframe. As long as the debt accumulated is under $250,000 without including a mortgage from a primary home, individuals are eligible for this option. A consumer proposal can be customized to your financial situation and help you pay off your debt, either by making smaller payments than what you owe, giving you more time to pay it off, or both.

The most common question we are asked by debtors is how they can recover from their debts and rebuild their credit. Many people, even before meeting with a Licensed Insolvency Trustee, have had their credit ruined by missing payments or collection agencies. At Crowe Mackay & Company in Vancouver, we hope to provide you with the information you need to make smart decisions about your long term credit.

If your monthly debt payments are becoming difficult to manage, then you should consider debt consolidation as a possible solution. Consolidation can make debt easier to manage by combining all of your credit into one single loan. The loan will ideally have a lower interest rate and lower monthly payments than you pay on all of your debts separately. The licensed Vancouver insolvency trustees at Crowe MacKay & Company can help you figure out whether a debt consolidation loan is a good financial choice.

When faced with serious financial trouble, personal bankruptcy is one of the options you can pursue to help deal with your debt. Consult with a Licensed Insolvency Trustee at Crowe MacKay & Company to review the best debt solution in Vancouver for you.

As a debtor you have rights. A creditor may not use threatening, profane, intimidating or coercive language. They may not threaten to publish your failure to pay. This is harassment and harassment is not ok! A creditor is only allowed to contact you Monday to Saturday between 7am and 9pm, on Sunday’s between 1pm and 5pm and never on a statutory holiday.

What is it an LIT?
Licensed insolvency trustees are, in fact, the same roles previously referred to as trustees in bankruptcy. An estimated quarter of Canadians have relied on trustees or know someone who has when it comes to their financial trouble. A Vancouver insolvency trustee can help individuals in the area by explaining what their options are when facing debt, and reviewing what makes the most sense for their unique circumstances. Two of these options include filing for bankruptcy and filing a consumer proposal.

Upon hearing the word “budget” most people begin to frown. This is not surprising as budgeting can be an overwhelming task for some people, but it does not have to be! Preparing a household budget can be simple and exciting. Do not place added pressure on yourself by detailing every tiny expense; rather focus on creating a plan that is reasonable and easy to follow.

So you have prepared a budget, what now? How can you make your budget work? Unfortunately there is no magic formula to making your budget work, rather you need to be diligent in keeping an eye on your daily expenditures and stick to your plan. How you track your expenses is a personal decision and depends on what works best for you.

Your credit rating is a collection of information such as your employment history, details on your bank accounts, outstanding debts, loan payments, and whether or not you have declared bankruptcy or filed a consumer proposal and been discharged.

Unfortunately, it is not uncommon as a business to experience financial hardship. But if you can identify problems early, seeking the help of a business bankruptcy trustee in Vancouver may certainly help you rectify them:

1. Make a plan

Set reminders about when to pay bills to avoid risking late payment and high interest fees, ideally in order of which will rack up the most interest the longer you wait – usually your credit cards. Our Vancouver Licensed Insolvency Trustees can help.