In debt – how do you know where to get help?

The Alberta Debt Crisis: Making the trusted choice for consumer debt relief

Debt. We’re all in it, and the issue only seems to be getting worse – especially for Albertans. Alberta holds the highest consumer debt in Canada, nearly $50,000 more than the national average.  The oil and gas rich province continues to see growing job losses which only adds to the increasing consumer debt  – so how do you know where to turn to for help?

Credit counseling, debt consolidation, consumer proposals, bankruptcy – these are all terms that have been tossed around and advertised to us, but what do they mean to an indebted consumer? What options are best for your situation?  Who can you trust to handle your finances and bring you out of the red zone?

Consolidation loans

Often times the first method people consider is a consolidation loan, whether from a bank or other lender. The great part about a consolidation loan is the lumping of all of your debt into one new revised payment. On the downside, this revised payment is 100% of the debt owing wit interest. While a new payment is tempting, often times there can be many extra steps in qualifying for a consolidation loan and the new payments may not be all that much more affordable.

Credit Counselling

Before determining what options are best suited for you, you need to understand the debt relief landscape and who the players are. Credit counsellors have become more prominent over the last decade, mainly fueled by debtors’ desires to avoid the big bad “B” word – bankruptcy. Toted as a non-profit agency, credit counsellors require you to make regular payments to them under a debt repayment plan, and they in turn make payments to your creditors, while holding back a certain percent of your payments for their fees.

Often when consumers are choosing to eliminate their debt by way of credit counseling, they are choosing one of the most expensive methods available.  When choosing credit counseling the consumer must pay 100 percent of the outstanding balance, pay fees to the credit counseling agency, and may have to pay interest on their debts included in credit counseling.

Consumer Proposal

An alternative to credit counsellors is the more trusted and trained option of licensed trustees who are regulated by the Office of the Superintendent of Bankruptcy, typically have their accounting designation, and have been through rigorous training in bankruptcy and law.  Operating under a Code of Ethics, trustees tailor their debt solution approach to each consumer’s situation, and assist debtors into filing a bankruptcy, or the more preferred option – a consumer proposal.

A debt relief method that has become increasingly popular over the last few years (increasing 53% in Alberta from 2013-2014) is consumer proposals. Consumer proposals are attractive to people all across Canada because they allow a debtor to consolidate all of their debts into a fair proposal to their creditors to pay back all, or a portion, of the debt owing under new terms. It allows for debt consolidation, interest free terms, and flexible payback periods and allows the debtor to keep ownership of assets – your home, vehicle, tools of your trade, or potential inheritances are all protected.

Licensed trustees are the only professionals who are able to administer a consumer proposal.

As the debt landscape in Alberta continues to worsen, consumers need to be aware and informed of their options for debt relief

…and the tax man cometh

Every year, without fail, just like snow and temperatures will eventually fall in the winter, mosquitoes will pester us in the summer… every April, the tax man comes. With the deadline for Canadians to pay their personal taxes (by April 30) lets explore the issue of when you OWE money to CRA (Canada Revenue Agency).

Currently we (the trustees at Grant Thornton) are seeing about 50% of our clientele dealing with with some amount of tax debt that is owed to the CRA . While this may seem like a relatively high number, tax debt is not unusual.

One of the major trends we continue to see is people not filing their taxes for fear of owing money – this is not only a mistake, but failing to file your taxes does not get you out of paying the taxes for the year, if you owe, it can actually lead to larger amounts being owed through fines and penalties. We have seen tax debt to the extent where 50% of the amount owed is a build up of fines, interest and penalties over multiple years.

Here are the most common reasons people fall behind on paying (or filing) their taxes:

  • High costs from relationship breakdown – separation or divorce has caused people to incur costs associated with legal bills and support payments, distracting them from focusing on tax filing and remittance requirements
  • Lack of knowledge – this is more common among self-employed people that have been making good money in their respective trade. Often these people may fail to recognize the need to maintain compliance with CRA – they often put aside the matter until it’s too late, or underestimate the amount they need to set aside to pay tax which ends up causing them trouble. Some small business owners simply do not know what is required and have been soo busy working on the profit side of their business, they neglect to care for the compliance side.
  • Procrastination – some people are born procrastinators and just put off dealing with their taxes until they have completely forgotten about them all together. Then one day they are forced to deal with many years of unfiled taxes.

“The biggest mistake we see people make is neglecting to file their taxes year after year, and letting costs build up to insurmountable amounts – frequently, the penalties and interest from either not filing or not paying becomes as much as the tax owing,” says Freida Richer. “People are eventually pushed to resolve their tax debt because of the following reasons:

  • the CRA begins to garnish their wages to a point where they have no choice but to deal with their taxes,
  • the CRA threaten to file writ on the property of their home,
  • they get pressure from family or have a change in their life (birth or marriage) and want to get their finances in order.
  • their is a freeze put on their bank account.

Whatever the motivation, people should know that only  Trustee can help negotiate tax debt with CRA.”

With tax season approaching, now is the time for people to be especially mindful of their taxes and keep in mind that filing them, even if you owe, is still better than neglecting them all together.  CRA is more inclined to work with you if your taxes are filed and up to date than if they find out you have not filed your taxes in years.

On another note, keep your receipts and all tax related documentation for seven (7) years, you never know when/if you will be audited and its much easier to save the information than to try to hunt it down later.

If tax debt has become a challenge that you are ready to deal with, contact one of our trustees where we can review your options. Consumer Proposals allow people to make a fair and reasonable proposal to their creditors, including the CRA, for a revised repayment plan. Often times we are able to consolidate and reduce the overall debt owing and provide and interest-free repayment schedule for up to 60 months.

With multiple locations across Canada, there is sure to be an office near you.


How much is it really cost you? Credit cards and smart shopping.

When was the last time you put a purchase on your credit card? For most people making purchases on their credit cards is a daily, if not weekly, occurrence. So when was the last time you looked at the interest rate on your credit card? Or calculated how long it would take for you to pay off that purchase?

We often ask what makes a person choose when to call a Trustee for help with their debt. As Angela Lock, CIRP a Trustee in our Calgary office mentioned, “People tell me they are seeing these notes on their credit card statements of how long it will take them to pay the balance, and for most its shocking”.

Can you imagine buying an iPhone and having it take 2 years to pay it off? Assuming you put this purchase on your credit card, at 17% interest, that $859.00 iPhone would cost you an additional $300.

Most of us don’t think of these things when we are making purchases. Here are some tips to help keep you paying less in interest fees and keeping more in your pocket:

  • Do your homework. Find the best possible deals and make a list of the items you intend to purchase. Don’t purchase anything outside of this list.
  • Determine your budget before embarking on a shopping trip. Once you spend your budgeted amount, do not purchase anything else.
  • Whenever possible, spend using debit or cash – or if shopping online, set up a PayPal account where offered and make purchases using that instead of your credit card.

We have become a generation less accustomed to making purchases with cash and feeling the transaction of money leaving our hands, we have become reliant on the ease of ‘paying with plastic’ so being aware of our finances can get away from our immediate attention.

Putting off dealing with debt – missing payments, living paycheck to paycheck, transferring money around to deal with debts – can lead the problem to get worse and worse and get out of control. Taking the first step to seek out help can be the hardest step towards a fresh financial start. But by calling a licensed trustee you can get free financial advice or help with filing a consumer proposal which can reduce consumer debt by up to 75 percent.

To talk to a Trustee in your area, in Western Canada and Ontario call toll free 310.8888.

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The oil and gas price wave, preparing your finances for whatever happens

It’s been said that most people in Alberta are either working in the Oil and Gas industry or have someone close to them that does.

With oil prices plummeting to the lowest they’ve been since April 2009, many consumers are fretting over the health of the economy and job security. According to Statistic Canada, Alberta’s unemployment edged up to 4.7 per cent in December from 4.5 per cent the month previous. Shell Canada, one of Alberta’s largest oil projects, recently cut hundreds of jobs – striking fear into residents that more lay offs are to come. With this in mind, I thought you might be interested in a story looking at the impact on Albertans’ personal debt and expert tips on how to prevent consumers from falling into a financial crisis during this time.

When it comes to debt in Alberta, the province holds highest average household debt in Canada, sitting at $124,838 –nearly $50,000 more than the Canadian average. A recent BMO Report shows that despite the slump in oil and the decreasing number of jobs in the province, consumers are still spending at an unsustainable rate. Experts are warning consumers to take stock of their financial situation and prepare for the anticipated job cuts.

Average Household Debt
National ATL ON AB BC
2013 $72,045 $47,237 $76,970 $89,026 $79,089
2014 $76,140 $64,120 $67,507 $124,838 $99,834

Bruce Alger, licensed trustee with our consumer insolvency team in Alberta elaborates on his concerns, “Albertans continue to have the highest household debt in the country, and as other expenses continue to hike up such as utilities, property tax, and potentially interest rates, now is the time more than ever for consumers to have discipline and caution in term of their expenses.”

Alger offers some tips to consumers in Calgary to brace their financial situations:

Plan for the worst and start an emergency savings fund if you haven’t already – the goal is to get to several months of living costs put away in case job loss

  • Seek out where you can easily cut down on every day costs and apply the saving against debts or your emergency fund
  • Talk with a financial expert, like a licensed trustee, who can offer free advice on how to deal with any mounting debts or debts that have the potential to become a problem.

So our question to you is, has the price of oil affected you or someone you know? Have you started to take a review of your finances and developed a plan to ride out the oil and gas wave?

If you or a family member are facing financial struggles or would like some help with managing your debt, one of our professionals is available to discuss your situation. There are many options available to help and you may not need to go bankrupt. Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free from anywhere in Western Canada 310 8888. Visit us online at BC: or AB:

Find the fun in scrimping and saving – strategies to knock debt out

OK, with the New Year a week in, how is your resolution doing? Finances seem to be one of the items topping the list this year for Canadians. You may have holiday shopping, entertaining or travel bills that need paying. Let’s not forget those credit card balances you’ve been carrying for a while. But how do you make room in an already tight budget and figure out which debt to tackle first.

So, it’s time to look around and find creative ways to ‘scrimp’, cut back, change things up and presto: extra money to apply to that holiday (or old) debt and then eventually add to our savings.

Where to start? There are some easy, tried and true ways that when added together really can result in more money in your wallet.

How about nixing the daily coffee fix? If you buy one $4 latte each day, that coffee habit will set you back $28 a week, about $120 a month and $1,460 per year. Keep that up for five years, and you’ve slurped away $7,300, not including any money you might have earned by investing your cash instead.

Take a look at your cable TV, Internet and smart phone contracts too. Candidly telling your supplier you intend to make savings can actually result in some! Discuss the packages and contracts you have and see where you can remove TV channels that you don’t watch, eliminate phone features you don’t need . . . or perhaps where bundling services can result in overall cost savings. Perhaps you no longer need a landline. And, when your smart phone contract comes up for renewal, consider forgoing the tempting upgrade to new technology and stay off contract with a streamlined package of services at a reduced fee.

We all know that eating out can be a significant drain on finances. So too, can be daily visits to the grocery store. It’s proven that popping in for milk typically leads to the purchase of at least three other impulse items. Instead, take time on the weekend to plan a week’s worth of meals and purchase all the supplies in one shopping trip. Quadruple make and freeze favourites like Chili that can serve several meals. Utilize a crock pot slow cooker too: prepare quickly before you head out the door and return to a meal all ready to go – and a great smelling house! Of course, it always helps to use coupons if you have them (look on line and print off) and check with your preferred grocery store as to which day of the week has the most cost savings and offers.

Other small ways to cut back:

  • Cancel magazine subscriptions or agree with friends to share the cost and circulate the issues.
  • Give up expensive habits like smoking and alcohol.
  • Install a programmable thermostat that can easily cut your energy bill by 10 to 20% (check out the NEST).
  • Stretch the gaps between hair cuts or colour treatments – after all Ombre is a trend.
  • Before shopping for new clothes, clean out your closet and figure out where you can re-style and re-purpose some of what you already have. You may be able to sell some items at a consignment store or re-discover outfits that you can adapt or re-incorporate into your current favourites.
  • Don’t spend a lot of money entertaining your children. They mostly crave time with you . . . so implement fun no-cost family activities like tobogganing nearby, or movie and game nights at home where everyone unplugs from devices and spends quality time together.

The money you save may later help fund a great family vacation!

If you or a family member are facing financial struggles or would like some help with managing your debt, one of our professionals is available to discuss your situation. There are many options available to help and you may not need to go bankrupt. Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free from anywhere in Western Canada 310 8888. Visit us online at or

Which is the best method for paying down debt: Snowball or Avalanche?

Avalanche method recommends paying highest interest debt first, while snowball advocates smallest amount first.

Many of us have used our credit cards, cash advances and borrowed money over the holidays, shopped our way though the malls, ordered online and picked up gift cards for our friends, family, coworkers and picked up those little secret Santa gifts, all of this adding to the costs of the holidays. We purchased a turkey or ham, all of the trimmings, some spirits, made baked goods and bought boxes of chocolates.

Aside from the 5lbs you would like to lose, how many of us are going to be going on a debt diet over the next few months? Which is the best method to conquer those few debt pounds we plan to lose?

Blake Elyea, from our Vancouver office spoke to Canadian Press about some of his thoughts regarding the Avalanche method and the Snowball method, but which will work best for you?

‘Avalanche’ involves paying highest interest first

The avalanche method involves tackling the highest interest rate debts first — an approach that can save you money on interest payments, but may require more willpower if your highest-interest debts are also the largest ones.

“Mathematically that’s the best approach,” Elyea says. “However, you’re not going to see the instant results necessarily as quickly with that approach. It’s going to take more discipline.”

If you’re going to adopt the avalanche approach, you should be checking your balance and tracking progress and making a small budget to reward yourself when you reach your  short term goals.

‘Snowball’ method tackles small debt first

The snowball approach, popularized by U.S. radio and TV personality Dave Ramsey, involves tackling your debts from smallest to largest.

Knocking off the smallest balances first — while maintaining the minimum payments on all the other debts — gives the debtor some “quick wins,” making it a good approach for those who need to see some instant results in order to stay motivated, says Elyea.

“We all like instant gratification,” says Elyea. “We want to see that we’re making progress.”

It’s your choice

Although the avalanche method will save money on interest payments compared with the snowball technique, Elyea says any strategy that involves taking stock of your financial situation and actively tackling your debt load is a good one.

“If you have a structured way you’re going to approach your debt, either method is going to get you there,” says Elyea. “One might take you a bit longer than the other.”

If you are in a position where your debts feel overwhelming, one option might be to get a free consultation from a licensed trustee, not only can a trustee assist with helping you to plan and budget, but they may be able to offer additional debt reduction suggestions such as a  consumer proposal, an informal proposal to creditors, and, in certain situations to file for bankruptcy.

Whatever your financial situation may be after the holidays, if you feel financially hungover, there are options, take stock, develop a plan and reach out for help if needed.


Grant Thornton – Canada | We provide solutions for people with debt and financial challenges.

If you are facing financial struggles or would like some help with managing your debt—one of our professionals is available to discuss your situation. There are many options available, ask us about a consumer proposal. Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free at 310 8888.

Excerpts adopted from the Canadian Press article:

No gifts? Yes, really; it’s a good idea.

If you have elderly parents who may be struggling financially, now’s the time to suggest they don’t buy gifts for the grandchildren this holiday season. Sound radical? We think not.

Here’s why:

First, consider the reality of many older Canadians. In 2013, Statistics Canada found that about one-third of retirees have debt. Among those 55 and over who are not yet retired, two-thirds are in debt. While half of retirees with debt owe less than $25,000, Stats Can found that about one-sixth of them say they’re in hock to the tune of more than $100,000.

Blake Elyea, a senior vice-president with our team in Vancouver, says he sees a growing number of seniors as clients; those 65 and older made up 9.5% of all insolvency filings in 2013 (up from 9.2% in 2012 and 9.1% in 2011), according to Industry Canada. This trend is seen across Canada.

“The common thing that I see is either poor planning or no planning for retirement and maintaining your pre-retirement lifestyle. Then when your income changes, the shortfall is being backstopped with credit cards and a line of credit,” Mr. Elyea says.

Consider too that many seniors live on fixed incomes; they lack the means to aggressively address debt repayment. The knock-on effect can be that adult children have to pitch in and help their parents financially. That’s often a recipe for stress for both generations.

Secondly, do our children really need more video games or designer duds – and are the grandparents the ones that should be buying these expensive gifts?  We believe there are many more quality gifts we can give this year, the gift of time being the most valuable!

What we all crave over the holidays (including the kids) is rest and less stress. So, tell the grandparents they are off the hook for gifts. Their wallets will get a break and they can skip the shopping hassle. Instead, suggest some ‘old fashioned’ fun together as a family. Game nights, cookie-making or gingerbread house building together; share stories and family reminisces. Maybe start a family tree project together.

The holiday season at its heart is intended to be a time of togetherness and appreciation, and yes, even your kids – could be the happier for it.