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This website is bringing to light the government’s debt and how it affects each taxpayer. This website was created by the people for the people to help keep our government’s debt in check. It is used to ensure our government does not go over its means without the say of its citizens.

This video was very interesting as it shows that even the debt of our country can affect each taxpayer. In 1990 thirty-eight cents of each dollar spent was used to pay back our annual interest. It is comforting to know that we have average citizens who are looking out for one another.

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Canada’s National Debt Clock : The Canadian Taxpayers Federation

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Nothing moves unless it is pushed. Help us push governments to balance their books. Sign the petition!

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This website is talking about debt in the form of mortgages. There was a woman who was struggling with paying off her home and her credit cards. The bank offered her a second mortgage making her believe it would make it easier on her in the long run which was not true.

This post reminded me a lot of post 1. The credit cards target you and even the banks do. They will lead you to believe taking on more debt will make it “less stressful” when it only hurts you in the long run. The banks don’t actually have your best interest in mind, and I have learned to be wary of this kind of trap.

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In 1998, Ann bought a one-bedroom condo in the Kitsilano area of Vancouver. Gainfully employed at a printing company, she found the monthly mortgage payments were within her budget (Ann and others quoted in this story asked that Maclean's not use their full names). The building was on the older side, and eventually she got the itch to update the decor. She intended to replace only her bathroom sink; she ended up renovating the entire bathroom. "I remember thinking, 'Well, now that I've started...' " The kitchen came next, then the living room and finally the bedroom. Ann thought the renos, funded partly on credit and spaced out over a few months, would boost her condo's value. She also wanted to keep up with her neighbours. "Everyone was doing something," she says.

Finances became tight afterwards, and she only paid the minimum on her credit card each month. Every year, her condo fees rose while her salary at the printing company (where she still works) stagnated. She began relying on credit for everyday expenses, and later took out a second card.

Soon, one of her banks began calling with a solution to help manage her debt. She ignored the inquiries, preferring not to think about her finances, but she started to feel desperate: "I just wanted to do something, and that was the only thing coming my way." The bank offered a loan at a low rate to pay off her high-interest credit card debt, and she ended up taking out a second mortgage for $80,000. The interest rate still wasn't manageable. "It was a huge mistake," she says.

READ MORE: After weathering the Great Recession, can Canada avoid a debt crisis?

Saddled with two mortgages, rising condo fees and a flat income, she continued relying on credit cards. Surprise expenses, such as dental work, added to her debt. Embarrassment kept her from seeking help. Three years ago, she decided to sell her condo. Despite Vancouver's booming market, the sale didn't solve Ann's financial problems. She moved in with a friend and was able to pay off her mortgages, but she couldn't make much of a dent in her credit card debt.

In 2017 year, Ann turned 64. She was carrying $70,000 in debt, and knew she couldn't work another decade to pay it down. That realization prompted her to seek help, and she eventually met with an insolvency trustee. Ann's trustee filed a consumer proposal on her behalf. Less severe than personal bankruptcy, a proposal is an offer to all of an individual's creditors to pay a portion of debt under a strict plan over a maximum of five years. The remainder is discharged. Creditors typically agree to these arrangements since they are guaranteed to recoup at least some of their money. For Ann, filing a proposal came as a relief. "I actually feel like I can breathe again," she says.

Other Canadians are still suffocating. In early 2017, the household debt-to-income ratio hit another record of 167.8 per cent. A long period of abnormally low interest rates has enabled Canadians to carry massive debts, since monthly payments appear manageable. Further, in cities with rising home values, particularly Toronto and Vancouver, homeowners can secure a home equity line of credit (HELOC) to pay other debts or simply fund their lifestyles. In spring of 2016, the Financial Consumer Agency of Canada warned that the increased use of HELOCs "may lead Canadians to use their homes as ATMs, making it easier for them to borrow more than they can afford."

Insolvencies, though, are rare. As of the end of July [2017], there were nearly 123,000 consumer proposals and personal bankruptcies filed by Canadians in 2017, a decline of 1.2 per cent from the same period in 2016. That might be a sign of fiscal prudence, but it's also the result of record low interest rates that ease debt-carrying costs. Scott Terrio, an insolvency estate administrator and president of Debt Savvy in Toronto, calls this phenomenon "extend and pretend." Canadians can extend their debt repayment terms and pretend to live a lifestyle they can't otherwise obtain. He sees it all the time-couples with decent jobs carrying large mortgages, and putting daycare, cars and vacations on credit.

RELATED: Canadians pile up debt faster than anyone in the world

Some reach a trigger moment when they can no longer pretend-a job loss, say, or divorce or illness. But lately Terrio has noticed a change in his business. More clients are coming in because they're simply tapped out. As with Ann in Vancouver, there is no trigger. "It's a gradual realization for some people," Terrio says. "They can't do it anymore." Lana Gilbertson, an insolvency trustee in Vancouver, has seen the same change. "Nowadays, they have jobs, they're making money, they're plugging along, but they're just in over their heads," she says.

The cost of borrowing is set to rise, adding strain to households. The Bank of Canada hiked rates twice in 2017, signalling more could be coming-depending, in part, on whether households can handle it. Economists at TD Bank Group believe two more rate hikes are likely next year. That will cause rates on everything from lines of credit to car loans to mortgages to tick up. At the same time, house prices are not rising as quickly as they once were in many Canadian cities. RBC Economics forecasts home prices in Canada will increase 11.1 per cent in 2017-and just 2.2 per cent in 2018. Canadians won't be able to pull cash out of their homes so easily to get themselves out of trouble. "The insolvency business is cyclical, and we're at least a year overdue for shedding blood in the system," Terrio says. "If ever we were poised to hit that right on the head, it's now."

For some Canadians who struggle with debt, the problem can be traced back to real estate. In a survey TD released in September 2017, 56 per cent of respondents from across Canada were willing to exceed their budget by up to $50,000 to purchase a home. At the same time, 97 per cent of homeowners said they wished they'd factored in other obligations before buying, such as property taxes, maintenance costs and "overall lifestyle expenses."

The problem is not confined to Toronto or Vancouver, where huge price gains have enticed buyers to stretch themselves for fear of getting permanently priced out. In Regina, Joshua and his wife purchased a house in 2014 when expecting their first child. Both 24 years old at the time, they carried about $35,000 in debt between them, mostly tied to student loans. "We rushed into getting a house because we just thought it would be the right thing to do," Joshua says. "It almost felt wrong to be renting and having a kid." (Joshua's mom pressured them to buy, too.) In one weekend, they viewed 16 houses. The very last one felt right. They put down five per cent and moved in.

But the couple was blindsided by maintenance costs. Their furnace needed repairs, and they later had to replace the water heater, which set them back hundreds of dollars. After expenses, the pair has virtually no cash to put toward their debt. Joshua's card is maxed out, and his wife's card is close to the limit. Joshua says they're frugal (splurging means going to Subway) and live paycheque to paycheque. The situation became worse this year. His wife is on maternity leave with their second child and their variable mortgage rate ticked up. "Just the way the rate is fluctuating is killing us," Joshua says, who works in sales at a telecommunications firm. "It can't keep changing like this."

Staring down tens of thousands of dollars in debt, rising mortgage costs and no foreseeable way to substantially boost their incomes, the couple decided to sell their house and rent. They're not expecting a windfall. A while back, their basement flooded and they used the insurance money to repair the foundation. The basement had been finished, but there's no cash to renovate it, so it will be sold in "as is" condition. The market in Regina is also soft, and the average home price is down slightly from 2014. Joshua hopes to at least get his down payment back, and their financial situation should improve when his wife returns to work as a massage therapist. "We'll be able to really hack away at our debt," he says, "but it's going to take years."

While real estate has led to financial distress for some Canadians, it's been a saviour for others. The home equity line of credit has allowed millions of households to borrow against their properties, providing cash for everything from renovations to investing to debt consolidation. HELOCs have been around in Canada since the 1970s, but in the mid-1990s, lenders started marketing them to a wider swath of consumers. Between 2000 and 2010, HELOC balances soared from $35 billion to $186 billion, according to the Financial Consumer Agency of Canada, an average annual growth rate of 20 per cent.

The pace of growth has slowed since then, but balances still hit $211 billion in 2016. Lenders have been all too eager to dole out HELOCs, creating the perception of instant, easy money. An animated commercial for Alpine Credits, a lender in B.C., features a room full of employees rubber-stamping loans-even for a client who wants to install a four-storey waterslide. (The employees celebrate by cheering while one pops open champagne and another tears off his shirt.)

RELATED: Praying for a real estate crash

One common use of HELOCs is to pay off higher-interest debt. In 2016, according to Scotiabank, Canadians used $11.6 billion (or 28 per cent of HELOC withdrawals) for debt consolidation. Doug Hoyes, a founder of licensed insolvency trustee Hoyes, Michalos & Associates, has witnessed the shift. The firm has offices across Ontario and in 2011, roughly one-third of the firm's clients owned a home when they filed for bankruptcy or a consumer proposal. Last August, just six per cent of insolvent consumers were homeowners. "You don't need to file a proposal to pay off your debt," he says. "You just go out and get a second mortgage."

If the pace of home price appreciation slows down-or worse, prices drop-there will be consequences for households that have been piling on debt. The slowdown in the southwestern Ontario real estate market is already creating stress. Hoyes recently saw a couple who purchased a home four years ago and accumulated $70,000 in unsecured debt. They bought furniture, hired landscapers and borrowed to finance a swimming pool. Before the slowdown, the couple might have earned $100,000 by selling their home. Now they might get $70,000, which would barely cover their debts. They're also reluctant to sell and move to a different neighbourhood. And because of the softening in the market, they haven't been able to find a lender willing to issue them a HELOC large enough to cover their unsecured debt. Their solution? Convince one set of parents to take out a second mortgage, and borrow from them. "It's the bank of mom and dad," Hoyes says.

And while debt consolidation is an effective strategy if consumers don't fall back on bad habits, Terrio says recidivism is a problem. "They go ka-ching out of their house and pay off their credit card debts, but they go and run up their cards again," he says.

Borrowing against her home wasn't enough for Charis Sweet-Speiss to pull herself out of debt. A registered nurse, she divorced and moved from Ottawa to Oliver, B.C., a town south of Kelowna, in 1998. Her then-boyfriend (now husband) wasn't working at the time, and the couple used the divorce settlement to start building a new life; they bought a used car, a place to live and furniture. "Then that money was gone, so I just started using credit cards," she says. "And it was so easy." Their debt started building, and their income wasn't sufficient to pay more than the minimum. New credit cards she'd never asked for arrived in the mail, and Sweet-Speiss started using them. She had 13 on the go at once, and eventually they were all maxed out. "I've always been employed. I make a good salary. But just paying the minimum every month was a lot of money," she says. Every six months, she phoned each credit card company to wheedle them into reducing her interest rate. She caught some breaks, but never enough to make a big difference: "It was a horrible way to live."

Sweet-Speiss says she wasn't frivolous with her spending, but in retrospect, she made questionable decisions. When her daughter would run up a large balance on her own credit card, Sweet-Speiss sent her money-even though it meant sinking deeper into debt herself. Sweet-Speiss borrowed against her home at one point and withdrew money on two separate occasions to consolidate her debt, but was still left with $40,000 on her cards, and it built up again.

After more than a decade of amassing debt, Sweet-Speiss turned to the Credit Counselling Society for help ridding herself of nearly $67,000 spread across 13 cards. Once enrolled, her interest payments stopped and she was put on a plan to pay down principal. She completed the program this in 2017. She still has a mortgage and a line of credit, but is finally free of high-interest credit card debt.

Sweet-Speiss says her mortgage would have been paid off a decade ago had she never borrowed against her house. Indeed, one of the problems with home-equity loans is that they cause debt persistence. HELOCs are marketed with little or no obligation to repay in a timely manner. For years, one of the main advantages of owning a home is the forced saving effect-paying the mortgage, combined with rising property values, builds equity. A HELOC undermines that dynamic, tempting consumers to access cash now rather than build wealth over the long term.

It marks a fundamental shift in the way Canadians think about homeownership. "Whatever happened to getting to the end of a mortgage and owning your home?" says Gilbertson, the trustee in Vancouver. "It's less about truly owning our homes today and more about having another revenue stream to fund our lifestyles."

VIDEO: How to keep from drowning in credit card debt

That Canadians are carrying record amounts of debt is not in dispute. But the magnitude of the problem is contested. "I think the fears are overstated," says Paul Taylor, CEO of Mortgage Professionals Canada. "Canadians are incredibly prudent, and history will show that." As the head of an industry association for mortgage lenders, brokers and insurers, Taylor isn't exactly impartial on the issue. But he points to a report from the Parliamentary Budget Officer released in 2017 showing that, since 2009, the debt service ratio-a measure of income spent to pay debt-has remained steady at around 14 per cent, not much higher than the long-term average. That's a sign that even though we have more debt than 20 years ago, we're not overextending ourselves, Taylor says.

But the same PBO report projects the debt service ratio will rise to an all-time high of 16.3 per cent by the end of 2021. Taylor says the premise is a "little bit flawed" because it presumes Canadians will make no changes to their finances owing to higher interest rates. "I'm certain people will become prudent again to ensure they retain that [historical] expense ratio," he says. Already, brokers have been fielding calls from Canadians about locking in their mortgages to guard against future increases, for example.

Bank of Montreal chief economist Douglas Porter also contends that too much emphasis is placed on the debt-to-income ratio. "We have long been of the view that much of the commentary on this topic has been overwrought," he wrote in a research note this month. The savings rate is close to the 25-year average of five per cent, which doesn't point to a consumer debt apocalypse. Rather, Porter expects spending to "gradually moderate" as borrowing costs rise.

Still, numerous surveys show Canadians are worryingly close to the edge. A report from MNP Ltd., an insolvency trustee, released in October 2017 found 42 per cent of Canadians said they don't think they can cover basic expenses over the next year without going deeper into debt. An earlier survey this summer found 77 per cent of respondents would have trouble absorbing an additional $130 per month in interest payments. And as organizations such as the IMF and the OECD have constantly warned, high household debt renders the country far more vulnerable to economic shocks.

When a downturn does hit, even a high income won't necessarily provide enough protection. Gene moved from the U.S. to Calgary 12 years ago to take a job with a major oil company, earning more than $300,000 annually. He purchased a home for close to $1 million and supported his wife, two kids and mother-in-law. In 2015, Gene lost his job when the price of oil crashed, and was out of work for nine months. He took out a home equity loan for $30,000 to make ends meet, and eventually found another job at a pipeline company, but for half his previous salary. A six-ﬁgure income would be more than enough for most Canadians, but Gene and his family were accustomed to their lifestyle. The kids were enrolled in extracurricular activities, and housing costs added up to $4,100 every month.

A year later, Gene was laid off again. "It was just devastating for us," he says, adding that he began questioning his self-worth if he was unable to provide for his family. He eventually found another job, but at a still smaller salary. On top of the mortgage and the line of credit, Gene had another $20,000 loan. When he first purchased his house, he didn't quite hit the 20 per cent down payment threshold; his bank offered him a loan to cover the difference. He had a couple thousand in credit card debt and a small, high-interest loan from EasyFinancial he'd taken to cover an unexpected medical expense for a family member. Finally, he faced a $90,000 tax bill, since he opted not to pay after he lost his job. Gene sought help from an insolvency trustee in 2017. "I just wasn't making enough money, and I had to protect the family," he says. Gene submitted a consumer proposal, but one of his creditors rejected the terms. In October, Gene filed for bankruptcy-just over two years after making a salary most Canadians can only dream of.

This sort of precariousness worries some experts, who fear wider implications for the Canadian economy. "We continue to see the household sector as accident-prone, with a complacency toward debt which could prove disruptive to the economy," wrote HSBC Canada's chief economist recently. The result is Canada is at "some risk" of a balance sheet recession-a period of slow growth or decline caused by consumers saving and paying down debt rather than spending. David Madani, an economist with Capital Economics in Toronto, doubts the growth Canada has seen in exports recently will be enough to offset the decline in consumer spending. "Canadian policy-makers have allowed household debt to rise above the disturbingly high levels reached in the U.S. in 2007, raising the risk of a similar potentially disastrous deleveraging down the road," Madani wrote.

Statements like that could be dismissed as fear-mongering, but the reality is Canada hasn't been in this situation before, and the outcome is impossible to predict. Canadians ignored warnings from policymakers about piling on debt for years because low interest rates were too enticing. Now households will have no choice but to dial it back. The only question is how bad the fallout will be.
RELATED: MORE ABOUT DEBT:

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How Canadian homes became debt traps - Macleans.ca

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In 1998, Ann bought a one-bedroom condo in the Kitsilano area of Vancouver. Gainfully employed at a printing company, she found the monthly mortgage payments were within her budget (Ann and others quoted in this story asked that Maclean's not use their full names).

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This video was very interesting, especially as a student. The credit card companies target young adults fresh out of school. These companies were not making as much money from people who paid back the principal right away, they found they made more money off people who could only pay the minimum to make money from the interest.

This video was unique in that it really brought to light the dangers of credit cards as a college graduate. Credit companies target young adults and it almost seems predatory. I found this video to be useful in that I will be more aware of these targeted credit cards once I graduate.

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This video is going over debt traps and how to prevent/avoid them. It goes over taking out credit cards to pay off other credit cards and taking out payday loans. It has some helpful tips such as taking on “good credit” and using credit cards sparingly.

This video was chosen because it takes a more proactive plan of attack for dealing with debt. This video was informative by teaching you how to learn when you are in a debt trap, and how to avoid them. It was very specific about things such as taking a 0 interest loan from family if available.

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How To Avoid The Debt Trap When Borrowing in Canada

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I really enjoy this picture as it is a great metaphor for the impact debt can have on an individual. If debt gets out of hand it can spiral you out of control which is represented by this man flying off.

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This illustration is great because it inspires hope. We by no means have to live a life of debt. It shows us that with enough effort, we can break free from the shackles of debt.

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This article talks about the predatory nature of payday loans, and in one woman’s case, she’s $5000 in debt and paying close to 47% interest in her loans because of the poor timing of events—she took out the loan right before the pandemic put her out of a job, like many other Canadians.

I chose this article because it talks about how the government doesn’t have the right laws or legislation in place to prevent these debt traps. Payday lenders run rampant in Canada because of the lack of laws around taking out loans. Heck, even the US has a lower cap on the payday loan interest rates.

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Patricia Edwards of Toronto wanted to help her two adult daughters when they fell behind on bill payments at the rented townhouse they share.

She has few assets and a poor credit history, but she was employed at the time, so she went to a payday lender - not for a payday loan, but for an ongoing line of credit.

"I was like, OK, let's see if I qualify for the loan because I'm working."

Edwards, 53, was able to borrow $1,500 early in 2019 from Cash Money. But then she lost her job, and in 2020 came the pandemic. She's had to refinance the loan twice, and went to another lender, Money Mart, for an instalment loan that could be repaid over two years.

Now she's close to $5,000 in debt, all in, paying nearly 47 per cent interest on both loans.
WATCH | Ottawa under pressure to cap high-interest money lenders:

Her predicament, and that of many other Canadians like her, has a chorus of voices calling for industry reform. Activist groups, elected officials and even some smaller lending companies say financially vulnerable people are too often lured by payday lenders' low bi-monthly payments on longer-term loans without realizing how the costs will add up.

Only option

"I'd love to get a bank loan," said Edwards. "But I don't have a car, I don't have a home, I don't have any assets. I don't qualify."

Payday lenders argue that's exactly why their services are essential. They provide money to people in need who otherwise would be unable to borrow.

In a statement to CBC News, the Canadian Consumer Finance Association, which represents close to 1,000 high-interest lenders across the country, said unsecured loans are expensive to provide, and that its members' interest rates are government-approved.

"Our members are highly regulated and licensed under provincial legislation across Canada," the statement says. It also notes that "for reasons of risk, the lower the borrower's credit score the higher the interest rate."

Patrick Mohan runs Money Direct, a payday lending firm with nine locations in Ontario and Nova Scotia, but he is critical of the larger chains. He started a different organization in 2008 to represent operators closer to his company's size, the Independent Payday Loan Association of Canada. He said the group is made up of 50 small "mom and pop" lenders who don't offer long-term loans or lines of credit.

The member companies cash cheques and sell Western Union money transfers, but in terms of lending, only provide short-term payday loans, which are meant to give a consumer the funds necessary to make ends meet just until their next paycheque arrives. Borrowers pay $15 every two weeks for each $100 borrowed, and he says most pay off their loans promptly.

"The payday loan product is one pay period," he said. "Say you need $400. You come in, you get the money, then pay back $460 under the current rates, and that's it."

Mohan said larger chains such as Money Mart, easyfinancial, Cash 4 You and Cash Money started to offer a wider range of financial products, including long-term, high-interest loans and lines of credit, after several Canadian provinces began to crack down on payday lending in 2016, limiting the fees charged. Alberta lowered the fee from $23 to $15 every two weeks, while Ontario cut it from $21 to $15.

"They saw what was coming, then they started pushing the lines of credit and instalment loans," he said. "They figured, 'Keep it under 60 per cent and then we don't have to worry about feds coming after us.'"

An interest rate of 60 per cent is the threshold specified in Canada's Criminal Code as illegal.

Pushing for change

Acorn Canada, a national organization that advocates for low-income people, has taken aim at large payday lenders, organizing protests across the country and calling on the federal government to take action.

Donna Borden, vice-chair of Acorn's East York chapter in Toronto, said the pandemic has forced more Canadians to turn to high-interest lenders.

"A lot of people are using or taking these loans to buy food, to pay their rent," she said. "And especially now with COVID, it's even worse."

Instalment loans, where regular repayments are scheduled over a number of years, were the fastest growing segment of lending among payday companies, according to the results of a limited online survey conducted by Acorn in February. It found that the number of survey respondents who reported taking instalment loans had jumped from 11 per cent in 2016 to 45 per cent in 2020.

" People are losing their jobs, so they're desperate for money," said Borden.

The Canadian Consumer Finance Association disputes that their loan portfolios are growing.

"There has been a significant and sustained drop in the number of loans taken out by Canadians," the CCFA said in its statement to CBC News.

It pointed to government support programs and a "lack of spending during the lockdowns" as the causes.

Patrick Mohan of the Independent Payday Loan Association of Canada said he's noticed a similar trend.

"We're still down 35 to 40 per cent," he said, referring to the level of demand he sees. "Things are coming back a little bit, but people aren't spending as much and they don't need to borrow."

'A gold mine'

Independent Sen. Pierrette Ringuette of New Brunswick has sponsored two bills to have the Criminal Code amended to lower the maximum interest rate that lenders can legally charge from 60 to 20 per cent plus the overnight bank rate. Neither bill moved forward due to prorogations and election calls, but Ringuette said she intends to sponsor another one.

"Canada is like a gold mine to these institutions because of the current state of legislation we have in place," she said.

She said a number of American states have put a lower cap on interest rates charged by payday lenders, yet they continue to be profitable.

"Ifthey can serve in the U.S. states where, on average, you would have a 10, 12 or 15 per cent capped interest rate, they can serve Canadians at 20 per cent very well," she said.

But Ringuette said it can take years to get bills through the Senate and then more time to have them passed into law. She said the Trudeau government could take action much more quickly, perhaps even announcing a crackdown in the upcoming federal budget expected in April.

"It can be done within three months, and it has to be done within three months," she said. "I hope for everyone that it is in the budget."

Trying to escape the debt trap

Patricia Edwards said she worries she may never escape her debt trap. She is left searching for a solution. For example, though it's not an option in her case, she has even thought about how credit card borrowing could help solve her 47 per cent interest rate problem.

"If I could get a $10,000 Visa card for 19 per cent, I would get the Visa card to go pay them all off," said Edwards, "and then I'll only owe 19 per cent on the Visa card."

Many consumers complain credit card rates are far too high, but compared to what payday lenders charge on some of their products, those rates could look like a bargain.

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Payday lender lines of credit and instalment loans at 47% create debt traps, critics say | CBC News

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Patricia Edwards of Toronto wanted to help her two adult daughters when they fell behind on bill payments at the rented townhouse they share. She has few assets and a poor credit history, but she was employed at the time, so she went to a payday lender - not for a payday loan, but for an ongoing line of credit.

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This website, ignoring the fact that they’re trying to sell you their book/software/program, gives you plenty of resources in order to get out of debt. Funnily enough, it does mention a lot of things we’ve already covered in this course, like gathering spending information/habits, making a budget, setting goals, etc.

I picked this website because unlike other resources about debt-traps, this one gives you information on how to get out of debt if you’ve already fallen in it. With enough education and information, you can get yourself back to a debt-free life. I learned that there are lots of online tools you can use for budgeting or planning.

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If you are tired of the standard debt advice (cut expenses; live like a monk), you're in luck . . . . . .because today I'm going to share a huge practical list of the absolute best ways to get out of debt.

I've worked in the financial world for 20+ years and my company has helped thousands of Canadian families and businesses get out of millions of dollars of debt.

My name is Paul Murphy, by the way.

These tactics are based on what I've seen work over the years from working with hundreds of families, individuals, and businesses.

None of these links or recommendations are affiliate links or paid promotions. These are just resources, debt reduction tactics, and things we've found to work.

Chapter 1: Is this advice for you?

In this post, you'll get tons of ideas for getting out of debt. I cover practical lessons, debt calculators, online financial literacy workshops, videos from experts, and debt worksheets.

This post, though, is designed for people on the road to financial recovery.

We've written other articles for those of you drowning in debt. If you are 30K and above in debt, we recommend that you read this debt guide or take a look at our resource on bankruptcy alternatives.

Those posts are more suited to families and individuals carrying large amounts of unsecured debt.

But let's begin with the 3 different methods for getting out of debt. The goal is to find the type of advice that works best with your personality and lifestyle.

The three types of debt reduction advice

In general, debt reduction techniques can be broken in three camps.

The first is frugality. Blogs like Mr. Money Moustache focus on reducing the money going out. This involves things like being militant about spending, searching for deals and coupons, and breaking away from the conventional money traps in our culture.

Do you have the disciple to be frugal? If you don't, then there are different paths out of debt.

The second type of advice involves earning more. Blogs like I Will Teach You to Be Rich focus on increasing the amount of money coming into your bank every month.

This might seem daunting for some people but it involves a different mindset. For example, instead of saving your money and skipping a vacation, you could go camping and rent your home on Airbnb, using the profit towards debt reduction.

Or get a second job on the weekends to put directly towards your debt, rather than skimping on coffee.

The important thing to remember is that you really need to be honest about your personality.

I'm more in the second camp. I'd rather work Saturdays and look for part-time earning opportunities (such as boarding dogs or picking up extra seasonal retail work at Christmas) than extreme frugality.

Other people, value their free time. So, they'd rather practice extreme saving habits all week so that they can spend Saturday in the park with their family. There is no right answer.

But you should pick a method that works for you (we cover different tactics below). The final camp offers a hybrid. Authors like Gail Vaz-Oxlade tend to recommend both ruthless financial pruning and additional earning.

This can work but you need to be careful about fatigue. Banning eating out can work for a few months but if going out for a date night with your partner is what makes you feel fulfilled, it's easy to fall back into old habits.

This is why you want to choose the method that fits the type of life you want to live.

Chapter 2: Debt calculators & tools

Debt calculators are useful to start planning your method of attack. They help you see the reality of your situation.

Here are a few we always recommend to the people we help out of debt.

Workshops & tools for financial literacy

If you are in debt, you need to invest in a bit of financial education. Here are a few workshops, videos, and more advanced resources for understanding and getting out of debt.

The best books for getting out of debt

Here are the best books for navigating debt and putting a solid plan in place.

We've included a lot of information and debt reduction strategies below, so keep reading this article before you spend too much at Amazon.

Chapter 3: the emotion of debt

Cut ruthlessly on things you don't love

My friend loves to buy lunch during the week. He is good with his money and can afford it.

For example, he doesn't eat out on the weekends. So buying lunch everyday is his guilty pleasure and helps to make work more enjoyable.

I love travelling. I really don't care about eating out for lunch. I feel that I can make just as good food at home. So, I put the money I would have spent on lunch towards my vacation fund.

The point is that to get out of debt you need to develop long-term financial habits.
The key is to ruthlessly cut expenses you don't care about and to allow yourself some freedom for the things you love.
Do you buy breakfast at the coffee shop because you love the ritual? Or do you do it because you wake up late everyday and never have time to grab something from home?

Do you buy wine from the expensive beer and wine store by your house because you love their selection and the neighborhood walk? Or because you don't feel like driving to the cheaper liquor store?
Take Action!
Do an audit of what you spend your money on. Look for basic items to cut forever from your spending.

This gives you more money to put towards debt and more freedom to indulge occasionally on the things you love. I did this audit and saved myself hundreds of dollars every year on things I really don't care about.

Here's what I found I could cut from my spending:

1. Coffee shops: I like waking up early and having it in my house. I buy good organic coffee and so I prefer to wake up early and have it at my computer rather than getting it to go.

2. Wine: I can buy it cheaper in bulk and store in my house rather than spending money at the beer and wine store.

3. Lunch: I really don't care about it. I bring lunch to work and save about $50 per week.

4. The right grocery store. I used to shop at the one closest to my house. It's expensive and everyone knows it. An analysis found that it was about 15% more expensive than the larger chain grocery stores. That is a ton of money every year just for convenience.

Keep your debt repayment rolling

After you have paid off one debt, keep the momentum going. This is what Dave Ramsey calls the "debt snowball" effect.

It involves understanding that debt repayment is psychological. Resist the temptation to celebrate paying down a big debt as an excuse to take a break.

Stay focused on eliminating the next one! I can remember when I had a student loan. God! I hated paying off this debt. Even after I had paid down my credit card and had extra money, I hated paying down this debt.

This, of course, was pure emotional thinking. Debt is debt and while student loan debt accumulates interest slower than consumer debt, it still eats your money.

Stop emotionally categorizing debt

Humans have a strange ability to compartmentalize the world.

We're fine paying down debt with our salary, but when we get a bonus at work we feel that it should be used for something fun.

A good example of this is the categorization of good debt versus bad debt, even though the net result is that debt generally keeps us broke and prevents us from putting our money to work for us.
Take Action!
It's important to notice your emotional drivers when it comes to debt.

Things like mortgages, student loans, spousal debt, and bankruptcy have a lot of emotional power and often-fuzzy reasoning.

For example, you buy a home to invest in your future. If this investment is crippling your financial life and sinking you into debt-what are you doing?

Stop hating your future self

When you keep debt for a long period of time to achieve freedom now (I don't want to pay debt now, I need to enjoy life), you rob yourself of future freedom.

You can delay your retirement. Or lose out on an opportunity to get ahead. One business I worked for went through a slow period. They borrowed money from the bank to pay me and the other employees.

They were willing to borrow more to stay afloat. Another business I worked at went through a similar period of hardship. Instead of borrowing money from the bank, the owners dipped into their personal savings to make payroll.

It was harder to do and risky. But it kept their business free of debt. The point is that some people will try harder than others to avoid debt and will avoid it at all costs.

In general, it's better to suffer to avoid debt than suffer the long consequences of borrowing during a time of crisis.
Take Action!
Watch this TED video on debt.

It shows that we should learn to hate debt more.

Not just to hate paying interest or hate being broke. But to hate the concept of debt as it takes our freedom.

Think of buying as investing

"Business and financial planning are exactly the same," says Arlene Dickinson, CEO of Venture Communications and co-star of "Dragon's Den."

"You have to ensure you are putting your dollars to the right use and that you're investing in areas with the most reward and potential."

This really rings true with big purchases. Think carefully about tying up your money.

For example, when I put a down payment on my home, my mortgage broker told us to take $5,000 from the payment to pay off our car.

This saved us about $500 in interest and freed up our cash flow. With less consumer debt, we could get a better mortgage rate and could put that new money to a better use.
Take Action!
Think strategically about how you spend your money.

And be guided by a simple principle: how can I avoid paying less interest?

Chapter 4: budgeting & spending

Use ReadyForZero

Ready for Zero is an online tool that helps you manage and reduce your debt.

It helps you track the different interest rates of your loans, gives you payment reminders, and helps you set debt reduction goals.

I love it! It can really help to bring your debt reduction goals into focus.

Use this amazing online mortgage calculator

The government of Canada has a great mortgage calculator available online.
You can find the tool here.
Don't forget to play around with prepayments as they can result in huge savings.

I cover prepayments and how to pay down your mortgage faster in the last section of this article.

Practice planned spending

The road to debt is paved with the best intentions to never spend any money ....EVER!

No dinner out. Rice and beans every night. Brown bag lunches. Zero entertainment budget until the vacation on the credit card is repaid.

How often does this work?

If you are like me, living like a monk and working all the time isn't much fun. And so, you slip into old habits and the spending continues.

A better strategy is to sit down at the beginning of the month and plan the purchases that you will make. I call these "planned purchases."

You can allow yourself a certain number of flexible credits. For example, this month we have these credits we can use:

1. 4 fancy coffees while out on Saturday walks

2. 1 pizza night

3. One night at the movies

4. 1 happy hour with work

Impulse purchases happen at emotional times.

For example, you don't plan to order take-out but then after a 12-hour day at work and an empty fridge, it just happens. Or you don't plan to go out for drinks but then a friend texts you and you instinctively say yes.

By planning these purchases, you can better control your spending, still enjoy a bit of your life while paying down debt, and better budget for your "wants."
Take Action!
Make a list of planned purchases.

Grant yourself some indulgences based on past impulse purchases. I recommend using a small kitchen whiteboard.

Once you've used up a credit (like ordering take-out), mark it down.

This system is much easier than opening a spreadsheet and entering a purchase every time you buy lunch at work.

Analyze convenience, especially packages

In North America, whenever something is convenient, you will pay a premium for it.

To reduce debt, you need to learn to recognize convenience and then reinvest the savings into paying down debt.

For example, I recently switched smartphone plans and was given two options. Pay nothing for the phone and get a higher monthly bill. Pay $200 on the spot and get a lower monthly bill.

Most people choose the first one. But that $200 I paid upfront saved me $540 over a two-year period.

Recognize these traps and avoid them. The more money you save for your future self (such as having a $10 lower monthly bill), the easier it is to climb from the pit of debt.

Track your spending for three months

I very much like Gail Vaz-Oxlade's method of making couples track their spending.

One of the ways we get deep into debt is simply not knowing where exactly the money goes.

Again, it comes back to input versus output. So the first and necessary step to getting out of debt is understanding your spending over a three-month period.

This lets you normalize your income versus debt and get a true picture of what's going on.

There are three steps. First, track forward for at least three months using a Spending Journal. Next, conduct a Spending Analysis, studying the different categories (such as wants versus needs) and places you are bleeding money.

And finally, you can create your budget based on this work. You can do all this manually with a piece of paper and a spreadsheet. You can also purchase for $5 Gail's Spending Analysis package.

It includes her basic system and is worth the money, as it will save you some time.
Take Action!
Get Gail's Spending Analysis package to help you track your spending and create a budget.

Buy YNAB's budgeting software

I tried Mint.com to manage my budget but I found that the failure of Mint's software is that it is an analytics program.

Analytics shows you "what happened." So by the time you find out where your money went it's a bit too late.

It's hard to change your behaviour based on what you've done in the past.

I recently started using YNAB's budgeting software. It's fantastic and a good tool to use.

Unlike Mint, it is designed to change your behaviour and help you proactively budget instead of worrying about past spending sins.

One of the core principles of YNAB is to help you slowly build enough money so that you can live on last month's salary.

In fact, they outline 4 basic principles of money and debt in the video above. I really like their approach.

Their budgeting software helps you break the debt cycle, giving enough cash on hand to handle life's unexpected emergencies.

I've learned from helping families survive financial crises is this: often a very minor expense (such as the car breaking down) is the straw that breaks the camel's back.

A small emergency can lead to a debt domino: they fix the car, miss a mortgage payment, and then spiral beyond simple solutions like saving or cutting back.
Take Action!
Try out YNAB. You can get a free trial at YNAB.com. The software is pretty cheap to buy.

Audit all subscription payments

This is a minor but very effective way to get out of debt.

A few years ago, I took about two hours to look at all automatic and subscription payments. These are things like your Netflix subscription, that website domain you renew every year, your cable bill, and any other software or entertainment packages you buy on a monthly basis.

It seems minor but you would be surprised at how much you are paying on a yearly basis.

Subscription companies try to slip beneath the radar. This is why they charge $5 or $10 per month. They are in it for the long term: $10 for three years is $360.

Audit everything and cut ruthlessly. Put the money you save towards your debt. Lately, I've been noticing these subscription fees adding up again (I love buying software and online tools!) so I need to do another audit.
Take Action!
Spend an afternoon auditing automatic payments and subscriptions.

Cut anything you don't use and call your bank if they are charging you a bunch of fees to see how they can help.

Use Mint.com to audit bank fees

While I don't like Mint.com for tracking my spending, I do like that the software sends you an email every time a bank charges you a fee.

I always assumed that I never spent much on bank fees. According to Mint, last year I spent over $300 in personal banking fees!

Most of these were due to email money transfers that I use ($1.50 per transaction). Mint also lets you set-up basic budgets and then notifies you when you exceed spending for that category. This can be revealing.

For example, set a budget for bank fees (what you think you are paying) and Mint might surprise you.

Audit your bank fees and take action.

Either find a new bank or look for alternative solutions (for example, now I try to transfer money from PayPal as its free). It's important to recognize a pattern. Small thoughtless spending is money wasted.

Schedule regular money reviews

Every month, you should sit down for about 15-20 minutes with your significant other.

The goal of the session is to answer one essential question: Are you spending more than you earn?

Review the month's spending and compare that to your income.

If you can't answer that question, you are really in trouble and need to work harder at your finances.

Face the ugly truth about interest

Gail Vaz-Oxlade has a great tool on her site that lets you calculate how long it will take to pay down your debt.

It lets you input your principle and interest rate.

The tool will then show you how long it would take to repay that debt based on different time periods and monthly payments.
Take Action!
Spend a few minutes facing the truth about how long it will take to pay down your debt with Gale's debt worksheet tool.
Calculate how long your debt will take to repay.
Carry a money notebook

For a while I looked for cool apps and software to track my spending. But this is all just a distraction.

The thing that prevents most people from tracking their money isn't a lack of technology. It's a lack of making it a habit.

Every smartphone has a basic notebook. Create a page for each week and write down what you purchased immediately after buying it.

At the end of the week, review how your spending went. I like doing this on a weekly basis as it helps you reach your monthly goals.

A month is a long time and it can feel like you only bought lunch a few times at work when really you are spending $50 a week that could go to debt repayment.

Break the Debt Cycle by Planning Ahead

Start an emergency fund

It might seem counterintuitive but if you come into extra money (tax return, rebates, or some overtime pay), you should use that money to build an emergency fund first and then pay off your debt after that.

Saving while being in debt can seem impossible. Yet, debt is a cycle and unless you move to fix your cash flow problem you will always fall victim to high interest and the mercy of your creditors.

You need to save, even when in debt. Every family needs an emergency fund.

Begin with a very modest goal such as $500 and start by saving $50 per month. I know that it's tough. But every penny you save is helping your future self and making your ability to deal with unexpected expenses easier.

In the video below, John and Jennifer Croft from our Calgary office explain a very important concept about debt management.

It's a complete mistake to dedicate 100% of your cash flow to debt repayment. Instead, you need to make sure that your own needs are taken care of and that you are working towards building a solid financial foundation for your family, instead of just working for your creditors.
Take Action!
Set up an automatic savings account with Tangerine.

Even if you only contribute $20 per month, it's the habit that counts. Start building your fund and don't stop until you have at least 6 months of living expenses covered.

As John and Jennifer Croft pointed out in the above video, it might seem counterintuitive to not dump all your extra cash into debt repayment.

But if you cripple your cash flow and dedicate 100% of your money into debt repayment, you'll be very vulnerable. You need a long-term solution to debt.

Don't overpay your debts

As mentioned, you really need to rewire your financial thinking.

The fastest way to get and stay out of debt is to make sure that you are setting yourself up for the long-term. It's important that you don't overpay your debts - leave enough so you have enough for regular expenses too.

Building up a healthy emergency fund and improving your cash flow helps to break the cycle and gives you control over your finances.
Take Action!
Whenever you have extra amounts of cash, consider adding the money to your emergency fund rather than paying down debt.

It will give you peace of mind and a better foundation to change your finances in the long term.

Never pay a short-term expense with long-term money

If there was a golden rule for avoiding debt, this principle would be a contender.

I know! I know! It's really hard not to touch that emergency fund or to drain your savings. But you have to be strong a find a different way to pay for short-term expenses.

Don't pay off your credit card balance from the emergency account.

Don't drain your savings when things get tough.

Don't touch long-term money (your emergency fund and any retirement savings) and pretend it doesn't exist.

Money is a habit.

And there will always be short-term expenses and periods when you spend more than you make. But if you always rob your savings, you will be perpetually setting yourself up for failure.

Reduce Your Interest & Consolidate Debt

How to consolidate your debt

It is incredible how little most Canadians know about debt consolidation.

You are completely foolish if you believe the PR that consolidation companies will rip you off or that the only way to get out of debt is to pay your creditors every penny you borrowed.

Like anything, there are scammy debt consolidation companies that will charge you upfront fees and rip you off. And there are ethical companies with an excellent track record.

It's your responsibility to research your options and educate yourself about the debt industry.

If you are deep in trouble, debt consolidation or transferring your debts to a single lower interest credit card is a very sensible route.
Take Action!
Here is a guide to debt consolidation that every Canadian should read.

Get an expert to calculate the long-term impact of interest

The key to getting out of debt is to do the long-term financial analysis. How much will you pay in interest if you continue down your current path?

By focusing on the long-term, more options will appear. For example, it might be prudent to take out a line of credit on your home to pay down your credit card.

Or you might be wise to sell your home, rent for a few years, and then buy again once the debt is wiped. If you are thinking about debt consolidation (see the last tip), you should make sure that this just won't lead to more debt.

For example, if you consolidate your debt and then continue to use your credit cards you could end up right back where you started.

Debt consolidation can reduce your interest but if you still have a cash flow problem you'll just end back in debt.
Take Action!
I recommend speaking to an expert to see if you can consolidate your debts . . . and let them do long-term calculations.

They might advise you to sell an asset or other advanced techniques.

The best way to find an expert is to just do a Google search in your city.

You can see a list of our experts across Canada here.

Or request an informal assessment about how much debt you could restructure here.

Chapter 5: travel the frugal route

Meet the effective fiscal fast

This is my all-time favourite way to reduce debt.

A fiscal fast is a period that you freeze all spending. Yes, everything. Not even a dollar leaves the home. This excludes regular life expenses of course like your mortgage or electricity bill.

Here's how it works.

Pick a time period. For example, 7 days. Make sure you've gone shopping for basic things like toothpaste and milk before the fiscal fast officially begins.

Now, here's the fun part. At dinner or while driving the children to school, yell "I DECLARE A FISCAL FAST."

For the period of 7 days, you can't spend anything. Not a coffee, a carrot, or 25 cents for a gumball.

If you are deep in debt, fiscal fasts should be done regularly such as once per month.

They help you control your spending, freeze any money going out of the door, and give you more money to put towards debt reduction.

Use Gale's magic jars

If you want to give yourself a fool-proof way to make sure that you stick to your budget, I recommend using Gale Vaz-Oxlade's magic jars.

They help you make sure that you don't exceed your grocery and entertainment budgets and easily track your spending over the week.
Take Action!
For the extra frugal people, I recommend that any extra money leftover in a jar you put immediately towards your debt.

Gale says that you are allowed to transfer money from one jar to another, but I'd put that extra money straight towards your debt.
Read how to use the Magic Jars here.
Buy a French press for work

It was a nice ritual. Around 2:00 PM, I left the office and walked to the coffee shop.

It started out a few times per week. And then became a daily habit. I did the math. $4 per day is $20 per week.

That means in a given year, I would spend $960 on coffee. Instead, I bought a portable French press and make coffee at work.

Only shop for groceries once a week

For years, I would stop at this terribly expensive yet convenient grocery store by my house.

It was so close that trips became more frequent, up to 3 times per week.

Find the best and cheapest grocery store you can and shop for groceries only once a week.

Bring a list and try to plan your meals. The better food and meals you have at home, the less you'll be tempted to eat out.

Eat before you leave the house

Protein bars and shakes are great for saving money at work as they can replace your lunch or breakfast.

They are also great for saving money from your entertainment budget. Before I go out for drinks with friends, I always eat a protein bar or have a shake.

This helps me avoid the temptation of buying a fatty dinner at the restaurant (I can just order a cheap appetizer to fit in) and keeps my restaurant bills low.

Chapter 6: increasing your income

Earn more ... as simple as that

I know people hate to hear this. But if you are in debt, you need to earn more money.

Even $200 more per month can really help with debt repayment. This is the least used of all the techniques in debt reduction.
Take Action!
There are lots of options for earning extra money to put towards debt. Here are a few things I've done or heard about.
Board a dog at your home.
If you have a dog like I do, you can take care of people's dogs while they go on vacation. I recently paid a dog sitter $350 to look after my dog while out of town. The same goes with cats. Just post your profile on Craigslist and spread the word through your friends.
Rent your house out on Airbnb.
I don't like the idea of strangers in my house either. But Airbnb is very safe and you can vet the people that stay. If you are leaving town or going on a summer camping trip, this can generate some passive income.
Share your talents.
You can tutor, teach guitar, or give classes on your skill. I charged $30 per hour as a tutor and it's a good job to do after work.
Get a part-time job in retail.
Working a few Saturdays every month can make a big difference.
Look for seasonal work.
I have a friend that makes over $25 per hour at Christmas time working casually for Canada Post. Every industry has their busy season and you can pick up some extra cash to pay down your debts.
Build an asset.
Sites like Skillshare.com let you teach courses to people. It's a great platform and a lot of normal, ordinary people are making good money. Know Excel? People will pay for that. Are you a decent photographer?

People will pay to learn about basic techniques. Go browse some of their popular courses and then create your own. If you have a more advanced skill to teach, try Udemy.

Chapter 7: little known ways to get out of debt

Pick up the phone

One thing that people rarely do is to call their creditors. You would be surprised at how much money a single phone call can make.
Call your lender
I used to pay my student loan payments every month. It was how the default setting was created and the lender pulled it from my account automatically.

Then one day, I called the lender. "Can I pay bi-weekly instead of every month?" I knew you could do this with your mortgage, but had never been offered it with your student loan.

The answer was yes. That simple call saved me thousands of dollars in interest and got me out of debt faster.

Yet, millions of other Canadians blindly pay their student loan at the end of month.
Call your credit card
Ask your credit card for a lower interest rate. If the first person you talk to can't help you, ask to speak to their supervisor.

If they say no, tell them that you are going to transfer the amount to a new card. If you have a good record of paying on time, they may be willing to reduce your interest rate to keep your business.

Call your bank Call your bank and tell them you are sick of their fees. Then be quiet. They will help you. You can also ask them to refund NSF fees when a payment bounces.
Call your cable & smartphone provider
Tell them you want a lower rate. If they don't budge and you don't have a contract, tell them you are closing your account and moving to a competitor.

I did this and they didn't budge. So I went with a competitor and went from paying $70 per month for my cellphone to $44 per month. I notice absolutely no difference in the coverage.

Over a five-year period, that call saved me $1560 on cellphone bills.

Chapter 8: mortgages & debt

Look for small overpayments

You should review your mortgage payments to see how much you are paying.

If you are kicking in an extra $30 per month and are at beginning of a 25-year mortgage, that extra money would be better spent on a high interest debt.

It's always a good idea to pay off your mortgage faster but if you are paying 19% interest to a credit card you need to readjust your strategy.

Given that credit card debt takes much less time to pay down than a mortgage, you can switch back after your high interest debts have been dealt with (see my next tip).

Choose an accelerated payment frequency

If you have paid down your high interest debts, then you'll want to start paying down your mortgage faster.

An accelerated weekly payment is a good way to go. Since you end up making an extra payment directly against your mortgage each year, you'll save $70,003.63 in interest over a typical amortization period.

Shorten your amortization period

When you shorten your amortization period, you'll have to come up with more money for each payment but in the long term you'll pay less in interest.

If you shorten a 35-year amortization to 30 years, you'll save $55,430.90 in interest. Go with a 25-year amortization and save $108,345.42.

This should only be done once you've wiped out your unsecured debt and credit cards.

Make a principal prepayment against your mortgage

Most mortgages allow you to make an annual prepayment each year. This means that every cent goes straight to your principle.

It can be an excellent use for your tax return or any unexpected bonuses. Even small prepayments can save you a lot of money in interest.

For example, if you contributed a $3,200 tax return to your mortgage each year you'd save $112,348.58 in interest on a 35-year mortgage.
You can use this mortgage calculator tool to play around with prepayments to see how much money you'll save.
Chapter 9: debt settlement & restructuring

Start with these helpful articles

People get professional opinions for investing tiny sums of money but when it comes to owing $50,000 they just plug along.

Did you know that there are legal, government sanctified, and completely helpful ways for people to restructure their debt?

Every Canadian has options. It's your duty to speak to a professional and educate yourself.

So where to begin?

Well, if you are a do-it-yourself type person we've covered many of these debt reduction options in the following articles.
Debt consolidation versus a consumer proposal-what's the difference? The complete guide to debt consolidation A guide to avoiding bankruptcy for Canadians "I can't make my student loan payments"-advice for those deep in education debt
Get a professional assessment of your debt situation

Your job is to educate yourself.

If you are carrying a large amount of debt, speak to a professional. You can find experts by searching in your city.

We also have offices across Canada, which you can talk to on the phone, email, or meet in-person.

What does an expert know that you don't?

They will teach you about debt restructuring options such as debt consolidation, consumer proposals, informal proposals, and how to approach your creditors with a restructuring offer.

They will also be able to analyze the type of debt you carry and educate you on the right choice for you.

You can sometimes reduce your debt with restructuring. For others, bankruptcy might be the right choice.

Here's a list of our offices in your city. Ontario
British Columbia Alberta Manitoba
Saskatchewan

Quebec

And finally, here are real stories about debt from Canadians who survived their financial crisis.

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The 50 Best Ways to Get Out of Debt in Canada

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If you are tired of the standard debt advice (cut expenses; live like a monk), you're in luck . . . . . .because today I'm going to share a huge practical list of the absolute best ways to get out of debt.

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Although I had to look up a few technical terms while listening to this video, I found the subject to be rather interesting. From what I gathered, our government is pumping “easy-money” into the economy to try and fix this debt trap with the housing market. To most people that aren’t financially literate, it seems like a good fix, but this is only worsening the problem. We can’t lower interest rates because there’s nowhere to go, but we also can’t increase the rates either.

I chose this video because it shows that a debt trap doesn’t necessarily have to be a predatory thing from some company trying to rob you of your money—it can be a systemic problem that affects homeowners across the nation.

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The Debt Trap & What it means for Canadian Real Estate

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This video is interesting because it relates to a previous topic we covered in the course—car loans. To summarize the video, what lots of car dealerships are now doing to get more sales is they’ll loan you a car with a lower rate, or even no interest at all. The loan, however, will be over an insanely long period of time, usually 7 years. This means you usually end up with negative equity, and you end up owing more than the car is worth.

I chose this video because it shows how easy it is to fall for a scheme/trap like this, and how if you aren’t informed you could easily get in debt.

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Are car dealers driving you towards deep debt? | CBC Marketplace

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One of the most interesting things we learned in this assignment was talked about in video #1. Credit cards will target people who they feel can only pay back the minimum, as the earns them the most money from the interest.

After learning about the fact that credit cards target young adults, I came to realize the I myself have been a victim. I was offered a 2000-dollar limit credit card right out of university which I promptly spent right through and even to this day I still carry some of that debt! I have learned to be wary in the future.

I would most certainly let any younger family member to be wary of credit cards and banks. Even if they offer you something under the premise that it will help you, you must remember that they look out for themselves first and foremost. Do your research before you jump into any kind of debt.

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Greetings and welcome to our padlet! Our names are Connor Kelm and Rob Lyons and we have chosen debt traps as our subject. You can expect to learn how to identify debt traps and if you are already in one yourself. You will also see some strategies for overcoming and avoiding these traps. Enjoy!