Posted On: August 9, 2019

Is it possible to save money when you are broke and a big chunk of your income goes towards paying monthly expenses and dealing with debt? Saving money even while you are getting out of debt and have a low income should not be as difficult as many people think. Of course, you will need to make a few changes to how you currently do things, like following a strict budget and really making an effort to live within your means, but those changes don’t have to be overly radical in that you deprive your family and yourself too much that you can no longer live a decent lifestyle.

Here are some strategies to help you do this the right way:

Make a budget

To be able to save money when you are broke, you will definitely need to start paying attention to how you spend every dollar because the little things that you do day-to-day matter a lot! It’s all about taking control of your money and your financial situation and in order to have that power you need to know where each penny goes. When you are aware of this, it will enable you to make the right decisions on how you spend. Creating a monthly budget is the single most effective way to help you keep track of your spending and savings. Budgeting and savings apps will make this task easy for you as they can help you manage your finances on the go direct from your smartphone. No need to log in anywhere else or bring out a pen and paper. Some popular apps you can try out are: Mint.com, Receipts, Debt Minder, Debt Manager, iExpenselt, and many others. Choose one that best suits your budgeting and money management needs, and really be disciplined to make it work for you. Set aside the time each day or week to look at your app and keep an eye on your spending activities, this way you will really see results.

Make adjustments on household expenses

Once you have your budget set up, you can get to work on making some tweaks to your lifestyle. First thing to look at is if you are spending your money on what’s necessary like grocery, water bill, electric bill, gas, etc. Then, make adjustments and cut back on some things.

• Reduce your water usage. Small things like taking shorter showers, installing low-flow faucets and shower-heads, installing a rain barrel and other unwasteful ways will not only bring lots of savings on your water bill but you’re also helping to save the environment.
• Look for ways to lower your energy usage every day. Things like lowering your thermostat, running full loads in the dishwasher and clothes washer, opening drapes and blinds during the day to use up solar energy are some sensible options to conserve energy and save cost.
• Find practical ways to save money on groceries. One of the best ways to cut spending on food is to eat out less. Start making little changes like cooking your own meals, bringing your own lunch, making your own coffee everyday instead of dining out at cafes and restaurants and you will find that you can easily save thousands of dollars on your food budget per year.
• Let go of the cable tv and cancel other subscriptions that are not really needed, like your magazine subscription or your gym membership.
• Save on gas bill and transportation costs. This is also a significant expense for most Canadian households, including your own. The cost of gas is expensive and public transport is not free, so cutting down on this expense will make a huge difference on the budget. Consider carpooling or walking or biking, maybe you can buy cheaper gas in your area – use free apps like GasBuddy, Gas Guru or Waze to help you find cheap gas, or try talking to your HR department if they have any programs available that will subsidize the cost of gas expenses or public transportation.
• Quit your bad habits, like smoking cigarettes and drinking alcohol. A smoking and drinking habit is extremely costly. A pack of cigarettes in Ontario, for example, can be from $18.37 a pack. That means you could be spending as much as $569 per month if you smoke a pack a day. To give you a clearer perspective of how much your bad habits costs you, try using this expense calculator to see how much money you could be spending on something else.
• Cut back on shopping. You will pay a lot less, for example, if you shop at thrift stores. You can find a lot of stuff, clothes, appliances, odd items, that have never been used, worn, or even opened. Another great way to save money on shopping is to avail of cash backs where you can get a little of your money back on purchases you make. When you shop at retailers like Amazon, Target, and Starbucks, for example, they can let you earn points for each dollar you spend and also get exclusive coupons and deals.
• Find ways to pay off your mortgage faster. As a rule of thumb, your housing expense should not take up more than 30% of your income. If this is not the case with your household, then you may need to refinance for a lower mortgage rate. Getting that interest rate down will save you money and enable you to use that money to pay off your mortgage faster so you can get out of debt more quickly.

It’s these little stuff in your daily habits that can add up. However, you have to find ways to cut back, even eliminate some things, especially when you are broke and have debts to pay off. If you watch closely what you spend, you will be surprised how much you can save monthly.

Make sure you have enough savings

Regardless of your situation, you have to start an emergency savings account. It is very important to have a little bit of money saved up even when you are paying off a lot of debts. You can start small and maintain that amount until you have a bit of wiggle room. The aim is to save and make sure you have some cash to pay for emergency expenses when they arise. Remember, this money is for emergencies only, so keep it someplace where you can easily access it when you need it but not easily within reach so you won’t be able to spend it spontaneously.

I challenge you to take on a couple of these money saving strategies and maybe find other ways that you can be saving money on a daily basis and then really have the commitment to apply them in your daily life and make them work. You will find that little by little, slowly but surely, you are able to get out of debt faster, your savings account balance will be growing, and you’ll see all your financial dreams come true in no time at all.

Posted On: April 22, 2019

In this video, Sean Killen, President of Richard Killen & Associates Ltd., answers frequently-asked questions on consumer proposals and bankruptcies in Mississauga.

Do you see more consumer proposals or bankruptcies in Mississauga?

Over the history of our office in Mississauga, there are about 60% consumer proposals. People coming into us don’t even want to hear anything about bankruptcy although we are required to go through it with them because it is part of the legalities.

Is there a minimum amount of debt required to be eligible for a consumer proposal or bankruptcy in Ontario?

There is a minimum under the law. The minimum would be $1,000. The law says you cannot declare yourself insolvent unless you meet the criteria of owing more than $1,000.

What’s the average duration of a proposal?

Consumer proposals are designed to be over a 5-year period because that’s the restriction that the law puts. They are not allowed to go beyond five years. However, the person has the freedom and the ability to shorten the term if they want with no interest, no penalties and no restrictions. Although most proposals are designed over five years, they end up paying out right around the four-year mark. Most of the time, after they get over about two and a half years, they start seeing the light at the end of the tunnel and want to pay it off faster. Therefore, they start ramping up their payments a little bit. Furthermore, they have a chance to get reorganized and start realizing the value in getting things out of the way.

What’s the status of the debt during a consumer proposal?

All the debts still exist. The creditors just agreed to sit back and see whether or not you can satisfy the agreement that was made. Ultimately, the final signatures are in place verifying that you have met the terms of your agreement. The debt still exists and can still blow back on you. Every once in a while, we’ll have a file that does that but very rarely will a file ever get past the halfway mark and then not complete. Most files that don’t make it fail in the first year and that’s just because everybody wants to do it but overextends themselves. They don’t properly accommodate to what the reality of their expenses really are. They think they can find money, they can cut back, and they can make this work just so that they can avoid bankruptcy.

If I go bankrupt, can I get a mortgage?

Getting a mortgage is still difficult because your debts still exist. Getting a mortgage renewal is not a problem. We always advise you to look for automatic renewal. You are already in the mortgage and you are already making payments. As long as you have never missed any payments, they’re just going to renew you, anyway.

If I Go Bankrupt or do a consumer proposal, can I get a car loan?

It’s easier to get a car loan while you’re in a proposal as opposed to bankruptcy. However, most lenders don’t really care whether you’re in a bankruptcy or a proposal. They’re just happy that you’re not dealing with outstanding debts and have creditors looming over you. However, you will always have to pay for it with higher interest rates to make sure they make enough money to cover their risks. They’re happy to lend it to you. Their money is in the car and not in you, necessarily. In general consumer proposals in Mississauga are significantly more popular than bankruptcies.

Posted On: March 27, 2019

In this video, Richard Killen, a Licensed Insolvency Trustee in bankruptcy with offices in Durham, and the Greater Toronto area talks about alternatives to bankruptcy for an insolvent person.

People come to see us and the very first thing that comes out of their mouth is “I don’t want to go bankrupt.”

Therefore, alternatives to bankruptcy is foremost in people’s minds when they come to see us.

Bankruptcy is a tool. It is a solution to a problem that needs some kind of a resolution and it’s there to be used as such. When we talk about alternatives to bankruptcy, we look at the idea that if you have financial problems, you ask yourself as to what degree do I have these problems and you start by thinking to define the level of the problem to be able to use bankruptcy as a solution.

There is an insolvent person. Being insolvent, in a legal definition, means being unable to pay creditors at least in the minimum way that they demanded to be paid. If a person is not insolvent, he or she can’t do a bankruptcy because there are other options that are open to them.

When people come to see us, they have already sought other ways of dealing with their problems. They have talked to relatives, friends, banks, and a few people. They are looking for the magic bullet that’s going to solve their problem. If they are insolvent and if they are not able to deal with creditors, they have five options open to them. Option number one, which is often tried by people, is to consolidate debts in to a consolidation loan.

One reason they may have problems is that they have so many creditors and they just can’t keep paying all of them. They have no means to pay for them. But if they approached a bank or a finance company, they might be able to get a loan and pull all those debts into one. Very often in that situation, the one payment you have to make for the bank is going to be less than the total payment of all the miscellaneous payments that you have to make previously. However, if you have trouble and you are insolvent, and chances are you are behind with your payments, therefore you will not be able to get a consolidation loan from a lender.

Assuming that a consolidation loan Toronto won’t work, there is another option. The option would be to talk to the creditors to find some kind of compromise. You must to do this with each one of the creditors because if one or two of them don’t go along with you or with the other creditors, what they can do if you are behind your payment is that they can mess up your plans by suing you.

Between the consolidation and the renegotiation with the creditors, we call these things the commercial options because you don’t need a guy to help you with that. What you need is to find a lender or you need to make a deal with your lender. However, if they don’t work, then you’re probably going to look at the legal options that the trustee can provide.

That’s why people come to see us. They know that the first two options that I was talking about are no longer available, so they come to the trustee. The trustee will offer them and provide them options. One of them is the proposal which is an alternative to bankruptcy.

When you’re doing a proposal, you are getting all the protection that the bankruptcy process offers you, such as putting a stop to creditor pursuits and creditor harassment. If you are to do a proposal, which the vast majority are now calling a consumer proposal, you are going to essentially make a deal with your creditors. Instead of having a one-on-one with them like in Option Two that I have mentioned, you can make a deal with your creditor all in one. The negotiations are with the group and are usually done by a trustee. Therefore, there’s quite a load off your mind and off your stress level.

If the creditors agree, then you have taken all those various debts and consolidated it into one payment every month. You make the payment to the trustee and the trustee distributes the money to the creditors in accordance with whatever arrangement that you and the creditors agreed on.

Not everyone can make a proposal. Some people don’t have the means to do it. They don’t really have anything to offer. But it’s surprising that some people come here and when they have heard the proposal, they feel that they don’t have the means to do it. They do not believe they can offer anything that the creditors would accept and in many cases they do.

The creditors have decided that it’s better to go on to a proposal than to force people to end up to bankruptcy where very often, creditors get nothing or next to nothing.

Are there alternatives to bankruptcy? Yes. There are a lot of alternatives. Most people have looked at them to some extent before they come to see us. When they come to see us, we are going to make sure that they do know about all the other options. Quite frankly, if somebody can avoid bankruptcy as far as I am concerned, that is a good move.

Posted On: November 20, 2018

On October 26, 2018, Richard Killen, Bonnie Bryan and Michele Meitz attended the 3^rd annual 2018 Insolvency & Restructuring Exchange in Toronto.

This is the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) largest one day event of 2018. Almost ninety percent of Licensed Insolvency Trustees, licensed under Canada’s Bankruptcy and Insolvency Act are members of CAIRP.

CAIRP was created as a non-profit corporation in 1979 to advocate a fair, transparent and effective system of insolvency/restructuring administration throughout Canada.

This event is the best place for professionals from consumer and corporate restructuring practices to network and learn together.

We were glad to get the opportunity to meet and hear from fellow CAIRP members, lawyers, members of the judiciary, lenders and government officials as part of the days events.

Posted On: July 6, 2018

In this video, Richard Killen, a Licensed Insolvency Trustee in bankruptcy with offices across Toronto answers the question.
I don’t know how many times I have been asked by somebody during the course of the free consultation we provide to consumers at the beginning. What do you think, should I go bankrupt?

My answer is always the same for people. Its not up to me to tell you to go bankrupt.
Bankruptcy is a personal decision. What might work for one person, might not work for another person. Although what you can get from a trustee is a good idea of what is going to happen if you do a bankruptcy opposed to a consumer proposal.

So to answer the question, should I go bankrupt? My answer is you need to decide that.

Posted On: July 3, 2018

In this video, Richard Killen, a Licensed Insolvency Trustee in Ontario with offices in Durham region (Pickering & Oshawa) talks about whether a person’s income tax debt can be included in a personal bankruptcy in Ontario.

Something that comes as a big surprise to a lot of people is when they find out an income tax debt, an ordinary income tax debt is something that is dischargeable in a bankruptcy or can be taken care of in a consumer proposal. The people of Durham or people from across the Greater Toronto Area ask me that question numerous times. It is not a strange thing as ordinary income tax debt is treated as a debt.

There is nothing special about the fact it is a debt owed to the government. A debt to the government is not anything special in a bankruptcy situation. Therefore, in a bankruptcy in Durham or anywhere in Ontario, a tax debt is dischargeable.

If you are behind on your taxes or are have other debt problems, consider talking to one of our trustees and debt experts. We can help you review all your options for debt relief.

Contact our Durham office us for a fresh start at (905) 420-6565

Posted On: June 30, 2018

In this video, Richard Killen, a Licensed Insolvency Trustee in Ontario with offices in Durham region (Pickering & Oshawa) talks about whether a person’s income tax debt can be included in a personal bankruptcy in Ontario.

Something that comes as a big surprise to a lot of people is when they find out an income tax debt, an ordinary income tax debt is something that is dischargeable in a bankruptcy or can be taken care of in a consumer proposal. The people of Durham or people from across the Greater Toronto Area ask me that question numerous times. It is not a strange thing as ordinary income tax debt is treated as a debt.

There is nothing special about the fact it is a debt owed to the government. A debt to the government is not anything special in a bankruptcy situation. Therefore, in a bankruptcy in Durham or anywhere in Ontario, a tax debt is dischargeable.

If you are behind on your taxes or are have other debt problems, consider talking to one of our trustees. We can help you review all your options for debt relief.

Contact our Durham office us for a fresh start at (905) 420-6565

Posted On: June 27, 2018

In this video, Richard Killen, a Licensed Insolvency Trustee in bankruptcy in Scarborough Ontario talks about the minimum requirements for personal bankruptcy in Ontario.

I often am asked by people in Scarborough, what is the minimum debt before I can declare bankruptcy in Ontario? Many people feel that if they do not owe that much, perhaps its too low to get a trustee involved.

Legally, whether it is in Scarborough or anywhere else in Ontario, the minimum you must owe is $1000. Of course there are other qualifications as well. However as far as the actual amount it is only one thousand dollars. Therefore, as long as the amount you owe is greater than the minimum, you qualify to use the bankruptcy act.

We welcome any questions you may have on bankruptcy, debt counselling or consumer proposals in Ontario.

Contact us for a fresh start (416) 285-9511

Posted On: June 14, 2018

Sometimes I get asked by people who have recently filed personal bankruptcy whether or not they can cancel their personal bankruptcy in Ontario. Perhaps they have changed their mind and are wondering if their bankruptcy can be canceled?

The short answer is no, the bankruptcy cannot be canceled once it’s filed in the courts and the federal government has issued a number. It’s an official legal process and it’s not going to be canceled outright.

There are different ways to end a bankruptcy and there are ways that a personal bankruptcy in Ontario can be annulled and canceled in a legal way. However, you cannot just change your mind and decide “I want my bankruptcy canceled”. The legal system in place does not work that way.

One of the main reasons you sit down with a Licensed Insolvency Trustee is to go over all your options for debt relief. Usually, personal bankruptcy is the last option considered for debt relief, however, should bankruptcy option be chosen by the consumer, it was likely the best option at the time considering all factors.

Should your circumstances change after filing and you would like to reconsider your options, one of our Trustees would welcome an opportunity to discuss your options.

We can meet with you during business hours or book after hours appointments if that is more convenient for you. Contact us at (888) 545-5365.

Posted On: April 27, 2018

In this video, Richard Killen, a Bankruptcy Trustee in Toronto talks about, the effect of your bankruptcy or your wife or husband’s assets.

I am often asked is “Are my wife’s or husband’s assets be affected in any way?”

Generally speaking, the way bankruptcy works, the answer is no. Your bankruptcy will not affect your spouse.  If an asset is not commonly owned or jointly owned by both you and your spouse, then their assets are not affected.

Watch The video for more information.

If you are having debt problems and considering bankruptcy or a consumer proposal, you should definitely visit a licensed bankruptcy trustee in Toronto so that you will be provided advice about your options to consider for debt relief.

Contact us for a fresh start 1 (888) 545-5365

It may be the most stress reliving call you make!