Credit Card Debt & Payday Loans FAQ

Credit Card Debt &
Payday Loans

Misfortunes can strike anyone even when less expected. Sickness, losing your job, and natural disasters are some of the major causes of financial distress. These scenarios can make you turn to payday loans and other forms of credit to help solve an immediate financial issue. Here are some frequently asked questions regarding credit card debt and payday loans.

Credit card debt

handling credit card debt

1. When do I need help when handling credit card debt?

You should seek help when you find you are making only the minimum payment regularly or paying your credit card bills frequently after they are due. If credit cards are your primary source of finance, consider filing a consumer proposal. This will help you get debt consolidation Toronto.

consumer proposal

2. How much credit card debt do I need to file a consumer proposal?

You should have between $1,000 and $250,000 amount of unconsolidated debt. Once you file a consumer proposal, get a Licensed Insolvency Trustee to negotiate the debt repayment.

Payday loans

1. What’s the highest amount can I be charged for on a payday loan?

In British Columbia, Saskatchewan, and Alberta you can be charged a maximum of $23 per $100 (borrowed). In Manitoba, the maximum amount charged for a payday loan is $17 for $100 borrowed while in Ontario the maximum amount is $21 for $100 borrowed.

The cost of borrowing in Nova Scotia is $22 for $100 borrowed. Fortunately, in the provinces of New Brunswick, Labrador, and Newfoundland no interest rates regulations have been set. Therefore, the restriction is up to the interest cap set by the federal government of 60% on a payday loan annually.

2. What is my right? Is there a way I can protect myself from payday loans malpractices?

It’s important to check your province’s laws that govern the payday loan industry to learn more about your rights. This information is available online. If you find yourself in a never-ending cycle of payday loan payments, seek help from a Licensed Insolvency Trustee.

Income tax debt

1. Is it possible to set up a payment schedule independently with the CRA (Canada Revenue Agency)?

You can qualify to enter into an agreement with the Canada Revenue Agency to create a payment schedule. This will allow you to make smaller payments over a specific duration until you clear your debt.

2. What will happen if I don’t clear my tax debt?

The CRA can take various actions against you depending on your tax no-compliance case. These actions include seizure of your bank accounts, wage garnishment, seizure or sale of your assets, and registering on your home.

Student loan debt

student loan debt

1. Can I include my student loan debt in a bankruptcy or consumer proposal before the seven-year mark?

According to the Bankruptcy and Insolvency Act, student debt can’t be discharged for at least 7 years before he or she ceases to be a full-time or part-time student. However, you can benefit from provisions. You can also use a consumer proposal to consolidate all your unsecured debts. This will leave you with more money to repay your student loan.

student-loan-bankruptcy

2. What’s the hardship provision?

In case you have been bankrupt, and it’s been five years or more since you ceased to be a full-time or part-time student, you can apply to the court to have your debt discharged under the hardship provision. Check the government of Canada’s website to learn more about the hardship provision.

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