Category: Credit Counselling

Reverse Mortgages

Posted on by Jordan Rumanek

bankruptcy_mortgageReverse Mortgages

A reverse mortgage is a home loan for individuals or couples 55+ years or older. You borrow from the value of your home and does not require monthly mortgage payments. However, interest is added to the loan’s balance and if no payments are made the interest can eventually exceed the value of the home. Reverse mortgages are risky and you need legal advice before considering this even as an option.

Advertising makes a reverse mortgage sound attractive because they push 4 points of interest:

1. You don’t have a monthly payment until you move.

2. You can receive a lump sum of money if you’ve paid off your home—sometimes 50% of the value of your home.

3. If you are house poor, you have extra cash money—you can use the money for healthcare needs or home repair and living expenses.

4. Tax-free source of income

However…

Interest on the reverse mortgage increases which in turn decreases the equity you have in your home. The interest can sometimes increase to more than the house is worth and there are higher interest rates than most mortgages.

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.

Top 15 Financial Tips to Teach Kids

Posted on by Jordan Rumanek

debt-septTop 15 Financial Tips to Teach Kids

Our children and grandchildren are our future and what better gift can we give them than the gift of financial literacy. We need to teach the next generations about money: how to save, how to think about spending, how to budget, how to think about their financial future and who to go to for extra financial advice—when the time comes. Children need to understand the practical basics of money and develop a positive relationship with money in order to help them achieve what they want.

Here are a few tips to help parents get started:

  1. First, know that parental involvement is key in children’s financial success
  2. Teach children the value of money, how to earn money and how to budget
  3. Do not spoil your children regardless of your income
  4. Do not pay for whining or crying children
  5. Do not always say no!
  6. Discuss your family budget openly and often
  7. Open a bank account for your child
  8. Develop the idea of quality over quantity
  9. Develop the notion that you can’t always get what you want
  10. Teach young children how to count change and introduce and explain tax
  11. Have a family discussion about allowance: Is it necessity?
  12. Teach the “Pay yourself First” lesson or let them read: The Wealthy Barber
  13. Introduce the idea of Good vs. Bad spending
  14. Discuss the true nature of Credit Cards: Pros and Cons
  15. Introduce the idea of charity and why people give to others—if possible

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.

Can a Senior File an Assignment in Bankruptcy?

Posted on by Jordan Rumanek

Just because you are over 65 years old does not mean you cannot file an assignment in bankruptcy. If you are unable to pay your debts as they normally come due, the debts total more than $1,000 and your liabilities are greater than your assets – you have passed the test of insolvency and are entitled to file an Assignment in Bankruptcy. The question then becomes – should you do so. If your income is only from Canada Pension or Old Age Security, you are protected as these cannot be seized or garnished by a creditor.   Note that once your pension is deposited to your bank account, it becomes co-mingled with other monies and loses the identity of its origin. Your bank account could be garnisheed regardless of the source of the money. Therefore, never give a creditor information about where you bank.

The biggest reason why seniors declare bankruptcy is to stop the harassment of telephone calls and letters from collection companies and creditors. The bonus is that no creditor is allowed to start a lawsuit or continue one (if they have already started) as of the day you file the Assignment in Bankruptcy.

 

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.

Financing a Consumer Proposal

Posted on by Jordan Rumanek

Financing a Consumer Proposal

Well, it happened. You racked up a lot of debt and you now have to deal with it. You haveliving-on-a-budget decided that you are capable of making a settlement with your creditors by offering to pay a portion of your total debt over a period of time (usually 60 months with no interest) using a Consumer Proposal. At least, you can avoid bankruptcy.

Setting up the Consumer Proposal is done with the assistance of a Licensed Insolvency Trustee (formally called a Trustee in Bankruptcy) or some other qualified person. They will review your assets, liabilities, income and expenses to come up with a plan that your creditors will be likely to accept. Beware of anyone who advertises that they can reduce your debts by “up to 80%” before they meet with you and review your specific situation.  Sometimes, you might be able to make a small down payment using money in an RRSP, cash surrender value of life insurance, etc. Sometimes, your budget is not stable because you only have full time seasonal work. Construction workers, roofers, road pavers, usually only work 8 or 9 months per year and it is common to structure their Consumer Proposals over a 60-calendar month period (the maximum allowed by law) but only require that monthly payments only be made in 8 specific months each calendar year. You might also have a steady job and be able to make payments for all 12 months each year. You might want to pay off the Consumer Proposal faster than the 60 months in order to assist you in rebuilding your credit faster and cleaning up your credit report. No problem – simply put a clause into your proposal that allows you to do this at your option at any time with no advance notice or penalty of any kind. The creditor will always agree as they may get their money sooner than they expected.

A Consumer Proposal is not for everyone. But if you wish to customize it to meet your specific situation, if can be done.

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube  Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.

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