Frederick & Company Ltd.
63, 201 Kaska Road T8A 2J6 Sherwood Park, AB, Canada

There are a lot of numbers flying around this article but here is a simple way to think about it. If the average Canadian owe $1.71 for every dollar earned annually what that means is someone earns $66,000 a year -$49,500 after taxes are taking into consideration - and owes $84,645 in consumer debt. In order to be debt free in 5 years they would have to pay $2,652.47 each month (assuming a blended interest rate of 8%). They have $4,125 income available and after debt repa...yment $1,472.53 is left in the budget for monthly expenses. If you know an average Canadian who needs to get out from under the burden of their debts please have them reach out to us. We are happy to crunch the numbers and discuss restructuring options. https://www.cbc.ca//busi/debt-to-income-statscan-1.5837463

We am worried too about the cost of deferring debt and how that will impact people's ability to manage their debts. If you are struggling let us help crunch the numbers with you - call us at (587)269-3009. "André Bolduc, executive board member of CAIRP and Licensed Insolvency Trustee, is concerned about the ability of households to manager compounded debts with some 3 million having accepted deferrals since the pandemic began and new credit. The accumulation of arrears the...se additional lockdown debts can drag lower-income families under, particularly if creditors start trying to catch them up on payments, he said. For example, when an individual gets a three-month minimum payment deferral on their credit card, interest continues to accrue. When payments restart, the minimum payment will be higher due to the additional accumulated interest." https://www.wealthprofessional.ca//canadians-at-ris/336045

We are in the Christmas Spirit and looking to inspire! We are going to share some really amazing client stories and share some testimonials as the feature presentation for the BNI Aviators - Alberta, Canada AN the Wednesday. Join us if you can!

Our professional association CAIRP has a great free webinar regarding seeking help with debts. Check it out if you want to know more about getting help with your finances. https://fb.watch/1XGpvsvK7N/

Consumer debt loads are down as a result of the pandemic. It would be interesting to hear from you - how have your spending habits changed since the pandemic and you do want to make any lasting changes to your spending habits moving forward? https://www.cbc.ca//busine/consumer-debt-equifax-1.5613674

It is not surprising that many people have had to lean on credit in these unprecedented times. Today is a great day to review your credit and make sure your debt management is moving you towards a future without debt. Instead of reducing your cashflow by paying interest - once you are debt free - you can use extra money can build up your net worth. Pay your debts at the end of each month and track the total amount owing over the next 3 months. If you see that your total debt...s remain the same then review of your cashflow to see if you can put more money towards to your debts or come see us and we can crunch the numbers for you. There is no cost to come in for a quick chat to crunch some numbers - give us a call at 587-269-3009 to book a time to chat. https://www.cbc.ca//busin/statistics-canada-debt-1.5609510

I would agree with this article. I think people right now are focusing on surviving these uncertain times - once we know what the fallout will really look like there will be undoubtedly some people needing help. If this is you - what do you do? I would suggest knowing is better than not knowing for a couple reasons: 1. it feels better to feel certain about the future (even if it is not the best outcome) than feel the weight of uncertainty where you don't really know what to d...o. 2. By getting educated now - when you don't need a restructuring like bankruptcy - it will give you an opportunity to understand what that worst case scenario looks like. This may help you find a solution that doesn't include bankruptcy because the sooner you are focused on finding a solution the more options you have available to you. 3. Becoming fully informed allows you to make informed decisions - let me give you an example. Did you know in bankruptcy you can keep all of your RRSPs? Did you know that Canada Revenue Agency will settle (you only pay a portion of what is owed) personal and corporate tax debt in a bankruptcy or a proposal? Do you think knowing about this it would change someone's mind about liquidating their RRSPs to pay down Canada Revenue Agency? I think this so. There is a lot to know about insolvency (bankruptcy and proposals) that may apply to your unique situation - getting informed can help you make sound informed decisions about how to get moving forward and either affirm you are on the right path or it will give you other options to consider. We are here to educate. We are here to empower. We are here to help. If we can help you please reach out to us at 587-269-3009 https://ca.finance.yahoo.com//record-low-insolvencies-in-c

Do you feel like your debts have crept up on you and now the amount you owe is overwhelming. Check out our blog to find some solutions. www.fcdebtfree.ca//boiling-frog-phenomenon-and-debts-do-yo

Let's talk joint debt. Joint debt is treated differently than joint assets. Joint assets are split 50/50 - if you have joint ownership of a house with someone you have one-half interest in the house and the other person has interest in the other half.... With joint debts it is different. You share full responsibility of the joint debt: 100/100. You owe 100% and your co-signor shares 100% of the responsibility. You are probably thinking well that is 200% and that isn't fair! Well the bank cannot take 200% they can only take the first 100% that comes to them but they have two people that can try and collect from which is why they love co-signors. This is an important consideration when signing up for joint debt and also when you are trying to deal with joint debt if you are struggling with managing your debt. If you have any questions about this please reach out to us at 587-269-3009 - we are happy to help!

"The takeaway is your bank’s fine, and prepared for increased delinquencies. The bad news is your bank is expecting a lot of people won’t be able to pay their bills." I think it is reasonable this whole situation may have turned peoples' finances upside down. I hope that you will be okay but if you need to chat please don't hesitate to reach out to us at 587-269-3009 or check our our website fcdebtfree.ca https://betterdwelling.com/canadas-big-six-banks-set-aside/

In the time of COVID-19 our health is being challenged. Mental health, physical health, and financial health. We help people with their financial health relating to their debt management. Financial health is more than just debt management - building and protecting net worth should be the focus - however when people are so hyper-focused on debt management that have all but forgotten about building and protecting their net worth that is when we can help with a financial check-up regarding their debt management. If we can be of service please let me know - there is no charge to meet and chat about how to best manage debt or strategizing over which assets are best to sell when someone is struggling with debt. If we can be of service to you or your clients please call to chat at 587-269-3009.

This is very good news! We are grateful that Canada Revenue Agency has allowed for some flexibility for people with proposals - this will allow people to keep their agreements with their creditors through these uncertain times. https://www.advisor.ca//cra-says-it-wont-force-households/

If you are thinking of redeeming some investments to pay your monthly credit payments during the pandemic then it is important for you to know the difference between RRSPs and TFSAs. Redeeming your investments is one option when you are facing financial difficulty but it is important to look at all your options early so you can make an informed decision about how you want to handle your financials. Knowing all your options even unattractive options like bankruptcy - allows... you the opportunity to decide how you would like to proceed but also gives you perspective on when you might want to change direction and pick a different option, if that is necessary. If you are uncertain about what options you have then having a chat with someone who can help you make an educated and informed decision about how to get moving forward is important. Anyways back to RRSPs and TFSAs - when you are redeeming investments to pay your monthly expenses consider the following: 1. Redeeming your RRSPs will trigger a tax liability next year. When buy your RRSP your taxable income is reduced by the value of your RRSP helping you save on taxes. When you redeem your RRSP your income is now increased by the value of the redeemed RRSP which will now create a tax debt that you will need to pay the following April. TFSAs do not offer you tax savings when you purchase them so there is no income tax implications when you redeem them. Redeeming your TFSA as a result has less strings attached as it does not trigger a tax bill when it is redeemed. 2. RRSPs are protected from your creditors and in a bankruptcy the worse that can happen is you keep all your RRSPs. You probably thought I may have mistyped so I will say it again: In bankruptcy you keep all, 100% of your RRSPs if you live in Alberta. TFSAs are not protected from your creditors. In a bankruptcy you would be given the option to pay the value of the TFSAs into the bankruptcy estate or have those TFSAs sold as paid into the bankrupt estate for the benefit of your creditors. In summary, if you are choosing between redeeming an RRSP or a TFSA to temporarily pay your monthly expenses and creditor payments then using TFSA funds can make more sense in the short term because you will not end up with a tax bill if insufficient taxes are taken off when the RRSP is redeemed. Furthermore, if you end up changing directions later on as things develop - and you choose to do a restructuring like a proposal to creditors or a bankruptcy - by keeping your RRSPs you have not placing yourself in the worse-case scenario of having eliminated your retirement savings which would have been protected from your creditors in a bankruptcy or a proposal. I hope this helps people make some tough calls in the crazy times. If you have any questions please don’t hesitate to reach out we are happy to chat at 587-269-3009. Take care and stay healthy.

Hey there gang, I know there are a lots of people with a reduced cash flow these days and just wanted to give some ideas on how to deal with your creditors in these tough times. Here are some ideas: 1. Don't promise what you can't deliver. Only make commitments to your creditors that you can keep. 2. Underpromise overdeliver. We want to pay our creditors and can often overpromise but that can get you into a pickle down the road. Make a promise to paythat you can absolutely m...ake no matter what. This gives you the option to make extra payments if you can but doesn't commit you to making a larger payment each month that might be hard in leaner months. 3. Monthly payments are preferred. Most creditors want to see consistent payments each month instead of inconsistent lump sum payment. Even if you could pay more by making lump sums creditors generally still want those regular payments every 30 days. 4. Actively communicate. Be the one that makes the call when you cannot make a payment or when you need to make an alternate payment agreement. If you are always the one that calls them they will worry less about your commitment to repaying your debt. See more

With COVID-19 we all are adjusting to a new normal which obviously has had an impact on our lives and everyone's finances. We are working hard but we are not open to the public at this time to protect the health of our staff and the public. If there is anything we can do to help you strategize we are open for phone consults so give us a ring 587-269-3009 or shoot us off an email at [email protected]. Take care of you and yours and stay healthy everyone.

We are looking an awesome Trustee to join our team. Please forward to any insolvency peeps you know! Thanks! https://ca.indeed.com/viewjob

Keeping up with the Joneses is as bad for mental health as it is for financial wealth. https://www.inc.com//social-media-changed-what-it-means-to

Does something smell fishy to you? Here is an article with an interesting perspective about credit scores. When you must have debt to have a good credit score it means that the system is set up to encourage indebtedness. This serves the banks but does it serve consumers? https://www.moneysense.ca/save/credit-score-obsession/

A cautionary tale. Check your business practices and make sure to have checks and balances in your business so that if you are no longer able to run the business the business can carry on supporting employees, investors, customers, and your family. https://www.timescolonist.com//bitcoin-dealer-seeks-credit

The Supreme Court of Canada has released its decision in the Redwater case - this decision will have immediate economic impacts felt here in Alberta. A good summary: https://gowlingwlg.com//scc-releases-its-decision-in-redw/ The Court decided that the environmental remediation of old wells should be paid from the proceeds of the companies' assets. Previously it was thought these unprofitable assets could be disclaimed - that they could walk away from the asset and the cos...t of remediation of the asset through the insolvency process. This impacts the security that banks have because if assets that have environmental liabilities cannot be disclaimed then this will reduce the assets they have as security. And while it may seems this isn't relevant to the oil and gas industry - because this just relates to insolvent companies - this will actually have an impact on the whole oil and gas industry because this will impact how banks decide to lend money. If these assets cannot be disclaimed then money that lenders thought would be coming to them will instead be used first for environmental remediation. This puts lenders in more exposed position now - if there are regulatory obligations their security agreement will take a back seat. Moving forward banks may be more conservative about how much they will lend in the future when basing their lending practices on assets held as collateral. Now that their collateral is taking a back seat to potential regulatory obligations the bank is in a worse position when it comes time to realize on their security. Likewise for ongoing loans right now these lenders will likely be looking closely at what security they have and how their position may have changed because of this change. If banks reduce their credit lines to reduce their exposure this will have cash flow implications for businesses. If your company works in this industry (or other regulated industries where there are environmental considerations) it will be important to look at your financials in advance of your bank reaching out to you. If you have any questions about the impact of this on your business reach out to us for a chat.

Debts and Divorce: When separating from a spouse it is important to know the bank cannot be bound by any agreement between two spouses to divide up debt. If you agree that one spouse will take on repayment of a joint debt it is important to be aware that the bank may still go after either debtors/spouses for collection. ... This is important to know when you are negotiating settlements of assets - if you give up an asset with the idea that you will be rid of a debt make sure that your ex-spouse moves that debt into a loan/line of credit that is only in their name. Otherwise the bank will be able to come back to you if there is a failure to pay.