Posted by Bill
As an Insolvency Counsellor I have counselled literally thousands of individuals and business operators over the years on the principals of good money management. The problem is that I usually don’t see these people until after they have become insolvent or have reached a point where they need to file a Consumer Proposal (Orderly Repayment of Debt) or perhaps they are being forced into bankruptcy.
So, I thought it might help our site visitors if I wrote about restoring credit; what works, and what never works.
Unpaid Credit Cards:
Perhaps you have defaulted on credit card payments. A Collection Agent has been assigned to your account and is demanding payments. Let’s say you have not paid for 6 months or more and they are threatening to garnish your wages, or sue you. At this stage you have an “R9” rating at the Credit Bureaus which is the equivalent of being bankrupt. That’s right, it is the same as if you had filed bankruptcy, but it gets worse. WAIT! There is more to read… read on »
Posted by Bill
There are companies and individual lenders who specialize in second mortgages that are doomed to fail so that the lender can take your home for much less than the market value. I am going to show you how it works so you will know what to watch out for.
This is the true story, unfortunately, I hear it from lots of people who come to see me after getting into a mortgage they cannot manage.
Each time my client explains, something unusual has happened; a sickness, death, lay off et cetera, and the credit cards get maxed out. They struggle for a while and fall behind on payments to creditors. Sometimes collection agents convince them not to pay their mortgage so that a payment can be sent to the collection agent. Collectors tell them that it’s better to pay the credit cards to keep their good credit and let the mortgage fall behind. (Take note … that is a false statement).
The desperate homeowner diverts mortgage money to pay the collection agents.
Soon the collection agent demands they get a 2nd mortgage to pay off the balances on the credit card debt and often demand that the struggling homeowner goes directly to the lender that the collector recommends. They paint a very nice picture that this particular lender will give them money even though the banks have turned them down. (That is correct – that is why these lenders are in bed with some collection agents).
Soon the homeowner gets the 2nd mortgage which is high interest and repayable monthly at “Interest Only”. The mortgage always has a one (1) year term, but they are told not to worry – it can be renewed again at the end of the year for an additional 1 year term. (Of course that little statement is not written into the mortgage document). They are also told this mortgage will give them an opportunity to rebuild their credit over the coming year. (Only problem is – that will definitely not happen – see further down for reasons). WAIT! There is more to read… read on »