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One of the challenges of writing about personal finance these days is keeping some perspective about the amazing things happening in the world of money these days – hot stocks, surging house prices, soaring crypto currencies and more.

As a result of the pandemic, a lot of people are quietly struggling with their finances these days. They’re lost jobs or income, they’re weighed down by debt and their real estate concerns are about paying the mortgage, not tallying their rising equity.

I invited Judith Hanebury to do a guest Q&A in the newsletter because she has some perspective on what’s happening in Alberta, one of our hardest hit provinces from an economic point of view. Ms. Hanebury is a volunteer counsel for the Consumer Debt Negotiation Project at the University of Calgary’s Public Interest Law Clinic and one of the founders of the Alberta Debtor Support Project. She’s also a retired lawyer who sat on the bench for 14 years and dealt with many people in foreclosure and bankruptcy.

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Q: What can you tell Canadians in other provinces to help them understand what’s happened to the personal finances of Albertans?

A: Alberta has always struggled with the fact that its fortunes follow those of the oil and gas industry. Alberta has a younger population, and one that has embraced debt – probably because when times are good, they are very good. Unfortunately, in 2020 Alberta faced hard times in the industry and then came the double whammy of the pandemic.

Q: One of the worst outcomes of being heavily in debt is not being able to pay your mortgage. What’s happening with home foreclosures in Alberta?

A: At the end of 2020 a group of foreclosure lawyers warned Alberta Justice and the Alberta courts that a “massive dump of foreclosures” was coming in the first half of 2021. Most people will miss any payment before they miss their mortgage payment. This tells me that a lot are facing no other option and I see tough times ahead for many Albertans.

Q: People in debt may wonder who to turn to – non-profit credit counselling agencies, insolvency trustees, debt relief offers they see on the internet. What do you consider a legitimate source of information on how to handle debts you can’t pay?

A: There are good options out there where people can get real help, but finding them can be a challenge. In Alberta we set up a website called helpwithdebtalberta.ca that asks a series of questions to guide people to reliable resources and link them to government websites that tell them what to look out for to avoid scams. Licensed insolvency trustees, who are regulated by the federal government, are under an obligation to provide a debtor with advice as to their best options. They can present arrangements called consumer proposals to creditors that, if accepted, can result in a debtor avoiding bankruptcy and paying less than they owe. Credit counselling agencies are not regulated in the same way nor do they have the same tools available, but legitimate agencies should also provide a debtor with all of their options.

Q: Is it realistic to try and negotiate with your creditors to reduce the amount you owe or have the interest portion of your debt waived?

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A: Absolutely, yes! Every creditor is different but I have been impressed with the willingness of some creditors to work with people. I think there is a widespread realization that [the pandemic] is something no one planned for and there is little to be gained at this point by hammering debtors with the usual legal tools. In Alberta, there is now a free pop-up legal advice clinic, the Consumer Debt Negotiation Project where volunteer lawyers work with Albertans facing debt, particularly those in foreclosure, to help them understand the legal processes and figure out their options.

Q: How can we identify scammers preying upon people who are in debt and stressed about it?

A: If someone approaches you offering help, rather than you finding them, it is very likely that they are not legitimate. If someone has only an online presence, or no verifiable physical office in your area, or asks that you send them money before they will provide advice, those are also clues. If someone says they can make all your problems go away and promises that they can make your creditors accept less than you owe, again it is likely they are not legitimate.


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Rob’s personal finance reading list

Brace for higher mortgages rates

The Bank of Canada isn’t expected to change its trendsetting overnight rate anytime soon, but that doesn’t mean rates for fixed-rate mortgages can’t rise. These rates are influenced by the yield on government bonds, which has been on a definite uptrend lately. Pressure is building for an increase in mortgage rates.

Why you should file your taxes on time this year

There’s a one-year interest-free tax payment deferral available for the 2020 tax year, which is good news if you expect to owe money to CRA. But tax experts say it’s vital to file your tax return by the April 30 deadline because there are still penalties for late filing.

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How the best-selling trucks compare on insurance costs

The Top 10 most popular pickup trucks are ranked here on a scale of cheap insurance premiums. Truck coverage generally costs less than for cars and SUVs.

Premium booze – worth the price?

A personal finance blogger tackles the question of whether there’s value in paying for premium vodka. Maybe I’ll do a similar analysis some time for bourbon. Oh, wait. I already know the answer. Yes.


Today’s financial tool

Canada Revenue Agency has published its list of tax software programs that are certified for its online Netfile service, including a bunch that are free.


The money-free zone

You say your attention span isn’t what it used to be? Try this list of 50 classic novels of under 200 pages.


In case you missed these Globe and Mail personal finance-related stories
  • Where should you hold your foreign stocks? We’ll do the math
  • Millennial and Gen Z men losing money: Wealthsimple study profiles GameStop investors in trading frenzy (for Globe Unlimited subscribers)
  • Attention mortgage shoppers: There’s never been a better time to lock into a long-term rate (for Globe Unlimited subscribers)

More Rob Carrick and money coverage

Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.

Even more coverage from Rob Carrick:

Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.

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