When you die, your debts don’t follow you beyond the grave. But that doesn’t mean that you can ignore them – at least not in Canada, anyway. Not all liabilities are the same, so you need to understand how Canadian law treats different types of debt. This vital understanding can help you make wise choices while planning for your family’s future.
Secured and Unsecured Debt
Most debt falls into one of two categories – secured or unsecured. Secured debt involves assets used as collateral, as Investopedia explains. Should the borrower default, the lender can seize the asset to help pay for the loan. Mortgages and auto loans are the two most common kinds of secured debt.
Most consumer debt, like credit cards or personal loans, is unsecured. This type doesn’t rely on collateral, so it tends to carry higher interest rates. Certain monthly expenses are also unsecured debts. Some examples include medical bills, revolving store credit, and gym memberships.
Unpaid Debts and Your Estate
Your estate contains both your assets and liabilities. Think of it this way: Anything you own is an asset, and anything you owe is a liability. Most creditors will still want repayment after you die, and they’ll hit up your estate to collect.
Secured or unsecured, your estate must pay debts before your heirs receive anything. Statistics from StatCan, HuffPost Canada, and CBC News may put things into perspective:
Nearly 68% of Canadians own their homes.
The average home price is currently $586,000.
The average Canadian owes $73,552 in debt.
The order in which debts are paid can vary. Home mortgages usually get priority, followed by auto loans and other secured debt. Unsecured debt is next on the list. Depending on how much you owe, your debts could total more than the value of your estate, in which case, under Canadian law, your estate is either declared insolvent or placed into bankruptcy. Mondaq explains that these estates must pay funeral expenses first. Estate administrative costs are next, followed by government debts and other remaining liabilities.
Debts and Your Family
Creditors can make claims against your estate, but what happens when there’s nothing left to pay? Can they come after your family for payment? Not in most cases, as Credit Canada explains. If you’re the sole borrower with no cosigners, your creditors are out of luck if your estate can’t pay them. Unscrupulous creditors may still try to collect anyway – they know the law but still want their money. Your family can file complaints with their provincial or territorial consumer affairs office. The national Office of Consumer Affairs offers tips for filing complaints.
People who cosign or jointly apply for debt are still on the hook for repayment if the primary borrower dies. Some creditors also hold supplementary cardholders responsible for payment. If you’re worried about lingering debt, you can give your heirs “living inheritances” while you’re still alive. Global News clarifies that Canada does not tax either inheritances or gifts. Capital gains taxes may apply if you’re gifting an asset and its value grows.
A Quick Word About Student Loans
Student loans are technically unsecured debt, but they’re treated a little differently. Employment and Social Development Canada explains that federal student loans are forgiven upon a borrower’s death. With private student loans, it’s a different story. Loans Canada reveals that private lenders have no legal obligation to forgive their loans after a borrower dies. While some do discharge these loans, others may make claims against your estate.
Nothing in our world is certain except death and taxes, quipped American statesman Benjamin Franklin. Understanding your debt and having a solid estate plan can prevent your family from being saddled with burdens after you’re gone.
One of the best ways to spend your time during quarantine is to think about ways to save for your wedding, especially if it was postponed.
The last few months have forced many people to postpone or cancel their wedding plans. While this might be upsetting, it is also an opportunity to take a step back and rethink some ideas. Whether you had your plans pushed off due to the current global pandemic or you were just starting to talk about ideas with your partner before the quarantine began, extra time to plan is really a blessing in disguise for some. One of the best ways to spend your time is pondering how to save money.
A wedding is an expensive event. If you want to come out of the pandemic with a clear plan and a pocket full of cash, take a look at these easy ways you can save money for the future.
Evaluate Your Current Expenses and Budget
If you want to save money on the wedding you need to have a plan. You can’t formulate a plan if you don’t have information. When it comes to money, all the information you need can be found in your life and daily habits. What is your income? What is your partner’s income? How much do you spend a month on expenses, and how much can you realistically afford to set aside without tapping into crucial funds? Knowing the money you are starting with and what you’re likely to see from your job can help you forecast.
A wedding budget is also a vital component. You need to set a limit on your spending and stick with it. This will help you control what funds you are applying to which services and evaluate whether or not you are spending too much or too little on anything in particular. The budget will depend entirely on the preferences you share. If you don’t care about the venue but love food, then put the bulk of your funds behind the catering service. Work on this part of the plan in advance, and you’ll see better results with the rest.
Take Down Your Debt
Extra time is a blessing for many reasons. Maybe your credit score is not exactly where you would like it to be. Improving your rating takes time, and time may be all you have right now. If you have existing debt preventing you from getting your financial status into a better position, try to pay down some of this right now. Make higher payments to pay off the premium over the interest, and see if you can work with lenders to get better rates based on good habits you have established over the years.
The reason this is helpful is you might want to consider opening up or using an existing credit card for wedding expenses. If you have a specific card that you use to cover a good chunk of the payments, then you will have a really easy way to both track your budget and know exactly how much you have spent and on what. While this is a great step to take for some, it might not be right for you. Putting money toward your debt when you need it for other expenses is also a fine and sensible decision.
Look for Local Deals
Going local with your vendors is a smart move because it helps you engage with your community in a meaningful and productive way. What’s more, you might be able to save money by doing this. Ask one of your vendors for recommendations, and this might lead to you finding an array of other excellent vendors that offer great rates, all because you asked a person with connections who likes to connect others.
It can be difficult to find ways to save for a wedding, but it can be a little bit easier when you have a quarantine keeping you from going out and spending. Think about your strategy and develop a plan that works for your future nuptials.
If you are planning to wed in the near future, consider these financial suggestions in order to help you save and budget for your big day.
Recent financial reports state the average cost of a wedding in Canada is about $29,450, according to WeddingWire. This number is quite high, especially when considering that younger couples make slightly less income than previous generations when weighted against inflation. Whether you plan on holding a lavish event or an intimate gathering, it is important to save enough money for your big day. If you’ve still got a bit of time before you walk down the aisle, it is wise to look into different tactics for setting funds aside. Explore these financial suggestions and learn how to save for your upcoming wedding.
Setting Financial Goals and a Budget
Having a general desire to save money is often not enough of a motivator to turn the idea into a reality. Therefore, financial experts often suggest setting goals to see greater success. Having a tangible objective to work toward can make it a lot easier for you to measure the process and determine whether or not you’re on the right path. In this scenario, your ultimate goal is to save for your wedding. To simplify matters even more, set smaller goals along the way, like saving enough for a venue deposit and similar early planning expenses.
As you create goals, you also want to set a budget for the event. Without a firm budget to work from, you run the risk of spending way more than you can afford. Do not let the national average of almost $30,000 per wedding intimidate you. It is entirely possible to set a much smaller budget and still have a fantastic event. To be as accurate as possible with your budget, talk to your partner about topics like how many guests to invite, specific traditions that need to be included, and whatever else will dictate your available funds.
Existing Debt
There is a rising issue with debt in Canada at the moment. In 2019, financial experts reported that roughly 47% of Canadians claimed to be living with unmanageable levels of debt. If this sounds familiar, you may wonder how it is even possible to pay for a wedding. While you shouldn’t let your financial obligations hold you back from making important life decisions, paying down your existing debt can be a good idea. Making higher consistent payments and paying off whatever possible can improve your credit score and increase your odds of being approved for a loan.
On the topic of credit cards, it can also be useful to look into the various reward programs you are enrolled in. Putting wedding-related purchases on cards with advantageous reward systems can do wonders for your finances. For example, it is entirely possible with some credit companies to earn enough points on wedding purchases to pay for the expenses related to a honeymoon. Take a look at your credit cards and see which option will yield you the best long-term results to make the most out of your available finances.
Making Adjustments
To accommodate a big expense like a wedding, you need to make adjustments to the way you go about your everyday routine. The less you spend on a daily basis, the more you will have to work with for your wedding. If you and your partner order food a lot, make a concerted effort to cook at home instead. Find the changes in your routine that will yield the biggest results. You might not be able to pay for the whole event with the money you save from cutting back on to-go coffee, but the additional funds will help.
Though it might seem impossible to save enough money for the wedding of your dreams, there are strategies that can improve your odds. By creating a budget early, you will be able to make the right adjustments to your spending habits in order to accommodate the many expenses related to your big day.
Finances matter long before the wedding takes place.
The idea of marriage has changed a lot over the centuries. Once upon a time, most couples wed for the sake of their families and futures. When two families would join together as a result of a marital union, it would often bring forth plenty of financial benefits to both sides. In fact, many brides and grooms were sized up by potential partners based solely on how much wealth or property their families possessed. These days, the reasons people marry are different, but there are some similarities when it comes to financial matters.
Getting married means sharing everything with your significant other. This, of course, means finances will often be included. People usually get weird when pressed to talk about money. If you and your significant other have not had a conversation about money and the future, then now is an important time to begin. Without this discussion, you could be in for some upsetting or confusing surprises that add stress to the bonds of marital bliss. Take a moment to look over these tips and see what makes the most sense for your situation.
The Practical Side
When you are marrying someone, you are taking on everything this person embodies or possesses and you are making it a part of your life. The good and the bad come along with this. If your partner has a lot of debt, then you might be taking on this debt with your union. Before you get married, you are going to want to sit down with your partner and begin to discuss financial matters and how you will both be impacted by the wedding.
It might not even matter much to you that your partner is currently in debt. Still, you could want to make a plan to help remove this situation from your lives. Having this talk about money early can help both of you to make plans for the future. Discuss how to get out of debt and what you can both do to create a chunk of savings that will last a good long while. The earlier you have this talk, the less stressful it may wind up being when you enter married life.
Finances After the Wedding
In many cases, a talk about finances is about a lot more than money. You and your significant other might not really have a clear idea of what either of you would like to do for work after marriage. When you both work all the time, it can make it difficult to take the next step in your relationship. Namely, this means finding time to have and raise children. Now is the right time for you to start these conversations. Hopefully by this point the topic of children has come up. If not, now is your chance.
Children are quite a big responsibility to take on. Not only do you need to have the time to raise them, you also need a significant amount of money. During your talk about your future finances, you may want to breach the topic of children. Discuss the best possible paths for making your dreams into a reality. You might discover that it is possible for one of you to work and the other to take care of the family. You’ll never know until you have the talk.
Tomorrow Starts Today
Most people feel weird discussing money. While this is a natural feeling, it also can be problematic to avoid these conversations with your significant other. To truly enjoy married life, it is a good idea to have open conversations about finances early. Beginning this chat with enough time to spare can allow both of you a bit of room to figure out any snags or issues that you might predict along the way.
When you die, your debts don’t follow you beyond the grave. But that doesn’t mean that you can ignore them – at least not in Canada, anyway. Not all liabilities are the same, so you need to understand how Canadian law treats different types of debt. This vital understanding can help you make wise choices while planning for your family’s future.
Secured and Unsecured Debt
Most debt falls into one of two categories – secured or unsecured. Secured debt involves assets used as collateral, as Investopedia explains. Should the borrower default, the lender can seize the asset to help pay for the loan. Mortgages and auto loans are the two most common kinds of secured debt.
Most consumer debt, like credit cards or personal loans, is unsecured. This type doesn’t rely on collateral, so it tends to carry higher interest rates. Certain monthly expenses are also unsecured debts. Some examples include medical bills, revolving store credit, and gym memberships.
Unpaid Debts and Your Estate
Your estate contains both your assets and liabilities. Think of it this way: Anything you own is an asset, and anything you owe is a liability. Most creditors will still want repayment after you die, and they’ll hit up your estate to collect.
Secured or unsecured, your estate must pay debts before your heirs receive anything. Statistics from StatCan, HuffPost Canada, and CBC News may put things into perspective:
Nearly 68% of Canadians own their homes.
The average home price is currently $586,000.
The average Canadian owes $73,552 in debt.
The order in which debts are paid can vary. Home mortgages usually get priority, followed by auto loans and other secured debt. Unsecured debt is next on the list. Depending on how much you owe, your debts could total more than the value of your estate, in which case, under Canadian law, your estate is either declared insolvent or placed into bankruptcy. Mondaq explains that these estates must pay funeral expenses first. Estate administrative costs are next, followed by government debts and other remaining liabilities.
Debts and Your Family
Creditors can make claims against your estate, but what happens when there’s nothing left to pay? Can they come after your family for payment? Not in most cases, as Credit Canada explains. If you’re the sole borrower with no cosigners, your creditors are out of luck if your estate can’t pay them. Unscrupulous creditors may still try to collect anyway – they know the law but still want their money. Your family can file complaints with their provincial or territorial consumer affairs office. The national Office of Consumer Affairs offers tips for filing complaints.
People who cosign or jointly apply for debt are still on the hook for repayment if the primary borrower dies. Some creditors also hold supplementary cardholders responsible for payment. If you’re worried about lingering debt, you can give your heirs “living inheritances” while you’re still alive. Global News clarifies that Canada does not tax either inheritances or gifts. Capital gains taxes may apply if you’re gifting an asset and its value grows.
A Quick Word About Student Loans
Student loans are technically unsecured debt, but they’re treated a little differently. Employment and Social Development Canada explains that federal student loans are forgiven upon a borrower’s death. With private student loans, it’s a different story. Loans Canada reveals that private lenders have no legal obligation to forgive their loans after a borrower dies. While some do discharge these loans, others may make claims against your estate.
Nothing in our world is certain except death and taxes, quipped American statesman Benjamin Franklin. Understanding your debt and having a solid estate plan can prevent your family from being saddled with burdens after you’re gone.
One of the best ways to spend your time during quarantine is to think about ways to save for your wedding, especially if it was postponed.
The last few months have forced many people to postpone or cancel their wedding plans. While this might be upsetting, it is also an opportunity to take a step back and rethink some ideas. Whether you had your plans pushed off due to the current global pandemic or you were just starting to talk about ideas with your partner before the quarantine began, extra time to plan is really a blessing in disguise for some. One of the best ways to spend your time is pondering how to save money.
A wedding is an expensive event. If you want to come out of the pandemic with a clear plan and a pocket full of cash, take a look at these easy ways you can save money for the future.
Evaluate Your Current Expenses and Budget
If you want to save money on the wedding you need to have a plan. You can’t formulate a plan if you don’t have information. When it comes to money, all the information you need can be found in your life and daily habits. What is your income? What is your partner’s income? How much do you spend a month on expenses, and how much can you realistically afford to set aside without tapping into crucial funds? Knowing the money you are starting with and what you’re likely to see from your job can help you forecast.
A wedding budget is also a vital component. You need to set a limit on your spending and stick with it. This will help you control what funds you are applying to which services and evaluate whether or not you are spending too much or too little on anything in particular. The budget will depend entirely on the preferences you share. If you don’t care about the venue but love food, then put the bulk of your funds behind the catering service. Work on this part of the plan in advance, and you’ll see better results with the rest.
Take Down Your Debt
Extra time is a blessing for many reasons. Maybe your credit score is not exactly where you would like it to be. Improving your rating takes time, and time may be all you have right now. If you have existing debt preventing you from getting your financial status into a better position, try to pay down some of this right now. Make higher payments to pay off the premium over the interest, and see if you can work with lenders to get better rates based on good habits you have established over the years.
The reason this is helpful is you might want to consider opening up or using an existing credit card for wedding expenses. If you have a specific card that you use to cover a good chunk of the payments, then you will have a really easy way to both track your budget and know exactly how much you have spent and on what. While this is a great step to take for some, it might not be right for you. Putting money toward your debt when you need it for other expenses is also a fine and sensible decision.
Look for Local Deals
Going local with your vendors is a smart move because it helps you engage with your community in a meaningful and productive way. What’s more, you might be able to save money by doing this. Ask one of your vendors for recommendations, and this might lead to you finding an array of other excellent vendors that offer great rates, all because you asked a person with connections who likes to connect others.
It can be difficult to find ways to save for a wedding, but it can be a little bit easier when you have a quarantine keeping you from going out and spending. Think about your strategy and develop a plan that works for your future nuptials.
If you are planning to wed in the near future, consider these financial suggestions in order to help you save and budget for your big day.
Recent financial reports state the average cost of a wedding in Canada is about $29,450, according to WeddingWire. This number is quite high, especially when considering that younger couples make slightly less income than previous generations when weighted against inflation. Whether you plan on holding a lavish event or an intimate gathering, it is important to save enough money for your big day. If you’ve still got a bit of time before you walk down the aisle, it is wise to look into different tactics for setting funds aside. Explore these financial suggestions and learn how to save for your upcoming wedding.
Setting Financial Goals and a Budget
Having a general desire to save money is often not enough of a motivator to turn the idea into a reality. Therefore, financial experts often suggest setting goals to see greater success. Having a tangible objective to work toward can make it a lot easier for you to measure the process and determine whether or not you’re on the right path. In this scenario, your ultimate goal is to save for your wedding. To simplify matters even more, set smaller goals along the way, like saving enough for a venue deposit and similar early planning expenses.
As you create goals, you also want to set a budget for the event. Without a firm budget to work from, you run the risk of spending way more than you can afford. Do not let the national average of almost $30,000 per wedding intimidate you. It is entirely possible to set a much smaller budget and still have a fantastic event. To be as accurate as possible with your budget, talk to your partner about topics like how many guests to invite, specific traditions that need to be included, and whatever else will dictate your available funds.
Existing Debt
There is a rising issue with debt in Canada at the moment. In 2019, financial experts reported that roughly 47% of Canadians claimed to be living with unmanageable levels of debt. If this sounds familiar, you may wonder how it is even possible to pay for a wedding. While you shouldn’t let your financial obligations hold you back from making important life decisions, paying down your existing debt can be a good idea. Making higher consistent payments and paying off whatever possible can improve your credit score and increase your odds of being approved for a loan.
On the topic of credit cards, it can also be useful to look into the various reward programs you are enrolled in. Putting wedding-related purchases on cards with advantageous reward systems can do wonders for your finances. For example, it is entirely possible with some credit companies to earn enough points on wedding purchases to pay for the expenses related to a honeymoon. Take a look at your credit cards and see which option will yield you the best long-term results to make the most out of your available finances.
Making Adjustments
To accommodate a big expense like a wedding, you need to make adjustments to the way you go about your everyday routine. The less you spend on a daily basis, the more you will have to work with for your wedding. If you and your partner order food a lot, make a concerted effort to cook at home instead. Find the changes in your routine that will yield the biggest results. You might not be able to pay for the whole event with the money you save from cutting back on to-go coffee, but the additional funds will help.
Though it might seem impossible to save enough money for the wedding of your dreams, there are strategies that can improve your odds. By creating a budget early, you will be able to make the right adjustments to your spending habits in order to accommodate the many expenses related to your big day.
Finances matter long before the wedding takes place.
The idea of marriage has changed a lot over the centuries. Once upon a time, most couples wed for the sake of their families and futures. When two families would join together as a result of a marital union, it would often bring forth plenty of financial benefits to both sides. In fact, many brides and grooms were sized up by potential partners based solely on how much wealth or property their families possessed. These days, the reasons people marry are different, but there are some similarities when it comes to financial matters.
Getting married means sharing everything with your significant other. This, of course, means finances will often be included. People usually get weird when pressed to talk about money. If you and your significant other have not had a conversation about money and the future, then now is an important time to begin. Without this discussion, you could be in for some upsetting or confusing surprises that add stress to the bonds of marital bliss. Take a moment to look over these tips and see what makes the most sense for your situation.
The Practical Side
When you are marrying someone, you are taking on everything this person embodies or possesses and you are making it a part of your life. The good and the bad come along with this. If your partner has a lot of debt, then you might be taking on this debt with your union. Before you get married, you are going to want to sit down with your partner and begin to discuss financial matters and how you will both be impacted by the wedding.
It might not even matter much to you that your partner is currently in debt. Still, you could want to make a plan to help remove this situation from your lives. Having this talk about money early can help both of you to make plans for the future. Discuss how to get out of debt and what you can both do to create a chunk of savings that will last a good long while. The earlier you have this talk, the less stressful it may wind up being when you enter married life.
Finances After the Wedding
In many cases, a talk about finances is about a lot more than money. You and your significant other might not really have a clear idea of what either of you would like to do for work after marriage. When you both work all the time, it can make it difficult to take the next step in your relationship. Namely, this means finding time to have and raise children. Now is the right time for you to start these conversations. Hopefully by this point the topic of children has come up. If not, now is your chance.
Children are quite a big responsibility to take on. Not only do you need to have the time to raise them, you also need a significant amount of money. During your talk about your future finances, you may want to breach the topic of children. Discuss the best possible paths for making your dreams into a reality. You might discover that it is possible for one of you to work and the other to take care of the family. You’ll never know until you have the talk.
Tomorrow Starts Today
Most people feel weird discussing money. While this is a natural feeling, it also can be problematic to avoid these conversations with your significant other. To truly enjoy married life, it is a good idea to have open conversations about finances early. Beginning this chat with enough time to spare can allow both of you a bit of room to figure out any snags or issues that you might predict along the way.
