Debt management programs: explanation | Loans Quebec

What is a debt management program?


Image result for debt managementWhen you start a program like this, it allows you to make a payment that not only covers all your debts, but is adjusted to your means. The main purpose of this program is to help you repay your debts without stress and to save the most money by avoiding all the fees and interest. Before deciding whether the program is right for you, know that it applies only to unsecured debts. Unsecured means: credit card, lines of credit or other loan that required a guarantee when you requested it.

In order to begin the debt management program, you must contact a credit advisor who will help you make an agreement between the company that you owe money and you.

  • Once you have found a credit counseling service that’s right for you, an advisor will work with you to build a plan specific to your personal situation.
  • Your advisor will then contact creditors to arrange an affordable monthly payment so that you can repay the debt as soon as possible.
  • Also, your advisor asks creditors to lower fees and interest costs. Very often, they will accept.

Essentially, such a program will allow the consolidation of unsecured debts into one monthly payment, which will allow you to get back on track quickly and free you from your debts.

How does the debt management program work?

How does the debt management program work?


Working with an advisor on a debt management plan that will be customized to your financial situation might be what you need. Your advisor will help you step by step by providing you with all the details. That’s how this program works:

  • The program will not pay the debts for you. In fact, it’s the opposite. The program ensures that creditors recover the money you owe them.
  • Your creditors will still accept payments over a longer period than expected (no more than 4 years). This will allow you to decrease the amount of monthly payments. In some cases, the creditor could even reduce or remove the interest associated with your debt.
  • Your monthly payments will be simple and easy to manage, made by phone, debit card or postal money order.
  • Remember that the program does not apply to all debts.
  • The advisor’s agreement with the creditors is purely voluntary and not legally binding.

What are the advantages and disadvantages of a debt management program?

Image result for advantages and disadvantages


Advantages :

  • Reduction or disappearance of interest on debt
  • It takes a maximum of 4 (sometimes 5) years to completely pay off all your debts that are part of the program. This is much faster than trying to pay off your debts alone.
  • One monthly payment. It is much easier and less stressful to manage a single payment, as opposed to having to pay several payments to several creditors.
  • Your advisor will talk to the creditors in your name, which will save you from dealing with them personally.
  • The program includes credit cards, bank loans and corporate loans.
  • If you can not consolidate your loans because your credit score is too low, then this program is a great solution for you.


  • Creditors respect the program voluntarily, which means they can withdraw from their promises at any time.
  • You will have no guarantee from your creditors and they can still send the collectors after you.
  • You will not be able to get a new line of credit; if you opt for a new credit, this could affect the success of the program. Before starting a debt management program make sure you will not need new credits in the coming years.
  • The effect of the program could be seen only after a few months. This means that the creditors will not receive the payments right away. You must continue to make regular payments to avoid missing a payment.

A debt management program is a great option for those who can not get out of debt or can not pay all of their debt. This program will allow you to repay your debts and regain some financial confidence. The main purpose of the program is to provide you with the necessary tools to have a better management of your finances in order to avoid such incidents soon. Your advisor will teach you how to budget, how to meet it, and how to monitor your expenses and financial goals.

5 movies to learn about economics and finance

Related imageThe financial, political and social changes; national or international, affect our personal finances, many times, even without us noticing. As individuals and companies, we are immersed in an economic system, which dictates the structure of production, allocation of economic resources and distribution and consumption of goods and services; that we use daily in most of the world.

We are deeply interconnected and now, increasingly, because of technology. Therefore, what happens in China or the United States affects us in one way or another and we must be aware of it.

Knowing stories and current events that have an economic background is always interesting, as it allows us to understand and reflect on the world in which we live. And what better than to appreciate those stories through the images of cinema (and television) to awaken even more the curiosity about our economic context and understand its possible repercussions in our financial planning.

Therefore, we present you 5 movies that will offer you a different perspective on economic issues. Which ones will you see this weekend?

1. Deep Web (2015)Image result for deep web movie 2015

This documentary by director Alex Winter explores the world of the deep web, the hidden side of the internet. Through the story of Ross Ulbricht, the creator of one of the most famous drug sales sites, Silk Road, Bitcoin’s participation in digital transactions is explored, the whole issue about the legalization of drugs and the economic dynamics that is created around a product so conflicting for society.


2. Downloaded (2013)Image result for downloaded movie 2013

This work, also by director Alex Winter, chronicles the rise and fall of Napster, the first digital music download server. This interesting film shows how the MP3 format was popularized for the free exchange of songs by new, alternative or classic artists. The film, above all, emphasizes the influence of Napster in the economic revolution of the record industry, which led to the creation of streaming services such as Spotify, Apple Music or Deezer.

3. Buy, throw, buy (2012)

Complete documentary here:

Documentary by the Spanish television station RTVE that explores the worrying trend of domestic products, increasingly regulated based on the so-called programmed obsolescence. It addresses the possible global consequences of an economic system based on a constant consumption of products made to fail after a certain time.

4. Bad news (Too big to fail, 2011)Image result for Bad news too big to fail movie 2011

Produced by HBO, it adapts the homonymous book of the writer and journalist Andrew Ross Sorkin. It tells, step by step, the explosion of the US economic bubble in 2008, due to the granting of mortgage loans to disqualified people, but it does so from the perspective of the big companies and the powerful people involved.

The plot focuses mainly on the role played by Henry Paulson, Secretary of the Treasury of the United States during the government of George W. Bush and member of the Board of Governors of the International Monetary Fund; as well as the people who worked or related to him. It shows how was their reaction and performance before the outbreak of economic depression, how they faced the fall of their empires and how they tried to justify it.

5. Human Capital (Il capitale umano, 2013)Image result for Human Capital movie 2015

Directed by Paolo Virzi, Human capital is located in Italy, after the economic crises of 2011 and 2013. In a precarious panorama, the film portrays the well-to-do Italian class, to show the social reality of a country wrapped in greed and the taste for excessive accumulation, which cares little about breaking human bonds or harming their stability. This film criticizes the conceptualization of wealth as the human engine.

As you can tell, these films show us how the changes that occur in different areas and in different parts of the planet, are present in our daily lives, for example: the current regulation of Bitcoin to avoid its use in illegal activities, the way in which we consume music or control measures for granting credits, which seek to contain bubbles in the real estate sector. All this also invites us to think about how the decisions we make in our current context can affect our future financial planning.

When does my life insurance pay in the IRPF and how does it do it?

Image result for insuranceWhen does my life insurance pay in the IRPF and how does it do it?

Although life insurance is a product through which we can use in order to save or invest, the most general coverage is to cover the death or disability of the insured.

If the death occurs, the income obtained must be taxed in the Inheritance Tax, which is transferred in each Autonomous Community. But if a disability occurs or in any case in which the policyholder who hires and pays the insurance premium (or the insured if the insurance is collective) coincides, and the beneficiary of the benefit has to do it for the Tax on the Income of the Physical Persons (IRPF). We explain the key points.

Life insurance and IRPF

In the first place, although we have indicated that disability, that is, when you receive this benefit as an insured to cover this situation, is one of the clearest assumptions in which you have to pay for personal income tax, it is not always the case. There is an exception, disability insurance whose beneficiary is the mortgagee.

It is a very common case for many mortgaged that at the time of contracting the mortgage loan of their home they were also forced to subscribe to life insurance, with disability coverage in most cases, in favor of the financial institution to cover the outstanding debt. The changes in the new Mortgage Law that will be approved in this year 2018 end with this obligation, the mortgagee being able to voluntarily subscribe this insurance if the entity offers some consideration or improvement in conditions such as the interest rate.

Beyond this exception, if the policyholder is going to receive the capital stipulated in the policy, he must declare it in the IRPF of the year in which he received this payment. For example, if you received it in 2017, in the income statement for that year that can be submitted from April 4 to July 2, 2018.

The calculation method is very simple, it will do so for the amount received by subtracting the premiums paid in that year.

For example, if you have received 60,000 euros and paid 300 euros of premium in that year, you will have to declare a profit of 60,000 euros – 300 euros = 59,700 euros.

This yield is considered as real estate capital so it will have to be taxed depending on its amount at different rates:

  • The first 6,000 euros at 19%
  • From 6,000.01 euros to 50,000 euros to 21%
  • From 50,000.01 euros and up to 23%