Truthfully, a large number of Canadians – especially Alberta currently in 2017 – have some credit blemishes.

Blemishes can be high credit card balances, slow or late payments, past due amounts on utilities that report to the bureau, or a mixture of all the above.

1 recent late payment can put you into a higher risk category if there is still a balance or payment due on the credit card and your credit applications can be declined until they see signs of better financial times.


You may have had perfect repayment your whole life, but carry debts on credit cards above the 50% of limit, 80% of limited, maxed out at 100%+ of limit… any of these will affect your credit score.

Banks expect people to have debt, or some form of credit that gets utilized to show an ability to borrow-then payback.


Just because you carry a balance doesn’t mean your necessarily subprime, but how you handle your debt load is VERY important.

Should I Refinance my vehicle? The right answer is… MAYBE?

Consider the litigation behind this:

1) If a dealership does this for you they are required to have an inspection done on the car by provincial law.  Guess who pays for that? YOU!

2) If you purchase a vehicle from a dealership, unless your tax exempt… you are supposed to pay taxes on purchases, aren’t you?  Guess who pays for that? YOU AGAIN!!

How much did you save on interest by refinancing?

Example) If you went from 7% to a 5% fixed interest rate and you owed $25,000 on a 5-year term.

7% would be $4,702

5% would be $3,307

That equates to a savings of $1,395 – WOO HOOO!!

Oops, I forgot the GST we have to pay over again on $25,000… that’s $1,250 + the inspection is a minimum $225 inspection cost.  Oh, don’t forget the bank fees to put a lien on the vehicle, that will be about $60.

$1,395 in savings

$1,535 in costs

= $140 it cost you to get a “better interest rate”

Truthfully, you are better off to dump as much principle only payments as you can on the loan to pay it off faster and save the future interest costs.

Wait a minute… you said the answer was MAYBE you said!

What is the upside? How can I do this with no extra costs?

Visiting your branch is the answer, but a lot of times they can’t assist on the vehicle itself, it ends up becoming collateral on a large consolidation loan which actually makes you hugely upside down as all the debt consolidated is sitting on the hood of the car which you cant trade unless its all paid off and your branch is now in control collecting your money. You payment per month on everything may have improved, the rate may have improved… but your ability to get out of the car one day has not… but MAYBE that’s a better situation for you.

For most, it isn’t.  Send and application to trade the car in and ask for cashback – that’s your better route.

Banks are a business, do not ever forget that.

One of the most interesting parts of the conversation with a Trustee when talking about your options to go into bankruptcy or a consumer proposal is when they say…

“you should go get a new car…”

WHAT THE HECK a lot of people think, why would I go spend a bunch of money when that is exactly what got me here… spending and utilizing credit.

Here is what most people do not know… you are left with 1 of 2 options.

  1. You may qualify for a new vehicle, a brand new vehicle.

If you do, its likely best that you grab onto something that you can hang onto while the best interest rate you qualify for isn’t desirable as you now have a very bad credit rating.

2.You don’t qualify.  This is where you want to take your steps very carefully.  You might be in a better position to pay a higher rate on a different vehicle after filing instead of further accepting the huge loan you likely have from trading vehicles in and rolling in the upside down “negative equity”

You are in a 3-5 year repayment insolvency plan.  Look at the options, you don’t want to make the wrong choice.

If you are going into or have filed for bankruptcy or proposal, would be happy to give you some free advice.