Handling Inheritance and Windfall Income

You can’t rely on them to solve your budgetary issues, but you can get a whole lot done with an inheritance. According to a 2014 study by BMO Bank of Montreal, the average Canadian inheritance package is worth around $96,000. British Columbians are especially lucky, receiving over $120,000 on average, while people in the Atlantic region can expect the nation’s stingiest inheritances with an average of just under $32,000. Inheritances are inherently unpredictable, but, short of a lottery win, they’re the largest windfall income that you’re ever likely to get. The problem is that most people are really bad with windfall income. Most lottery winners are broke within a couple of years of their win, and the bigger the jackpot, the harder the crash back to earth. Inheritors do better, but can still be prone to reckless spending. If a rich relative suddenly drops dead, be smart with your share of the estate. That Lamborghini won’t be much good if you’re too deep in debt to keep it fueled. This advice isn’t just for inheritances, either. It applies equally to any windfall income.

Take a Deep Breath

Your first step should be to wait, and not just to give you some time to grieve. The immediate temptation is to go out and spend all of the money on fast cars, dream holidays, or long-planned home renovations. This is a bad idea, and it’s why all those lottery winners burn through their winnings so quickly. Instead, take at least a week to let the initial rush pass and take stock of your financial situation. This is a great time to hire a financial advisor. Some financial advisors specialise in windfall planning, and they can help you to come up with a plan that puts your windfall to work. Your financial advisor can also help you through the tax implications of your inheritance. If you are the surviving spouse, your tax situation should be fairly straightforward. If not, inheritance tax can be a nightmare to deal with, so hire a professional. There is no harm in buying a few nice things with a big inheritance, but the main objective should be to improve your lifetime financial prospects, not just go on one epic shopping spree.

Debts First

According to a forecast by the credit-monitoring agency TransUnion, the average Canadian will owe almost $29,000 by the end of 2014, a figure that doesn’t include mortgages. Non-mortgage debt is quite unevenly spread, as are inheritances, but the even the average Atlantic Canadian could pay off all of their non-mortgage debt with their inheritance. They would even still have some money left over to go shopping with. As if this hadn’t been stressed enough elsewhere, unpaid debts are bad. They ruin your credit score, they invite debt collectors, and compound interest means that they get bigger the longer you leave them. A financial windfall offers you something very rare: the chance to wipe your financial slate clean without having to go bankrupt. Focus on high-interest debt first, your credit card in particular. With low interest debt like a mortgage, it can actually make sense to leave it unpaid. Mortgages can often carry penalties for early or lump sum payments, and it is also possible that you could earn more money by investing your windfall than by paying off your mortgage.

Invest the Rest

This is another area where your financial advisor will be invaluable. A windfall income is a good time to start or expand an investment portfolio. Take a low risk approach with a mix of stocks and investments that will generate income as well as growth. This is a great opportunity to max out your RRSP, including any allowance held over from previous years, and also a chance to build your emergency fund. Financial advisors tend to advise an emergency fund equivalent to six months’ living expenses, and most Canadians are nowhere near. If you are feeling particularly generous, this is also a great opportunity to start a college fund for a child or grandchild with a Registered Education Savings Plan (RESP).

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What do I need to qualify for a MyCanadaPayday loan?

To qualify with us, you need to be employed (not self-employed) at a job that is local to you, and you must be paid regularly. You must be paid by Direct Deposit or cheque. You will need to provide proof of your income by submitting screen captures of your web-banking using our MyCanadaPayday application. We require a complete 60 days of banking history. Occasionally, we will also require a fax of a void cheque, recent paystubs, a recent utility bill or other proof of address, or a bank stamped direct deposit authorization form.

Once we have the information we need, we evaluate each loan application individually. You will be informed by e-mail whether you qualify, usually on the same day as your application.

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How does our process work?

We pride ourselves on the ease of our process, which can be completed online and using your phone!

There is no faxing, visiting a store, or signing paperwork required... and if you're fast, it takes less than 30 minutes!

Once your loan is approved, we will pay you by Interac email transfer (for returning customers) or EFT Direct Deposit (for first time loaners or those whose bank does not support Interac Email transfer) if you are from BC, Saskatchewan or Nova Scotia. Returning reloan customers can have their money in as little as 30 minutes, while first time customers will see the funds the next business day. In Ontario, your loans will be issued via Interac Email Money Transfer only. Here is the complete list of steps, in order:

BC, Saskatchewan or Nova Scotia Customers

1. You fill out the application form completely on our web site, by pressing the Apply now! button.
2. Our system will send you an automated e-mail with further instructions and a personalized download link for the MyCanadaPayday Application.
3. You download and install the MyCanadaPayday Application. This program allows you to securely upload to us screenshots of your web banking.
4. You log into your web banking using the MyCanadaPayday Application and bring up 60 days of banking history. You press theCapture button in the application and it will send us a screen capture.
5. If required, you can send us more screenshots by pressing Capture a second or more times. (For instance, if your web banking only shows one month of account history at a time).
6. Once you upload some web banking screenshots, we will automatically start the review process. If we need more information we will usually try and contact you by telephone, then e-mail.
7. We will let you know in an e-mail whether your application is accepted or denied.
8. If accepted, you will be given a link to download your Loan Agreement contract!
9. You click the download link in your e-mail and download the contract.
10. You read the contract it in full, and then agree to it by telephoning our automated agreement system, keying in your contract number, and saying your name and that you agree over the phone.
11. New customers: We schedule an EFT payment (a Direct Deposit) directly into your bank account. This payment will be processed the following business day, with the money in your account by lunchtime.
12. Reloan customers: As long as your banking information has not changed, you are eligible for an Interac E-mail transfer, which will get you money in about 30 minutes once your loan has been approved and activated on our side.
13. On your next payday, we will automatically take a payment for the amount of the loan plus the borrowing fee, as specified in your Loan Agreement contract.

Ontario Customers

1. You fill out the application form completely on our web site, by pressing the Apply now! button.
2. You will be asked to verify your identity and banking information with Decision Logic, a very secure verification company.
3. We will let you know in an e-mail whether your application is accepted or denied.
4. If accepted, you will be given a link to download your Loan Agreement contract!
5. You click the download link in your e-mail and download the contract.
6. You read the contract it in full, and then agree to it by telephoning our automated agreement system, keying in your contract number, and saying your name and that you agree over the phone.
7. Funds Delivery: Your funds will be sent immmediately via Interac E-mail transfer.
8. On your next payday, we will automatically take a payment for the amount of the loan plus the borrowing fee, as specified in your Loan Agreement contract.
   
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Dealing With Debt

Getting into debt is much easier than getting out, and sometimes getting your finances back into the black can seem like an insurmountable task. Luckily, debt isn’t a death sentence. There are concrete steps you can take to turn your finances around, and services that can help you to take them.

Budgeting

Really, everyone should have a budget, and budgeting is especially important if you’re going further into debt. Comparing your income to your expenditure will give you a better idea of the magnitude of the task ahead of you, and categorising your spending will help you to identify the areas that can be cut back. Remember to include debt repayments in your expenditure, and try to make them a priority. Burying your head in the sand will only make the problem worse as debts continue to pile up. When dealing with debt, be proactive.

Building a solid budget should be your very first step in trying to reduce your indebtedness, because it won’t damage your finances and will continue to be useful even once all of your debts are repayed. With that said, though, budgeting may not be a complete solution to your debt problems. If you’re already deep into debt, repayments may be high enough that you can’t budget around them without unreasonable cuts in expenditure elsewhere. You can cut out spending money and live frugally, but you’ll still need food to eat and a place to sleep.

Negotiate and Revise

Debt repayments are negotiable. If your debt repayment schedule becomes unmanageable, contact your creditors and ask them to revise it. Making lower payments over a longer period of time might give you the breathing room you need in order to avoid running further into debt. It will also make it much easier to fix your budget. It might come as a surprise, but creditors are usually willing to make at least some accommodations. After all, if you default, they get nothing, whereas if you revise your schedule it just takes them longer to get their money back. In any case, the worst they can do is say no. While this is less likely to work, you can also offer a debt settlement: a one-time payment for part of your debt’s value that will write off your debt entirely. Working with a credit counselling service is more likely to be successful than calling up your creditors yourself, but they might be willing to negotiate if they think that the alternative is not getting their money back at all.

Alternatively, you can alter your payment schedule by applying for a debt consolidation loan. A bank or other financial institution will pay off your debts for you, and then treat that repayment as a loan to you on which you will pay interest. If you have several different creditors, keeping track of each individual repayment schedule can be very difficult. Debt consolidation turns all of that into one big loan, and it can cut your interest rates significantly as well. However, if your credit rating has already been damaged by your debt, you may not be able to make use of this option. Once again, though, the worst that they can do is say no, so ask around and see what different banks are willing to offer you.

Seek Professional Help

Credit counselling services are available all over Canada. Organisations like Credit Counselling Canada and the Credit Counselling Societyoffer free advice and personalised counselling services to people trying to manage their debt. Dealing with debt is complex and there are many different ways to reduce your indebtedness or consolidate your debts, so expert, tailored advice is invaluable. To talk to a credit counsellor, go through one of the websites linked, look up a local credit counselling body such as the Ontario Association of Credit Counselling Services, or ask for a referral at any member store of the Canadian Payday Loan Association. As with budgeting, be proactive. If you are struggling with debt, don’t wait until it gets worse. Seek professional help immediately.

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Our customer service agents are happy to help you apply for your loan. It only takes a few minutes to be approved and your money can be in your account in just half an hour. We work hard to approve everyone and pride ourselves on approving almost everyone for a cash advance! We are certain that you will find us to be the best lender in all of Canada.
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Why Choose Us?

Our rates are highly competitive!

Most lenders demand that you repay your loan immediately on your next payday. Do you need your cash for a little bit longer? You can request your next-but- one pay date to repay, and save lots of cash..

We don't believe in hassles.

Nobody likes red tape, so we keep it simple. We aren't going to ask you a hundred questions about what you want the money for, and our signup form is only one short page. Also, no fax is required for applying for the loan.

It couldn't be faster.

Why drive all the way to a storefront? You can have money in your account in as little as 15 minutes, without even leaving your computer. Did we mention that no fax is necessary either?

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