Credit Education Week Canada 2011

Credit Education Week in Canada runs from November 14 to November 18 this year, and is designed to teach Canadians about the proper use of credit. We’ve reported on it before, in our articles on, Credit Education Week 2010 – The Language of Money, and Credit Education Week in Canada 2010 – Some Final Thoughts. I also wrote about this year’s edition in Credit Education Week – Who Should Teach Us About Debt?In general, we all agree that education in any form is worthwhile. Obviously the more we can learn about credit, money and debt, the better.

This year’s Credit Education Week theme, according to their website, is The Sandwich Generation, referring to Canadians in their 30’s, 40’s and 50’s who are responsible for their children, but are also assisting with the care of their aging parents. Being in the “sandwich” can be very rewarding, but also stressful, both emotionally and financially.

Jonathan Chevreau wrote an article in the Financial Post about Adult kids living at home? It is going to cost you, where he explains that 60% of Canadians aged 20 to 24 still live at home with their parents, which obviously puts an increased financial burden on the parents.

I am a strong believer in education, but I am even stronger believer in self-education.

Credit Education Week is sponsored by three of the big banks (RBC, TD, and BMO). Other sponsors include OLG (who operates our lotteries and casinos), a large payday loan company, Credit Canada, and three bankruptcy firms.

I’m glad they are sponsoring the events, but I do worry that their advice will be somewhat biased.

What debt advice would you get from various sources?

A bank would encourage you to cut your expenses, or get a debt consolidation loan. The Royal Bank is a “Silver” sponsor of Credit Education Week. They have an Advice Centre on their website that includes Supporting Your Financial Well Being, meet with an accountant, or set up an appointment with a not-for-profit credit counselling service.” That’s good advice, but they missed two other obvious solutions: a consumer proposal, or personal bankruptcy.

What advice would I get from a payday loan company?

What advice would I get from a bankruptcy trustee? Obviously they would tell me to consider a consumer proposal or bankruptcy, but would they tell me to consider a debt consolidation loan?

Gail Vaz-Oxlade, host of TV’s Till Debt Do Us Part, and Princess, believes that during Credit Education Week we should all stop using our credit cards. That’s an interesting idea, and probably not an idea you will hear at a bank-sponsored event. Not using credit cards eliminates the possibility that you will ever have to pay interest charges, so it’s not a bad idea.

In an interview on CBC she tells the story of a young man, earning $21,000 per year, who got $15,000 in credit from a big bank. The only solution for this person was to, you guessed it, file a consumer proposal.

You won’t see Gail Vaz-Oxlade speaking at Credit Education Week, delivering her message of personal responsibility, and looking out for yourself.

My point is this: everyone has their own point of view, so everyone will give you potentially biased advice.

Of course I’m biased, because I’m a licensed bankruptcy trustee. However, I also know that the federal law under which I am licensed requires me to discuss all options. Directive No. 6R3 requires me to “discuss the options available to debtor for resolving financial difficulties”, including “non-legislative debt settlement arrangements” which includes debt consolidation, credit counselling, debt settlements, and budgeting. So even though I, like everyone else, is biased, I, like all trustees, am required to explain all of your options, to help you make a decision.

So here’s my advice this Credit Education Week: make it a priority to teach yourself about credit and debt.

By all means make use of all of the Credit Education Week seminars and resources. Talk to your banker, and your accountant, and a not for profit credit counsellor. But also talk to a consumer proposal administrator and a bankruptcy trustee so that you know all of your options.

Do searches on the internet to find people like Gail Vaz-Oxlade and Jonathan Chevreau and other personal finance writers and learn from them. Of course they are biased too, so don’t blindly follow anyone. Listen to what they have to say, and think for yourself.

Debt is too dangerous to ignore. It’s your life, so only you can be responsible for how you handle debt. If we can all learn that lesson, this will be the most successful Credit Education Week ever.