I remember the good old days when finance companies roamed the land with ‘good guy’ loans and interest rates so high that Superman wouldn’t be able to break free from the contract. The world of Daniel Bell (The End of Ideology 1960) and John Diefenbaker softened the blow of harsh and unconscionable credit contracts by calling them – ‘poverty lenders.’

Accordingly, a poverty lender basically provided credit services to those who could not qualify for loans with ‘conventional’ lenders like banks and credit unions. The poverty lenders provided a valuable service to those unfortunate people who needed credit – who needed a car loan or needed to consolidate their other debts into one big loan with easy monthly payments.

Of course, the reason why they couldn’t qualify for a loan at a bank or credit union was this: they were poor. These people were too poor to qualify. They didn’t have any real assets. They didn’t have well-paying or stable jobs. The banks were not prepared to take the risk that the loan would not be repaid.

The poverty lenders employed the best lawyers to write and defend their high interest or otherwise impossible credit contracts. The poverty lenders tended to be the harshest debt collectors who vigorously opposed any customer who dared file for bankruptcy. The poverty lenders wouldn’t hesitate to seize all of the debtor’s household furniture, seize cars, garnishee bank accounts and wages and harass debtors without restraint or mercy. In other words, the poverty lenders were the most vicious debt collectors of all and inflicted maximum pain and suffering on people whose only deficiency was poverty.

Flash forward to 2015. Today, the student loan program in Canada lends huge amounts of money to poor people who would never qualify for a loan at a bank or credit union because they have no income, no assets or both. The government(s) call this a public service that helps poor people get a post-secondary school education.

From time to time, such as in a recent article in the Vancouver Sun, someone blows the whistle on the government’s student loan losses. According to the article a Nov. 17, 2014, briefing note to CRA commissioner Andrew Treusch said that in 2012-2013, 162,000 borrowers had their debts written off for a combined value of $308 million.

Rather than examine the underlying issue of poverty being the source of the student loan program it goes unmentioned and unquestioned. Instead of looking at the high cost of tuition and post-secondary education as probable factors in a national dilemma with student loans, the government  ramps up its collection machine a few notches to ‘improve recoveries’ and silence critics.

The student loan program has already used parliament to collect its debts by prohibiting student loan debtors from a bankruptcy discharge for 7 years and refusing to co-operate with any proposals outside of bankruptcy for insolvent debtors. The net effect of using bankruptcy law to collect debts has been the creation of a new social class of debtors – student loan debtors – who are treated worse than any other debtor in a bankruptcy except for family maintenance arrears, fraudsters and miscreants with court orders against them. This isn’t exactly what was intended by the Canadian social justice framework when bankruptcy legislation was created and overhauled in 1992.

Of course, ratcheting up the merciless wheels of a debt collection process designed to inflict maximum pain regardless of the causes of the financial problems people have, hasn’t and never will stop the so called student loan ‘losses’. Funny how the student loan program uses the term ‘losses’ rather than ‘casualties’.

I might add that the student loan debts all by themselves can evolve into a financial problem of monstrous proportions just because of their humungous size. Every student loan has an unpredictable future. Every student loan borrower faces the possibility of a debt problem that can ruin their lives.

The thought of lending less or perhaps reducing the costs of post-secondary institutions hasn’t received any serious attention except for the government of Newfoundland that has showed great wisdom and courage this year in using grants rather than loans to promote post-secondary school graduation for everyone. They openly admit that society benefits from a skilled and employable workforce – not just the student.

Lending more and more money to the poor hasn’t worked too well for the poor. Tightening the screws on the collection process will change nothing except for the costs of collection.

This aggression against basically vulnerable people who can’t afford to pay their debts or fight back hasn’t stopped the defaults or other deficiencies with the student loan program because we keep banging our heads on the principle of lending money to people who can’t afford to repay it – to the poor and the working poor.

Today’s youth deserve a better less encumbered way of getting the basics to find a productive and fulfilling life after spending years of study and hard work.

In a recent blog by a colleague of mine, the first thing that jumped off the page and metaphorically smacked me in the face was the phrase, ‘us good guys.’ If ever awards were being handed out for the top ten self-righteous, self-praising phrases then ‘us good guys’ would be in serious contention for an Oscar.

As is often the case with those who use these phrases, us good guys are never defined beyond the author’s rather vague opinion. The debt ugly is quite clear. They are called dragons that threaten the financial services of the land (in Ontario) with unlicensed debt settlement services.

According to the article, the nefarious ‘evil doers’ have risen from the dead to partner up with lawyers so they can circumvent a law that banished them from the land for excessive upfront fees, misleading contracts, and dubious debt negotiation practices. I’m sure those kinds of things have never happened from the legal profession all by itself – you know, without any help of the resurrected undead debt settlement service providers.

The good guys (who, one would rightly or wrongly assume, do not demand excessive upfront fees, misleading contracts and/or dubious debt negotiation practices) are further angered by how lawyers are exempt from providing debt settlement services that, presumably, only the good guys should be delivering.

So, now the good guys seem to suggest that lawyers are susceptible to unscrupulous debt settlement practices because they are not……you guessed it…….they are not properly regulated licensed credit counsellors.

Oh oh. Not so fast. An article from the Huffington Post was cited to introduce not-for-profit credit counselling agencies and mentioned that, “…debt settlement services across Canada operate in a competitive field alongside non-profit credit counselling agencies.”

I haven’t a clue what that means. It seems to suggest that not-for-profit credit counselling agencies are the only places blessed with angel-like qualities and, by omission, the licensed ‘for-profit’ agencies either don’t seem to exist or are simply not blessed. This makes me wonder who’s blessing who?”

It’s interesting to see the logic of sanctimony unfold and awkwardly conclude that, in Canada, there are blessed not-for-profit licensed credit counselling agencies and (by omission) unblessed for-profit licensed credit counselling agencies, and then there are evil dragons and lawyers. 

Bankruptcy trustees received a warm kiss of approval for adhering to industry standards and “…to assure fair play and professionalism in relation to debt services…” (this declaration is made knowing full well that bankruptcy trustees are for-profit corporations and have a legal duty to act on behalf of the creditors and not a debtor in a bankruptcy proceeding.)

The article and its omissions, unsubstantiated assumptions and abstract assertions all sound a bit like a fairy tale to me. The best way to liberate fantasy fiction from non-fiction is to provide factual and statistically valid proof.

By the way, the legal profession drafts the legislation of governments and plays a fundamental role in the jurisprudence of debt and bankruptcy for both debtors and creditors. I’m sure they can identify the good, the bad and the debt-ugly (dragons) all by themselves.

We, as a society, hate deprivation.  We love, on the other hand, instant gratification.  These two things are on opposite sides of the spectrum, so it’s not really surprising that we struggle with forming new habits, changes to our lifestyle, or sticking to new routines.  (Let me be clear – when I refer to deprivation, I mean deprivation of extra, non-essential goods, not basic needs.) 

Why do we hate deprivation?  It seems so obvious – because we have to deprive ourselves, or forgo something that we really want.  In a culture that is constantly encouraging us to ‘live in the moment’ and do the next great thing (or buy it!), how can we say no to ourselves?  More importantly, why should we say no?

Simply put, we should reject the easy convenience of getting everything that we want, when we want it because it is often at odds with our goals.  I don’t mean our lofty goals of “I’ll quit smoking someday” or “I’ll read that book in a few months.”  I’m talking about defined, specific goals that we have put forethought and time into (“I will save $500 into my RRSPs by the end of the year.”).  Once we have decided and outlined these goals, there isn’t room for any hasty decisions that eat up our cash and our time.  All of your energy should be put towards the things that reflect who you are and the direction that you want your life to take.  Oftentimes, when I meet with prospective clients, they have avoided setting such specific goals because then it is easier to let them fall by the wayside.  If it’s undefined then you can’t really fail at it. 

Many people act in direct opposition to their stated priorities.  I’ll meet a person and they’ll tell me that creating financial security (an emergency fund, for example) is a priority; however, you’ll go over their budget and realize that there’s not any funds being set aside for an emergency.  When you question the person about how they can create a space for those funds (giving up their daily latte, smoking/drinking, or forgoing Disneyland this year), they have a puzzled or annoyed look on their face.  This tells me that they have not owned their priorities and aren’t ready to embrace them. 

Once you have stated priorities, you can begin the stage of ‘deprivation.’  This is really just a fancy way of stating that you can now start declining anything that doesn’t work toward your stated goal.  Of course, this will be harder than you anticipate.  And by depriving yourself of things, I really mean the opposite – because once you identify what you truly want and are ready to focus all of your energy towards that thing, it’s not really deprivation.  It’s strategy. 

So how can we deprive ourselves in a world that is seemingly at odds with forgoing luxuries?  Here’s some things to consider in order to stay strong:

  1. Compare and Contrast:   Is the thing that you want right now better than the thing that you want later on?  Will the thing that you want to buy immediately be worth more than the ultimate goal that you have?  If you’re having trouble comparing the items, contrast them – what makes them different and which one is better?  As we already know, a feeling means much more than an item.  This means that the book that you want to read today may not be more valuable than the trip that you want to take in six months, even though you would enjoy the book immensely.  (And you can probably get the book at the library, anyways.)
  2. 2)      Are you a person of your word?  Clichés are a writer’s enemy, but we all know that talk is cheap.  Being a person of your word – telling everyone what your goal is, and sticking with it – is important.  Letting yourself down constantly stops being an option once you realize that you aren’t making progress by lying to yourself or excusing your behaviour. 
  3. 3)      Stay away from temptation.  Getting away from your hotspots (coffee joints, clubs, malls, bookstores, etc.) will help curb your temptation.  Staying off store sites is an additional strategy, as online shopping often leads to curiosity, which leads to in person shopping. 
  4. 4)      Visualize.  We all know that little luxuries can have a big impact.  That coffee that we grab to perk us up on a terrible day, those concert tickets that we score in an effort to get us out of a funk….those are crutches that we use to get us through the boring times.  But do you know what isn’t boring?  Achieving a long-standing goal.  Really visualizing what we want (the feelings, sensations) sounds far-fetched and childish, but by putting ourselves in a different place for a small amount of time might just be enough to talk us down from purchasing. 
  5. 5)      Consider the additional expenditures.  Sometimes when we buy something, we don’t think about the ultimate costs.  If I go to a show, I’m going to want to drink or have a meal out.  If you buy a handbag, you want the matching wallet.  Eyeshadow usually requires a makeup brush to apply it.  All of your purchases probably have additional purchases attached to them, which makes the original purchase that much more expensive. 

Deprivation sounds awful, but it doesn’t have to be.  It isn’t even really deprivation, if you think about it – it’s postponing your pleasure for a different day.  It’s easy to get bogged down in the day-to-day grind (“I never get to go out,” etc.) when we can’t see immediate results, but the reality is that in order to get what we really want, we have to put off what we don’t – indefinitely.    


If Black Friday is any kind of a predictor, looks like on-line-shopping jumped to the top of the list for purchasing goods on Black Friday. And you know what that means? More debt or more accurately cyberdebt – a new form of debt that originates at home by the click of a mouse. Maybe we need to upgrade Charles Dickens’ famous Christmas poem to read:

T’was the night before Christmas when all through the house,

Not a creature was stirring, except for the mouse,

Clicking, beeping, and searching the internet with great care,

Rushing to every possible outlet before someone else gets there.

The children were on their iPads filling up their sweet heads,

Not sleeping, with their apps, chatting and playing games, instead….

I mean, we can download the Christmas movies, YouTube the Christmas music, Facebook our family pictures, text our Christmas wishes to friends and families, ,  cross the oceans in a cyber-second. Who would ever want to leave the house and actually meet or talk to someone?

On-line-shopping is like spending money on steroids. It accelerates the feelings associated with instant gratification to instantaneous over-indulgence. The money disappears faster than Captain Kirk’s latest trip to Vulcan. On-line shopping adds warp-speed debt accumulation to our list of 21st Century foibles. Yes, cyberdebt could accurately be defined as a new phenomenon of electronic funds transfer where consumers overspend, 24/7, without leaving their homes, without speaking to a retail associate, without discussing their budgets with financial advisors, act on impulse without caution, reflection, creating a new social group, cyberdebtors, who suffer the highest rate of buyer’s remorse in the universe, the next morning.

I remember the early days of business technology when I attended a real-life tutorial about computers. The instructor told us that not everyone needed an advanced computer for their business. He said that computers could do everything much faster, including making big mistakes.

Such is the case with consumer spending. On-line-shopping can open a new door to mistake-making, a very efficient and high velocity mechanism for bad decisions. It’s funny to see how credit cards may have been merely pioneers boldly going where no-one has gone before – travelling into cyberspace without cash, without loans officers, all alone, to shop, consume and overspend.

As reported in the Wall Street Journal, November 29th, 2015, Christmas shopping isn’t what it used to be. Online shopping, especially via mobile phones, shows us how buying habits have changed. According to A National Retail Federation survey, they found more people shopped online than in stores during the Thanksgiving and Black Friday weekend.

As reported by Adobe Systems Inc., consumers spent an estimated $4.45 billion online Thursday and Friday, which tracked purchases across 4,500 U.S. sites. It estimated more than half of Black Friday shopping came from mobile devices.

Unfortunately nothing was said about the debt that is likely to grow for a significant number of individuals and families.

In Canada, somebody owes the $541 billion currently outstanding in consumer debt in Canada (Bank of Canada, November 27th 2015). Black Friday undoubtedly added a layer of new debt to this ever-increasing total.

So, you’d better watch out for cyberdebt this Christmas. It can, in a flash of a digital camera or by the touch of a fingertip in the middle of the night, while in the privacy of your own home, send households into a debt spiral that will inevitably crash land sometime in January or February.

The debate between free or user pay post secondary education continues with usual arguments fanning the flames with hot air and ideology.  

In an article published today in the Vancouver Sun, we have been told that a new study from one sociology professor in California reveals that those who have to pay for their education do better than those who get free education.

My suspicions go wild when I hear such assertions. No one study could ever reach such a definitive conclusion. How could anyone suggest such an outcome without knowing, for example, how many middle and lower income groups do not attend post secondary education institutions because they can’t afford it?

Thorough studies of secondary schools where economics do not restrict attendance, might be a better starting point to better understand why some students do better than others even when the education is free.

It would be quite probable that high schools in wealthy districts such as St. Georges, York House and Crofton in Vancouver British Columbia (which are private schools) would produce higher grades and higher post secondary school attendance percentages than any other private or public high schools in British Columbia.

I would hypothecate that most university students from wealthier families would do better than middle and lower income families because of the consolidated advantages of tutors and no financial pressures to make ends meet while on campus.

Wealthy families would likely search for universities that cater to the wealthy where prohibitive tuition fees keep middle income and lower income families out. No doubt Harvard graduates would find employment easier than other univerisities of lesser stature and they would earn considerably higher incomes.

There are many other factors involved with how well students do in school. The role of parents contributes immensely to how successful their children will be in school. Working parents suffer disadvantage after disadvantage. They miss their children’s field trips, their school concerts, the opportunity to volunteer for the school, to have a relaxed debriefing with their children after school and often, they are too tired or stressed out to provide any meaningful input to homework.

The question of whether or not the poor should pay the same fees as the wealthy simply cannot be defended in a social justice framework that claims fairness and universal access to public institutions, the courts, and public schools. The answer is very simple. The poor can’t afford to pay the same fees and expenses to attend universities without borrowing humungous amounts and graduating with mountain-sized student loan debts that have a tendency to keep them poor for many years.

Some suggest that the student should pay for their post-secondary education because  people only appreciate things if they have to pay for them. In other words, nothing should be free.

This borderlines on the ridiculous but in a cruel way because young people need a college diploma or a university degree to simply get a job. The marketplace demands it – it does not matter if you are poor or cannot afford it. You have to get it.

In this context, the government or if you prefer, the state, has a duty to ensure its citizens are employable and equipped to live productive lives otherwise they and the taxpayer will pay through the back door of social assistance, unemployment insurance, health care and/or the criminal justice system. Governments have a vested interest in a working population.

Finally some governments such as Newfoundland-Labrador recognize the importance of getting the necessary tools for all young people to find a job by giving everyone access to post secondary education insitutions with grants instead of loans.

It’s refreshing to see religious leaders such as Pope Francis acknowledging the plight of the poor and an economic system that leaves the poor behind.

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