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‘respect to lost or stolen ¢

(NC)—A person who co-signs a loan is just
as responsible for the loan as the primary
debtor-—the one who borrowed the money.
That means that the lender can demand
payment from the co-signer before, or in-
stead of, approaching the debtor.

Say your son recently bought a car and
you co-signed his loan from the finance
company. As long as he makes all his pay-
ments on time, everything's fine. But what
if he finds he can’t manage it and, with-

’ outtelling you, he falls behind? You could

find your bank account or your wages be-
ing gamished for the debt before you know
it. To make things worse, most loan con-
tracts contain what's called an acceleration
clause. This clause say that the lender may
demand immediate repayment of the whole
Ioan—not just the arrears—if any condition

~ of the agreement has been violated. So one
missed paymént could .mean the entire. .

amount of the foan suddenly has to be re-
paid. oO, .

In our example, where the loan was for
the purchase of acar, the car would probably
be pledged as security for the loan, by means
of a chattel mortgage. Then, if payments
fall into arrears, the lender would have the

qo eee eee
option ‘of seizing the car. And, in certain
circumstances, if they then sell the car and

lose money, they can sue-you for the loss.
The creditor must give you proper notice «-

under the Persona! Property Security Act.

: - ~The Law and You... *

What does it mean when I co-sign a loan? .

THE LAW AND YOU. -
by Colin McKinnon
= LL.B. Qc.

~~

Of course in another situation, if the co- |

signer put up security for the loan, the lender
can seize those goods rather than go after
the borrower, if they choose to.

Read the document carefully. Get legal
advice if you're not sure you understand it,

sure that you always know what's happen- -

ing on the account so that you’re not taken

.bysurprise,
_. If you requite legal-advice, contact the - ~
“Lawyer Referral Service, Lawyer Referral

will provide you with a free initial half-
hour consultation with a lawyer. In Metro
Toronto and area’ call (416) 947-3330.
Outside Metro call toll-free 1-800-268-

$326. From area code 807 call toll-free -

1-800-668-8526.

What do | do if | discover my credit card

has been lost or stolen?

 (NC}-There is always the danger that we

might lose our credit cards, or that they
might be stolen. The thought of having a
thief spending our money if frightening.
The first thing to point out is this area is
not regulated by the government, Instead,
each credit company has its own guide-
lines. When you receive your card, the
company sends you a copy of the credit
agreement you are entering into. In that
agreement there is usually provision wi
ards, Check your
agreement to find out what your particular
credit company says about lost or stolen
nerally ‘speaking, it companies
advise you to report the loss or theft to the
company immediately. If you do this, the
company. will assume complete responsi-
bility for the fraudulent use of your card. If
you fail co notify the loss or theft to the
company, most credit car agreements limit
your liability for fraudulent use to $50.00.
But remember that this is not a limit im-
posed by law and therefore it can vary from
conapany to company and from time to time.
0, the first thing to do if you discover

that your credit card is missing, isto phone _

the issuer immediately and report it. If you
can't reach them by telephone, send a reg-
istered letter will all the relevant details,

THE LAW AND YOU
by Colin McKinnon
LL. B. QC.

It is a good idea to keep a list of your
credit cards with the account number, and
the telephone number of each company or
bank concemed, Of course you should keep
that list in a place other than where you
keep the credit cards themselves.

Another idea you might want to ¢x-
plore is insurance for your stolen credit
cards, Speak to your insurance agent about
this, Some insurance companies now pro-
vide coverage, for an annual premium of
course, to protect you from claims for pay-

- ment when someone steals and uses your

‘card to run a bill in your name. ~

For more information, contact the Dial-
A-Law service and ask for tape #110 en-
titled, “Credit Cards: Unsolicited, Lost or
Stolen”. In Metro Toronto and area, call
(416) 947-3333. Outside Metro and in the
416 area code, call toll-free 1-800-387-2920.
From Ottawa and the local 613 arga call,
(613) 233-5941. From area codés 519, 613,
and 705, call 1-800-387-2992; From area
code 807 call, 1-800-668-8525,

RRSPs — immediate tax deductions
‘In British Columbia, what’s an extra $4,000
worth? If you’re a resident of British Columbia,
paying a top federal-provincial rate (including
federal surtax) of 46.1%, an RRSP contribution of
$4,000 translates into an immediate tax deduction of
$1,844. What’s more, assuming a 10% average
annual rate of return on your RRSP, that $4,000 will
be worth $43,340 after 25 years.

ae OLS

Terrace Review —— Wednesday, February

In these days, it’s hard to
believe that borrowing can make

good financial sense. But it.can .
— and usually docs — if you

borrow to finance your RRSP
contribution. ,

To illustrate, consultants at
Terrace’s Bank of Montreal
explain, "Let’s say that the Feb-

tuary 29 contribution is just a

few weeks away. and that you’re
entitled to contribute the full
$11,500 to your RRSP. But,
after paying all your Christmas
bills, you find that you’ve only
got about $7,000 in cash. Should
you borrow the extra $4,500?

Assuming that your bank will:

give you an RRSP loan at 8.25%

repayable over 12 months, your
total borrowing cost will be.

about $196.25.

Now consider that if your
combined federal-provincial tax
rate is 45%, your extra $4,500
contribution will reduce your
taxes by $2,025. Add to this the
earnings generated by your con-
tribution — assuming a 10% rate

‘of return, that would be $450 —

and you'll end up with a total
benefit of $2,475 after one year.

Subtract the cost of borrowing |

and your net gain from borrow-
ing is $2,237."

Same time next year

You may find that you can’t

always make an annual contribu-

tion because of other financial :

priorities. For example, you may
have just finished an expensive
home renovation and, with the
RRSP contribution deadline
coming up (for the 1992 tax
year,. it’s, February 29, 1992),
you simply don’t have any more
cash available. Yet you don’t

want to miss out on your oppor-

tunity to contribute to your
RRSP. What can you do?.

Well, under the new .RRSP
rules, you can “carry forward"
your unused 1991 contribution to
future years. In this way, you
can still make your maximum

allowable contribution even if,

you can’t always make this
contribution in the current year.

Marriage contracts

cont'd from pg.i1
back? Or, what about inher!-
tances? Do you both agree
such money should become
communal property? .
Since a marriage contract isa
legal document, it's important
to consult a lawyer. He or she
will be able to advise you on
provincial laws regarding com-
munal property and may also

be able to point out factors you

and your partner hadn't con- -

sidered. You may find existing
legislation already provides for
the property arrangements you
and your spouse might wish..

Together, with your lawyer
you can also discuss when it
would be appropriate to review
and perhaps revise the con-
tract.

Good reasons to borrow Making the

or your obligations, fully. And try to make .

difference

. Unless your pension plan is

particularly generous, you'll
probably need an RRSP to gen-
erate additional retirement
income. And certainly if you
don’t belong to an RPP, your

RRSP will be nothing less than

essential. ;

It makes sense to contribute as
much as you can to your RRSP.
Why? One reason is that you can
deduct contributions from your
income, thereby reducing your
taxes. Another is that your in-

_‘vestment carnings on contribu-

tions are sheltered from tax for
as long as they remain inside
your RRSP. So your money
grows faster.

Ultimately, the value of an
RRSP is that, unlike government
and company pension plans, it
allows you to determine the

amount of income you'll have at"

retirement.

— Contributed by the Bank of Montreal

“Future
Entrepreneurs

‘© More often than not, future
entrepreneurs are loners and hate
routine; they are usually stubborn
and like to find their own
solutions to problems.
They are willing to invest their .
assets, their reputation and their
energy to resolve difficulties,
Early in life, they leam to man- .
age: a paper route,lemonade stand,
lawn mowing or babysitting.

5, 1992 13 |

e Financial Planning _ ws
“@ Income Tax Planning =.

@ Income Tax Returns Prepared

e GST Planning/Recoveries

CARLYLE SHEPHERD & CO.,
| CHARTERED ACCOUNTANTS

"The Tax Professionals "

Ste

-o.,..in- Terrace, contact:

voor JOHN G. MeMYNN ca.

a EIRNIE DUSDAL: c.m.a.
» ~~ €nd floor a
4544 Lakelse Ave., Terrace

Phone 635-6126

~ COQUITLAM @ SMITHERS @ KITIMAT ® TERRACE

a

John G. McMynn, C.A.

© PRINCE RUPERT @ RICHMOND