According to Bloomberg, roughly 500 thousand Canadians filed for unemployment at the height of the pandemic lockdown.
This grim number should tell you that you are not alone if you’re struggling with your finances. Even before the pandemic, roughly 100 thousand Canadians filed for bankruptcy every year. They are hardworking folks who got overwhelmed with their debt.
There is no shame in filing for bankruptcy. On the contrary, it is an incredibly courageous move to say that you need debt relief and that you’re taking steps to fix it. By making this first move, you are on your way to financial freedom. If you are not sure if you should declare bankruptcy, then pay close attention to this article.
Unexpected Disaster
Contrary to popular belief, bankruptcy is not usually the result of poor financial decisions. Most of the time, the reason why we went into debt was beyond our control. You might have taken significant home repairs after a catastrophe such as a fire, flood or simple renovations. These unexpected disasters often force people to borrow money because they do not have sufficient savings or insurance to deal with the issue.
Loss of Income or Unemployment
Most organizations that offer debt relief believe that bankruptcy is often the result of one catastrophe following another. It has a snowball effect which would end with the debt consuming and controlling the debtor.
The loss of income or unemployment would often complicate matters because you would make timely payments. We witnessed this phenomenon during the pandemic as millions lost their job or worked in reduced hours.
In recent months, more women left the workforce to take care of their families. Time Magazine pointed out that mothers had to sacrifice their careers to take care of their children. This dynamic forces the family to work on a reduced income.
In this situation, you, like so many others, would often use your credit cards, lines of credit or even use pay day loans to take care of their daily needs. As a rule, when something like this happens, you should immediately try to cut back on your spending. Doing this will lessen the possibility of your financial problem snowballing and the use of additional credit.
Illness or Medical Problems
Watching a loved one in tremendous pain is distressing. We would do everything to take away their suffering. There is nothing wrong with wanting to get the best medical help for your loved one.
Sadly, our provincial health insurance or private insurance does not cover all medical costs. It is because of this that many people would go into debt. If you are undergoing medical care, you may need to take time off from work to recuperate. Thus, it leads to income loss in addition to spending money on a medical emergency or trying to get healthy.
Matrimonial Separation or Divorce
Many people know the emotional stress and tolls that separation and divorce ca cause, but there can also be a large financial stress. Separation and divorce usually leads to people needing to rent two different places instead if one. This can be a big stressor as many people struggle to live on their own. People often incur loans, car payments, mortgage payments, subscriptions and even credit card debts, but they usually do so knowing that they have two incomes. When they separate, the ability to service this debt becomes much more difficult to do so. To make financial matters worse, often there are child support or spousal support payments that make meeting ongoing bills very difficult and many people seek the help of a Licensed Insolvency Trustee.
Conclusion
Past generations often shy away from debt relief solutions. They often tell us to keep a stiff upper lip and find a way to solve our problems without asking for professional help. But doing this will exacerbate the situation. The wise thing may be to file for bankruptcy or consider a consumer proposal.
Taking this first step will help you get back control of your life. You will eventually recover from this setback only if you declare bankruptcy.
Paul J. Pickering and Associates Limited is a Licensed Insolvency Trustee firm in London, Ontario. We can help get your finances in order, so you can lead a debt-free life moving forward with our different services.
If you’re looking for help with debt and your ongoing payments or if you want to review your options and learn about consolidation loans, debt management programs, credit counselling, financial counselling, proposals, consumer proposals and bankruptcies, we at Paul J. Pickering and Associates Limited are here to help you.
We have over 30 years of experience in helping our clients resolve their financial problems. We specialize in debt management, proposals. consumer proposals, debt counselling and bankruptcy in London, Ontario. Whether you’re starting to get overwhelmed and you don’t know how to handle your debts and minimum payments, contact our office today for your free initial consultation, and we’ll put together a plan that will work for you!