Are You Drowning in Debt? Take Action!

Sometimes, it’s difficult to know when to make an appointment with a licensed insolvency trustee. Many people wait until they’re in a serious financial situation before doing so. However, the sooner you get professional help, the less damage there will be. Here are examples of situations you should be able to recognize to know when it’s time to act.

1. You have accumulated unmanageable debt

At the end of every month, it’s the same old story: you can only make the minimum payment to cover interest. Your debt is not decreasing, but even worse, it’s increasing because your other expenses are adding to the amount owing. After having paid your bills and the minimum payment on your credit cards, there’s often nothing left in your account. Sometimes, your account is in the red.  You have the impression that this mountain of debt will never disappear. You’ve also come to realize that this situation has been going on for several months, or even a year, and has not improved.

2. You’re getting calls from your creditors

As you’re only making minimum debt payments, your creditors are getting impatient. Telephone calls, letters of complaint: they’re constantly after you. Some even threaten to charge you late payment penalties and increase your interest rates.

3. You can’t negotiate with your creditors

You tried to negotiate an agreement with your creditors, but they did not accept your proposal. Things aren’t going well: your credit rating is not excellent, you have significant debt and your job is insecure.

4. Your creditors are threatening you with seizure or sale of assets

Every month, things get worse between you and your lenders. To recover what they’re owed, some have called on the services of a debt collection agency or a bailiff. Calls and notices multiply. The pressure is on and your morale is low. As you have not paid the amounts due, your accounts have been frozen. The collection agency will ask you to repay the outstanding balance, plus penalties and interest. If you fail to do so, it will take you to court and, if the judgment is in its favour, it could seize your money, wages or other assets.

5. You lost your job or your income has diminished

Unfortunately, your income is not the same as it was a few months ago, because you lost your job. Despite your best efforts, you are unable to repay even part of your debts. Furthermore, you are forced to use your credit card more to compensate for this lack of money. The downward spiral of overindebtedness is just around the corner.

6. You owe money for taxes

You have not paid taxes in the past few years and you have tax debt. The longer you take to pay off your debt, the greater the interest and penalties. What’s more, the Canada Revenue Agency and Revenu Québec have very effective tools at their disposal, such as wage garnishment, freezing of bank accounts, seizure and sale of property or assets to force you to meet your obligations. For more information, read our article on tax debt.

7. Your vital needs are being affected

You’re in so much debt that you have to use your credit card to pay for essentials like rent or groceries.

8. You don’t have any savings

You’re already struggling to pay your bills and make the minimum payment on your credit cards. Needless to say, you have no savings. Savings are not part of your budget, and haven’t been for many years.

9. Your debt is a source of conflict

You feel ashamed because your debt prevents you from offering your partner and family the life you would like. Your financial problems are increasingly becoming a source of conflict with those you love.

10. You have run out of solutions

To get out of debt, you tried to negotiate better interest rates with your creditors, but it didn’t work. You also asked your bank to consolidate your debts, but it wouldn’t give you a loan. In short, you don’t know where to turn.

If any of these situations apply to you, it’s time to take action to stop your debts from ruining your life. You are clearly in debt. One of our licensed insolvency trustees can help you find a solution. They are also the only professional who has the right to administer a consumer proposal or bankruptcy. Don’t wait too long to ask for assistance. We can help you return to financial health.

Do you have a lot of debt? Don’t hesitate to contact one of our counsellors in financial recovery. They will guide you towards solutions to reduce or eliminate your debt.