Individual Canadians collectively owe a staggering $1.7 trillion, while the average debt load is now over $22,000 per Canadian. For many with mortgages, car payments, or small businesses, they are under much higher stress burdens, and it’s increasing year after year. Debt is a part of life and every year, many hard-working individuals find they just can’t keep up with their payments.
Debt management services have, over the decade, been on the rise. Licensed Insolvency Trustees exist to help people solve debt crises and manage their debts. They provide services tailored to meet the specific needs of the client. These services include ending collection calls on behalf of the clients, helping with debt consolidation, and managing credit card debt.
There are dozens of reasons people get too far into debt and can’t pay, from growing their small business to job loss or supporting a family member in crisis. However, without proper management and monitoring, these debts can get out of hand, and things can go south very fast; that’s where Licensed Insolvency Trustees can help. Here are some of the ways that they can help when you’re facing a personal financial crisis.
1. Free debt assessment
Often a firm will provide a free debt assessment, even online. They will take into consideration your monthly income, the size of your household, and the total debt that you owe. This gives them insight into how much debt you can carry and what the best way forward can be. You can find a free debt assessment form online at Davidsklar.com, which can help you get started on the road to solvency.
2. Bankruptcy vs. Consumer Proposals
When you owe more money than you can pay, you have two options in Ontario; the most radical course is declaring bankruptcy. Personal bankruptcy can be a major challenge, which is why Licensed Insolvency Trustees will try to find an alternative solution first, such as debt consolidation or a Consumer Proposal.
According to Licensed Insolvency Trustee David Sklar & Associates, a Consumer Proposal in Ontario is an understanding between the debtor and creditor to pay only part of what’s owed. If the majority of your creditors agree, your debt will be reduced considerably and a new payment plan that suits your capacity will be drafted. Licensed Insolvency Trustees provide these options to clients who are deep in debt or those contemplating declaring bankruptcy. Creditors are likely to agree to such restructuring because the alternative, bankruptcy, could leave them with no recourse to get back their loan. A Consumer Proposal can only be negotiated by bankruptcy trustees, such as a firm like David Sklar & Associates.
3. Providing credit counseling services
Credit counseling is a process in which debtors are guided and advised with the intention of reducing their debt and eventually getting out of debt. Licensed Insolvency Trustees provide professional credit counseling to clients who are in need of them. However, the needs of clients vary widely and include subjects such as how to use credit, how to restore a credit rating damaged by insolvency, and how to create and achieve realistic financial goals.
Everyone struggles financially at some point in their lives. There’s no reason to be ashamed; the sooner you get help, the sooner you can start over. While it’s only important to get sooner rather than later, it’s also of paramount importance to get professional help. Experienced insolvency trustees are not only better equipped on the financial side, they have more experience dealing with people and helping them get through these challenges.
By consulting with a professional as soon as financial trouble arise, you are giving yourself the best chances of putting these difficulties behind you. Debt can add up quickly, especially with high interest payments. As the saying goes, it’s not the problems you are faced with but what is most important is how you deal with it.
Kidal Delonix is a contributor to Mr. Hoffman's blog. The views and opinions are entirely his/her own and may not reflect Mr Hoffman's views.
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