Who is Joe Debtor?

Every two years, Hoyes, Michalos & Associates Inc. reveals the results of its study into what the typical insolvent person looks like.  They term this theoretical person “Joe Debtor.”   At first glance, Joe Debtor does not look that different than the average Canadian: similar family profile, similar income levels, etc.  “Where “Joe Debtor” differs from the average Canadian is in his level of debt,” cautioned Ted Michalos, trustee in bankruptcy and co-founder of Hoyes, Michalos & Associates Inc.  “The average Canadian has consumer credit, excluding mortgages, of less than $20,000.  “Joe Debtor” owes almost $60,000.”

Consumer debt is pretty wide ranging in terms of what it includes.  The most common types are personal loans, lines of credit and CREDIT CARDS. “Carrying a balance on one or more credit cards is a recipe for financial disaster.  Owing money on credit cards and other debts leads “Joe Debtor” to the financial abyss, because he’s paying more than he earns each month to service his debt,” concludes Douglas Hoyes, trustee in bankruptcy and co-founder of Hoyes, Michalos & Associates Inc. So, how do you know if you have too much debt?  Here are some warning signs:

  • You are using credit to pay other bills – “robbing Peter to pay Paul”
  • Collection agencies are calling
  • Creditors are threatening legal action
  • You are using payday loans to make up cash shortfalls
  • You are losing sleep worrying about your finances

If you think you might be in over your head, you do have options to get out of debt.  The options include (but are not limited to) a consumer proposal or personal bankruptcy.  Some people will caution you about talking to a firm that provides bankruptcy services because they “work for your creditors” or will try to convince you to file for bankruptcy. Our role is to spend some time with people to help them understand the pros and cons of all of their choices given their particular circumstances.  Bankruptcy is a last resort.  If you could sell or refinance assets to pay your debts, we’ll talk about that.  If you could make changes to your spending habits to pay your debts, we’ll talk about that too.

It’s all about having a plan. Contact us today so we can talk about solving your debt problems.