I received a call from a woman yesterday from the Kitchener-Waterloo area. She was calling in about her situation and wanted to work out a plan for the future that would help her deal with her debt load. The caller was divorced and her children were grown and was therefore, living on her own. Due to a medical issue, she had been off work for a period of time, which resulted in use of credit cards to maintain living expenses. After returning to work, she consolidated her debts but advised me that she could not keep up with her living expenses and the consolidation loan payment, so her credit cards were used again to fund the short-fall each month. Now with interest and monthly minimum payments, she cannot sustain payments to her creditors.
A summary of her situation is as follows:
- Debts: – $18,000 in credit cards, – $16,000 in a bank loan for a prior consolidation of her debts, and – $900 in bank account over draft.
- Assets: – a 1996 Chevrolet Cavalier, value at $2,000, – Locked-in retirement account (LIRA) of $28,000 from a previous employer, and normal household & clothing.
- Income and Expenses: – take home pay of $1,900/month, – $150 of medical expenses per month, and – rent, food, utilities, vehicle gas & insurance, etc taking the better part of $1,500/month
After briefly discussing her situation over the phone, we have booked a free consultation for her to come to our office in Kitchener to discuss her options. What she discovered however just by making the call was that we could have a good preliminary conversation, even over the phone, about her circumstances. Now she knows roughly what to expect when she does come in.
At this meeting, we will review her financial situation further, cover any immediate concerns in more detail and discuss various items such as garnishment, co-signers, credit rating, legal action, payments required, windfalls, tax returns, etc. Some of these may or may not pertain to her personally. We will also discuss the various ways to deal with her debts, including the formal options of a debt management plan, a consumer proposal, and a personal bankruptcy. The impact of each option is reviewed through an analysis of the pros and cons to each, based on her situation.
As you can see, a consultation with a trustee in our office is free, informative and not really scary at all. It’s a chance to look at your situation and review your options. No-one will pressure you into a decision. The idea is to explore your options and find a way to provide you with a better future. If you are struggling with debt, contact our Kitchener office for a free consultation today.