Struggling With Debt Tackle Your Finances Head On

Still applicable in 2022, the following article was published in the April 2016 edition of the District News.

Hiding from the reality of your financial situation will do nothing to improve it. People have a predisposition to hide from the truth, especially when the truth is ugly. Unfortunately, we see this every day.

People come into our office, and we go through their situation. The free consultation is to review their debt-relief options, including consumer proposals, personal bankruptcy.

In many cases, it is clear that a dire financial situation has existed for quite some time. If the situation had been identified and addressed earlier our services may not have been needed. This is not the case for everyone that we meet, however.

Some have suffered misfortune or other life events that have created a dire financial situation despite the fact that they have good money management skills. Separation/divorce, loss of a high paying job, and illness can all be reasons that people are unable to manage or repay their debts.

In this article, we will focus on the ostriches (those that stick their head in the sand to avoid facing the financial ugliness).

We don’t pass judgment on how or why people arrive on our doorstep. No one can change the past. We try to find a solution that addresses their current situation to regain control of their finances and move forward with life. But, we do hope that they will learn from the experience and understand how they got into their situation, so that meeting with a Licensed Insolvency Trustee is only a once in a lifetime event.

We live in a credit culture bombarded with easy credit and never-ending ways to use that credit to satisfy today’s wants and needs without thinking about the cost. This, combined with poor financial literacy, leads many to build a mountain of debt, which is impossible to climb.

The most obvious way people avoid looking at the reality of their situation is by not sitting down, putting everything on paper and seeing where they are. Make a list of all sources of income, monthly living expenses, and your debts and monthly payments. How do your expenses compare to your monthly income? Do you know where your money is going every week, month, year?

Understanding your situation will help you make rational decisions about your future and help you identify and address any problems before things get out of hand.

You can’t prepare a budget if you don’t know where your money is going in the first place. If you don’t do a budget and start planning for your financial well-being, you could be looking forward to a meeting with us before long. It’s best to control your financial world now as no one else is going to manage it for you.

For the next few months, account for every dollar in and out. Write everything down on paper or use a computer spreadsheet. People generally know what their rent/mortgage, utilities, and car payments are and make sure these bills get paid each month. However, expenditures on food, extra-curricular activities, eating out / coffee, gifts, money to kids, are items that are often left unchecked can add up to significant amounts.

The tracking of money in and out is critical and can be where the light goes on. It gives you the base of information you need to see where you can save in the short-term and what expenses you need to change in the medium and long-term to achieve your financial goals.

Budgeting and managing your financial world is something you need to do actively. Initially, it will take some work but, over time, you will get it down to a routine and be able to quickly identify when something is going off-track and deal with it before it becomes a bigger problem.

Thankfully, Canadians who are in financial distress have access to an efficient insolvency system that lets people in financial difficulty reset their financial worlds to move forward. The Canadian insolvency system can be a financial fresh start, for individuals struggling with debt.

If you find yourself in a difficult financial situation and cannot manage it yourself, you can contact us for a free consultation.

Powell Associates Ltd. is a Licensed Insolvency Trustee. We are experienced, hands-on insolvency practitioners who understand the personal impacts of significant financial stress;

• You won’t be stuck in an assembly line process.

• You will expect and receive prompt responses and resolution of issues from our supportive and experienced team.

• We will review your debt solution options, including filing a consumer proposal or personal bankruptcy.

• We help Canadians with overwhelming debt get fresh financial starts.

Once you file a consumer proposal or personal bankruptcy, we deal directly with your creditors on your behalf. Your unsecured creditors are required to stop contacting you or continuing legal proceedings against you. Contact us for a free consultation.

We offer free consultations to review your financial situation and practical debt resolution options.  Contact us to discuss your situation over the phone, a video chat, or in-person in Saint John, Moncton, Fredericton, Charlottetown, Dartmouth, or Miramichi.