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Today, they are about to begin their second counselling session. With a better idea of the process, Simon and Molly are looking forward to continuing their journey to a better financial situation and improved relationship with debt.
"What are you going to teach us today?" Molly asks, reaching for a booklet on Joan's desk.
"First, I'd like to review how your budget and money management processes are coming along," Joan replies. "I know you were struggling before our first meeting, so I'm interested to see how you've progressed over the last few weeks."
The couple nod, looking noticeably more confident and self assured than the last time she saw them.
"Then I have some new concepts to work through which I think will really benefit you both," she adds.
"We'll look at some non-budgetary reasons that lead to insolvency. I'll share some helpful resources that can help you stay on track. And, as promised, I'll walk you through how to rebuild your credit once you receive your discharge from bankruptcy."
"Sounds good," Simon replies as he looks over Molly's shoulder at the handout.
Review and Savings Goals
Joan asks Simon and Molly how their budgeting process has progressed over the past month.
Molly explains they've not only set a time each payday to discuss their budget, but also a separate time to complete a monthly report. Simon offers that the guidelines and worksheets were a big help in establishing their routine and that they've already uncovered areas where their budget is leaking and how to fix it.
"Best of all, we didn't argue too much!" Simon laughs.
"Keeping receipts and tracking everything like you suggested was an eye opener," Molly adds.
Pleased with their progress, Joan asks about any challenges they encountered along the way and whether they've set any financial goals. Though they seem eager, both appear hesitant to commit to any financial goals.
"Right now, focusing on sticking to your budget and focusing on open communication is a good goal," Joan explains.
Looking ahead to when the bankruptcy is completed, you could consider some other goals. Like allocating your current bankruptcy estate payment towards building an emergency fund or saving for something specific you can work towards once the bankruptcy is finished.
Non-Budgetary Causes of Financial Difficulties
Joan passes a worksheet to Simon and Molly and asks them to read it over. It's a list of common reasons people find themselves in financial distress.
"You'll notice many of these are addictions related," Joan explains. "Gambling, drugs, alcohol, even shopping... I know none of those played a significant role in your bankruptcy. But they underscore how certain personal challenges are more financial in nature than they appear at first glance."
She asks them to identify which items resonate. She's encouraged when Simon and Molly point to many of the same – with inadequate family role models, medical issues and chronic stress rounding out the top three. Joan asks how those factors have affected them and offers suggestions on how they can better prepare for and manage similar situations in the future.
She reinforces the importance of communication. Especially when it comes to stress, which is a broad umbrella which blankets most (if not all) the other factors. She explains how understanding how one another is feeling and coping with challenges can be the key to get past them.
"I've been guilty of holding it in," Simon concedes. "But regularly talking about our finances has shifted my perspective on many of our previous troubles."
Resources to Prevent Future Financial Distress
"I'm glad to see you two are so engaged with this process," Joan says. "Because, unfortunately, multiple bankruptcies are on the rise. And as much as I like you both, I really don't want to see you back here."
She explains that anyone who files for bankruptcy faces two options: One is to continue down the same path – overspending, blaming others for poor financial decision making, not taking accountability and refusing to ask for help. The other is to make the necessary, and often difficult decision to change – to create a budget, curb spending, communicate openly and seek assistance when it's needed.
"If you follow option one," her words hit bluntly, "I can all but guarantee we will meet again."
Simon and Molly's eyes widen. Both are visibly distraught at the prospect of having to repeat this process.
Joan softens her voice and assures them she's confident they're moving in the right direction.
"There will still be bumps along the road," she cautions. "But navigating them is easier when you know when and where to ask for help."
She instructs them to flip to a page in their counselling booklet, which includes contact information for everything from addictions counselling and support to consumer education websites. Joan asks Molly to write down several additional resources that she believes would be particularly helpful given their unique challenges.
"These are your lifelines," she says. "If you ever feel like you're even at risk of drowning, use them!"
"Remember in the last session, you asked me whether you'd be able to buy a house someday, Molly?" Joan asks. "Or buy a car?"
"It's definitely a long-term goal," Simon replies.
"We realize it will take several years. But we're willing to be patient and do whatever it takes to rebuild our credit, so we can get what we really want – not just 'stuff'," Molly adds.
Joan praises the couple for being realistic. She explains that rebuilding their credit will take time, but also that it's worth thinking about now so they can begin goal setting, planning and putting the pieces in place. She also cautions that not all credit vehicles are equal nor are all credit products suitable for them right now.
Additionally, Joan offers different strategies Simon and Molly may want to consider that will help them build and maintain good credit – including applying for secured credit cards, discussing RRSP loans with their bank and how mortgage brokers can help them rebuild their credit for specific purposes.
Finally, she emphasizes the importance of getting a requesting their credit report immediately after their bankruptcy is discharged and annually moving forward.
"As a consumer, you are the only one who can bring up any issues on your credit report to the credit bureaus," she says.
"They have to follow through and investigate any mistakes. Among other things, like preventing identity theft, correcting any misinformation that may hinder your credit rebuilding goals is vital for protecting your future financial stability."
Nearing the Finish Line
"You will receive your discharge certificate in the mail when you're officially done with your bankruptcy," Joan explains. "Make some copies and keep the original in a safe place – just in case anyone needs to see it."
She smiles and slides a counselling certificate towards Simon and Molly. "I know this isn't the one you're really looking forward to, but trust me when I say it's still an accomplishment worth celebrating and one you've more than earned."
"Thank you so much for everything," Simon says graciously as he reaches out to shake Joan's hand.
"You've been so, so helpful," Molly adds as she reaches out to do the same. "For the first time in a long time we genuinely feel confident about our future."
After walking Simon and Molly to their car, Joan returns to her office to make some final notes and file her copy of the counselling certificate. Confident they took the sessions to heart, she takes a moment to visualize how their post-bankruptcy life might look and feels grateful for the role she got to play.
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