Case Study 3 Minute Debt Break Podcast Blog

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any Canadians feel overwhelmed by their debts and assume that bankruptcy is their only option. It's a word that carries a heavy burden and a strong stigma, and for those going through difficult times, it may seem like the only choice. 

But in reality, there are other solutions that can provide relief, preserve assets, and put a person on the path to financial recovery.

Consider the story of a client who came to MNP Debt for a consultation, already convinced that bankruptcy was inevitable. Before the conversation even began, he said, "I have to declare bankruptcy. " The pressure of debt, missed payments, and the fear of wage garnishment or even losing his home made him feel like there was no other alternative.

As we reviewed their situation, it became clear that the real problem wasn't a lack of income. In fact, their earnings were stable and their monthly living expenses remained manageable. The problem was debt repayment. The minimum monthly payments had become overwhelming, with interest absorbing almost everything they paid. They relied on credit cards just to cover daily expenses, and when payments began to fall behind, some accounts were sent to collections. This cycle seemed endless and had eroded their confidence.

The consultation process is designed to provide an overview of a person's finances. Together, we reviewed their debts, income, household expenses, and assets. They were surprised to find that bankruptcy was not the first recommendation. Instead, we reviewed all the options, including refinancing, credit counseling, debt consolidation, and even the possibility of a second income or selling an asset. Each had pros and cons, but their credit rating made refinancing impossible and consolidation unlikely.

That's when the focus shifted to a consumer proposal. By restructuring their debt through a formal proposal, they could stop the relentless interest, establish an affordable monthly payment, and keep their home. The plan would last five years, compared to the 28 years it would have taken them to pay off their debts by making only the minimum payments.

The difference changed their lives. They walked away with a plan that offered relief and a clear end date. More importantly, they discovered that bankruptcy wasn't their only option. If you have a similar story or just want to discuss your options, come talk to us. We may have some very good news to share with you.

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