How to help a debtor through their debt relief journey

Do your financial concerns keep you up a night? Do you feel anxious that you may lose your assets — like your car or your house? Do you run through your budget in your mind and feel embarrassed that you are losing control of your finances? If so, you’re not alone. 

With inflation costs and the rising costs of living in Canada, many people are struggling to meet their daily expenses. If this is you, it’s important to reach out to a professional to discuss your financial options.

Here’s how it can help.

Meet John and Marie

Recently, a couple asked for help dealing with their financial debt.

For the past 12 years, John, a self-employed electrician, has been earning steady income to support himself, his wife Marie, and their three children. Marie went on maternity leave in 2008 and never went back to work because she was taking care of their three children.

In 2016, John’s accountant retired and sold their accounting business to a third party. John and his family continued with the new accountant, under the assumption their personal income tax returns were being filed and submitted accurately. However, the CRA audited John’s 2012 to 2015 personal income tax returns, resulting in reassessment and a tax debt of approximately $100,000.

John was shocked. In response, he hired a new accountant he trusted to manage his business books, records, and personal income tax returns. He worked with the CRA to make payment arrangements, but he was stressed about how he would continue to manage the payments.

Then 2020 hit, and John’s business temporary closed due to COVID-19. John and Marie started using credit to cover their living expenses while still paying down the tax debt. John’s total debt grew to $128,000. Add to that Marie’s debt of $52,000, and the couple was facing a total of $180,000 in debt.

To tackle their debt effectively, John and Marie looked to see if they could refinance their mortgage. However, their mortgage lender advised that they didn’t have enough equity in their house. The couple were left feeling stressed and like there wasn’t a way out. They were afraid they’d lose their house. Creditors started calling them daily.

LITs are on your side

One day, their new accountant suggested they talk to one of MNP Debt’s Licensed Insolvency Trustees (LITs) about their financial options. The accountant had clients in the past who had benefitted from MNP’s experience and guidance.

John and Marie reached out directly and explained their financial circumstance. Our seasoned LIT sensed their discomfort and stress and assured them they were not alone. An LIT isn’t there to judge — they’re there to help, listen, and discuss debt-relief options, like Bankruptcy and Consumer Proposal. 

Based on the consultation, John and Marie decided Consumer Proposal would be the most appropriate way to manage their debt. This option will allow them to settle their debt using their house equity to fund their proposal, while at the same time keeping their home. 

The couple left the consultation feeling like a huge weight had been lifted off their shoulders. And without the stress of their debt on their minds, they’re now able to sleep at night.

MNP Debt can help

You don’t have to tackle your debt alone. It’s important to seek help if you are experiencing financial difficulty and feel there’s no way out. At MNP, our LITs are here to walk you through all your options, so you can make an informed decision on what debt-relief journey would best suit your unique circumstances.

Reach out today for a free, confidential consultation to discuss your individual needs.