Missing Payments? When to Seek Debt Help

It’s happened to your friends. It’s happened within your family. It’s happened to people you see everyday. What is it? Overwhelming consumer debt. And even though it is so common, many of us have no idea what to do because people don’t like to talk about it.

How common is overwhelming debt?

Out-of-control consumer debt is very common. In most years, over 100,000 Canadian consumers need a Licensed Insolvency Trustee’s (LIT) help with their debts. Many visit Bankruptcy Canada to learn more about the solutions to overwhelming debt and to connect with a trustee.

Credit companies and banks offer almost boundless credit to consumers, in full knowledge that a significant percentage of their customers will not be able to pay their debts as expected. For the credit companies, it’s just a way of doing business, and one of the risks they undertake.

For consumers, overwhelming debt can cause extreme stress, relationship issues, health problems, and anxiety.

Most of us are optimists and that can lead us into a situation where we purchase too much, relying on the idea that we will be able to pay later.

The worst part is we are often too embarrassed to seek help.

Will my debts get better on their own?

Your debt problems won’t go away if you do not make significant changes to your spending habits or your income.

This is largely because interest rates on consumer debt tend to be high – often over 20 percent per year. Once the debt is established, it sustains itself because of the interest that is added every month even if you are making substantial payments. It is not unusual for consumers to find themselves paying more than $1,000 a month in interest alone to credit cards. The balance will decrease very slowly or not at all if you continue to make purchases.

How do I know I need help with my debt?

Since you’re reading this article, it’s likely you are already concerned enough to do some research. You’ve already taken a very important step admitting that you may not be able to solve your debt problem without some more information or help.

If you’re still uncertain, here are some key signs that your debts are reaching a point where you can’t control the situation:

1. You begin missing payments or making late payments. Although some consumers miss occasional payments because they are disorganized, if this is happening for the first time, you likely know something needs to be fixed.
2. You use one credit source to make a payment into another. This is also known as, “borrowing from Peter to pay Paul.” It’s a sign that you don’t have enough money in your bank account, or cash to keep going.
3. You open new credit accounts to ease the pressure. This is related to #2 but takes things a step further. Although you’ll tell yourself, “I’ll zero this account every month,” soon you will find its balance growing, especially if your other accounts are at their limits.
4. You are suffering anxiety/insomnia because of your financial situation. At this point, you know you need help. The good news is help is available.

What to expect when I meet with a trustee

Most people who meet with a LIT are pleasantly surprised that the trustee understands their situation and can offer practical solutions. Sometimes, several potential solutions can be reviewed. The trustee will help you navigate to the debt solution that will serve you and your creditors best.

Your first meeting with a LIT is absolutely free, and confidential. You won’t be pressured to decide anything, but you’ll learn about your options. Try to have some numbers – even rough ones – available concerning your monthly income and expenses, and your assets and debts. The trustee will be knowledgeable about many solutions, ranging from credit counselling to debt consolidation, and including consumer proposal and bankruptcy, and may recommend one or more that apply to your specific situation.

This is possible because LITs undergo professional training on consumer debt. They know how it occurs and can counsel you on how to prevent spiraling debt from reoccurring. Although you’ve probably been hard on yourself because of your debt, and may feel embarrassed, a trustee knows that your situation has nothing to do with your character.

Don’t wait! Learn more from a Licensed Insolvency Trustee today

There’s no risk in seeing a trustee to learn more about your options. There is also no obligation. If you and the trustee develop a good rapport and you undertake a consumer proposal or bankruptcy, you may decide to work with the same trustee through the process.

Most people who visit a trustee come out feeling much less stressed, because they can see the road ahead to a much better financial future. So, don’t wait. Contact us for a free, no obligation, confidential consultation to find a Life-Changing Debt Solution that fits your unique situation.