The purpose of this blog is to make taking the first step to see a Licensed Insolvency Trustee (“trustee”) easier by reading about others who started their path to financial freedom by reaching out to a trustee.

Free, initial consultation

An initial consultation with a trustee is free of charge and the trustee has an obligation to review all possible solutions with you.

I recently met with a couple (let’s call them Joe & Carol) that were struggling to pay down about $60,000 in debt.  They both had full time jobs, earned a good monthly income and were lucky to have a low monthly rent payment.

We started with a review of their monthly expenses.  When we added up the amount they spent on entertainment and food for a family of two, it quickly became apparent that they needed to make some changes to their spending.  I recommended that they track every dollar they spend for a couple of months so they could make informed decisions on where they could spend less.

Debt Relief Solutions

Based on their unique circumstances, we discussed the following solutions:

  • Debt consolidation loan for $60,000. They had already spoke to their bank and didn’t qualify.
  • Debt management program through an accredited credit counselling agency to pay their debt in full.
  • An assignment in bankruptcy would result in surplus income payments of around $43,000 and they would have to settle on the equity in one car of approximately $2,000. The total anticipated payments of $45,000 plus losing their tax refunds and the reporting on their credit rating didn’t make sense to them to eliminate $60,000 in debt.
  • They could offer their creditors a consumer proposal payable over 5 years. Since a proposal must offer more than what is available in a bankruptcy, we discussed offering a proposal of $51,000 payable at $850.00 per

Path Moving Forward

Joe and Carol decided that they were going to reduce their expenses and pay down their debt on their own.  They were going to concentrate on their highest interest-bearing debt first to reduce interest costs.  They were very grateful for the opportunity to review possible solutions and move forward with a plan to tackle their debt.

If you are struggling with overwhelming debt, reach out to me today to take the first step to your fresh start.

Kathy LenartBy Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)