Every day I meet with people who are stressed out about debt. I think it’s fair to say that people are stressed out about debt today more than any other time in the recent past.
But is it the debt that is the problem?
Maybe you have recently lost your job, maybe you were laid off a few months ago now and it’s looking like you won’t be called back soon or at all. I know for certain that I meet with people every day in my Mississauga and Brampton offices that are in this situation. When we sit down and review their budget we find in many cases that there is a lot more money going out than coming in. In many cases people stopped paying their debts some time ago, but still they are hundreds ( and in some cases ) thousands of dollars short each and every month.
The result of this shortfall is ballooning debt. The shortfall gets shuttled onto credit cards and lines of credit until there is no more credit to consume. Everyone is “hoping” things will turn around soon, then their household economy hits the wall. With no more credit and a running deficit in the budget the problem can no longer be ignored.
The problem feels like there is too much debt, because that’s who is making all the noise, creditors are calling and everyone wants paid. You feel like, “if only I could get rid of this debt everything would be ok” but really.. it won’t . The problem remains, not enough money coming in and too much going out.
If this is the case, then changes have to made to deal with the deficit, expenses have to be reduced and belts tightened, this could mean big changes. You may have to sell your home ( or surrender it to the mortgager if its value has dropped below what you owe on it ) you may have to give up a car, you may even have to take up a second job or take 2 part time jobs to replace a lost full time job. Every possible solution has to be considered and reviewed.
Bankruptcy or a Proposal to creditors is for many people a viable solution for debt, but it won’t solve a budget deficit if you have already stopped paying your creditors and still can’t make ends meet.
Once you have your budget under control, then it’s time to deal with your debts. A proposal to your creditors or a filing of personal bankruptcy could be your first step back to financial recovery.
Every recession ends and financial recovery will happen, personal financial recover will happen as well. If you need some help to get there Hoyes Michalos & Associates Inc. can help you.
Call 310-PLAN today and let’s get started.
