Buried in Debt: How to Know It’s Time to Talk with an Insolvency Professional

For years, you’ve been completely independent, able to pay all your bills on time. But now, your life has been thrown for a loop, and you find yourself in a desperate financial situation.

Although it takes a lot of humility to do so, remember that it’s okay to ask for help. When you can’t handle your debt on your own, the best way out is to consult with a professional.

How do you know it’s time to turn to an insolvency firm? Here are some signs.

You can’t meet your basic needs:

  • You’re falling behind on living expenses
  • You’re starting to use only credit to pay for basic living needs
  • You borrow money to pay for living expenses
  • You can’t support your dependents (spouse, children, or elderly parents)
  • After making your credit card and loan payments, you don’t have enough left for basic living expenses

You can’t keep up with your bills:

  • You’re living from pay cheque to pay cheque
  • You’re receiving endless calls from creditors, bill collectors, and collection agencies
  • You make only minimum payments on your credit cards
  • You are constantly using your overdraft
  • You can’t keep up with your mortgage payments
  • You’ve started borrowing from your retirement fund

You’re experiencing significant consequences of debt:

  • You keep trying to pay off your debts but the balances won’t go down
  • You have little or no savings
  • Your debts are causing you significant physical and emotional stress
  • You owe more money than the value of your assets
  • Your wages are being garnisheed or your assets have been seized

If several of these signs are true for you, it’s time to visit an insolvency firm. Typically, you’ll meet with a trustee to discuss your options. Bankruptcy may be your best option, but it’s not the only one. It may be best for you to consider one of the following:

  • Debt Consolidation Loan: You obtain a loan to pay off your creditors in full and then make a monthly payment to your bank.
  • Credit Counselling: A professional will advise you on money management techniques and budgeting strategies.
  • Orderly Payment of Debt: The court grants an order to consolidate your unsecured debt; you make a monthly payment to Money Mentors, who distributes the debt.
  • Consumer Proposal: You make a negotiated settlement to pay your debts over a specified period of time.
  • Bankruptcy: If the above options are not ideal for your situation, filing for bankruptcy is often the most effective solution.

If you’re in Alberta, visit one of the offices of Faber. Our team of professionals are highly experienced and can help you break free from debt and regain financial stability.