How Does Debt Happen?

Facts About Debt 

When faced with debt, whether corporate or personal, there are plenty of viable options to assist with maneuvering through it, toward a clearer financial future. However, there are a few misconceptions of how people fall into debt. 

We’re here to break down how debt happens and why it’s not always as simple as only being money mismanagement. 

Debt is Often Fallen Into 

The common misconception is that people facing debt are just bad at managing their money and financials. While this can be the case, it’s not the only or most common reason. More often, debt and large amounts of debt are incurred when dire circumstances arise that are out of a person’s control.  

Unexpected life events such as job layoffs, health issues, relationship breakdowns, business failure, economic downturns and inflationary pressures can all swiftly push an individual into debt. These events, often beyond anyone’s control, can emerge out of nowhere, highlighting the unpredictability of debt.  

So, while it may be easy to chalk an occurrence of debt up to just bad money management skills, a lot of times, debt can come to those completely unexpectedly. Remember, no one tries to fall into debt. 

Avoid Debt with the Right Preparation 

One way to avoid debt, should one of these unforeseen circumstances throw a curveball into your life, is through preparation, by creating and contributing to an emergency fund as much as possible with any monetary amount you can.  

Building up an emergency fund will give you some breathing room with dire situations such as these, giving you something to fall back on during hard times and increasing your chances of avoiding debt altogether, or at the very least limiting the severity of debt fallen into. 

Contact a Licensed Insolvency Trustee 

Falling into debt creates an emotional whirlwind, sending people into an online search engine frenzy. What do I do? How do I get out of debt? What are my options?  

Unfortunately, a lot of stress can come from the unknown and misleading information that can be found on the internet or through other people. There is nothing wrong with doing preliminary research on the internet, but it is strongly recommended to contact a Licensed Insolvency Trustee prior to making any decisions regarding your personal financial situation.  

Our Licensed Insolvency Trustees will provide a free consultation to gather your financial information. Once the financial information is gathered, they will discuss your options and clarify any misinformation or misconceptions you may have read online or heard from others. 

What Are the Options? 

Our Licensed Insolvency Trustees can help navigate financial uncertainty through personal bankruptcy or a consumer proposal. The gut reaction to these options is usually the feeling of embarrassment, fear, shame or failure.  

There is often worry about the outcome of bankruptcy or a consumer proposal, and a feeling they should be avoided. This is not true. 

Most of the stress stems from the unknown, which can be blended with misinformation found online or through the wrong sources. However, bankruptcy and consumer proposals are viable options when dealing with debt.  

Filing for bankruptcy or a consumer proposal will often allow an individual to re-establish their credit rating faster than if they didn’t file a bankruptcy or a consumer proposal and help get back on financial track. 

We’re Here to Help  

If you want to learn more about debt or get your financials back on track, our Licensed Insolvency Trustees are here and ready to help; contact us anytime! 1-877-944-1177 or