Over the years William worked hard and was a good provider to his family. He worked his way up the ladder of a large telecommunication company. He invested carefully during his working years, mostly buying stock in the company he worked for and contributing to his pension plan. Mary was a stay at home mother and they both looked forward to their retirement years. In a perfect world they would spend their winters down south and return home during the summer.
When William retired they had a small amount of credit card debt and even though his income was a little less than when he was working, they didn’t have any difficulty keeping up with their payments.
Fast forward a few years and the huge multinational company that he worked for announced they were in financial dire straits and filed for protection from their creditors. As a result, William’s investments became almost worthless overnight and over the next few years their pension income was reduced several times. Their reduction in income caused them to become reliant on their credit cards to cover their living expenses. Their credit card debt grew from a small amount they thought the could pay off in time to something totally unmanageable.
William called us desperate for a solution but unhappy that after a life of relatively responsible money management he found himself talking to a bankruptcy trustee. I was able to assure him he is not the only person experiencing a similar upheaval. Many insolvencies happen not because of financial mismanagement alone but because some underlying financial catastrophe caused someone to turn to readily available credit to keep up.
I met with William and Mary to discuss their situation and gave them some options to help them. After considering the fact that they needed to deal with their credit card debt and rebuild a life on a lower income level than expected, they decided that they wanted to file a consumer proposal. Together they worked on a monthly budget to determine how much they felt they could offer their creditors each month. Filing a proposal offered them immediate relief from their crushing debt and resulted in payments that would be less each month than if they filed bankruptcy. Their creditors accepted their proposal and they are currently making those agreed payments.
When I met with them recently during their counselling session, they mentioned how grateful they were that there was help available for them and that the process wasn’t as bad as they thought it would be. They had never heard of a consumer proposal until we had met. By filing a proposal, they avoided bankruptcy and got the debt relief that they needed. While they may not be able to winter in the south, they have readjusted their living costs to match their new financial reality and can at least sleep better at night.
If you or someone you know can relate to William and Mary’s story, contact a Toronto bankruptcy expert for more information about how a consumer proposal could be the right option.