Typical Insolvent: The Profile of Joe Debtor
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Typical Insolvent: The Profile of Joe Debtor - Money Problems Radio Show |
| Originally aired on November 11, 2006. | |
Show Topic:
On today's show we will examine the profile of the typical insolvent, the typical debtor who needs help from a trained insolvency professional. Like many things in life, the widely held opinions and conventional perceptions are different from the truth. Today's show looks at the face of insolvency and provides some insight into how good people can get into bad debt situations.
Guests:
Doug Hoyes joined us from the firm of Hoyes Michalos, & Associates, Trustees in Bankruptcy. Doug and his partner Ted Michalos started their company in 1999 and in those 7 years have helped thousands of clients take control of their circumstances, prepare a plan and get a badly needed "fresh start". Doug is a chartered accountant and a professional in personal bankruptcy.
Show Summary:
Doug reiterated that most people do have negative perceptions about who the typical insolvent is. These perceptions sometimes make it difficult to ask for help. With over 100,000 Canadians filing a consumer proposal or bankruptcy every year, these types of challenges are more common than many of us think.
According to the profile, the average insolvent is 40 years old, employed, and 1 in 5 persons owns a home. The typical debtor has had some kind of life altering event that has hurt their financial stability - like divorce, job loss or a medical problem. The approximate amount of their debt is $50,000 in unsecured debt (credit cards, bank loans, payday loans).
Doug warned that most of us are 1 or 2 paycheques away from serious money problems because our finances are so shaky. He spoke about the warning signs with credit cards, including having more than 1 or 2 cards in your wallet. Another huge warning sign of credit card problems is, according to Doug, taking a cash advance from one card to pay another. With the new legislation regarding bankruptcy laws pending, Doug advised on being proactive and planning now if you are having problems as the new laws may impact people differently. We also discussed the "Sequence of Events" (as found in the Hoyes Michalos study on Face of Bankruptcy) that leads a person into serious money problems and how easily it can occur. We spoke to "Joe", a client whose own situation eerily mirrors the findings in the Insolvency Profile and, finally, Doug outlined what debt management solutions you may want to consider including a debt consolidation loan, debt management plan (credit counselling), a consumer proposal or bankruptcy.
Don't let your money problems overwhelm you: Contact a licensed bankruptcy trustee or a credit counsellor for more information on how to avoid the traps common to typical insolvents or, if it is too late for that, for advise on how to deal with your debts.