Every year more than 120,000 Canadians find themselves so deep in debt that filing insolvency becomes the only way to recover. It’s not the path of choice for anyone. No-one takes on debt assuming they won’t be able to repay what they owe. For most, it’s the combination of overwhelming debt levels without an adequate safety net that leads to bankruptcy.
The warning signs are common. You continue to rely on credit in all it’s forms including bank overdrafts, mounting credit card bills and payday loans. You soon find yourself over your borrowing limit and your ability to make the monthly payments. This can lead to collection calls and family arguments about money.
If you think you are at risk of filing bankruptcy here’s how you should react:
- Don’t panic.
- Don’t continue to borrow money. You’re just digging a bigger hole.
- Don’t borrow from friends & family unless it’s a permanent solution. Don’t just transfer debt from one source to another.
- Don’t ignore the problem.
- Do create a budget. You may find you can pay off your debt on your own without the need to declare insolvency.
- Do track your spending. Even if bankruptcy is your final option, you want to take corrective action to stop the financial bleeding.
- Do consider all debt relief options. Your situation may be dire enough to seek help, but bankruptcy is not the only solution.
- Do talk to a reputable debt advisor. Get good advice. Do your homework. Make sure the approach you take is going to rebuild your future.