Today’s guest author is Brian McIlmoye, a Bankruptcy Trustee with Hoyes, Michalos & Associates Inc. As someone who meets with people every day who are experiencing a financial crisis, he understands the turmoil people are experiencing and provides some advice for those who want to reach out and support someone in this type of situation.
At some point, everyone deals with financial problems. The typical events in life often have financial ramifications; illness, marital breakdown, business failure, loss of employment, these are all things that everyone has to deal with. Sometimes, the fallout of one of life’s setbacks can result in the accumulation of too much debt.
When these events happen to people close to us, often we are at a loss as to what we can do to help. Usually all the signs of financial problems are there. Maybe your friend is no longer available for the leisure activities that you’ve always enjoyed together. Maybe, they are driving an old beater when they always had a nice car. Other signs are a general withdrawal from social engagement with friends and family. One of the most common feelings reported by individuals dealing with debt, is deep embarrassment; they feel like they failed and they just can’t see a solution to the problem.
Sometimes, family members may ask for financial help. However, most of the time this help will only prolong the problem because the money is consumed by minimum payments or partial payments that do nothing to address the overall problem. Loaning them money can also put your own financial situation at risk.
Many people who are dealing with debt continue to struggle. They sell off property and they burn up their retirement funds, doing everything they can to avoid actually dealing with their debt.
As a trustee, I see people who come to me as a last resort. They have already tried everything else and often they have spent months or even years struggling to repay their debt. What’s worse is that those who have sold off property and investments most likely could have kept their assets had they sought help sooner.
How can I help my family member or friend deal with their debt?
Ignoring the problem, not talking about it or pretending everything will work out, simply won’t help. The best thing you can do is help that person overcome their reluctance to seek help.
A visit to a trustee for a free no obligation consultation to review their options can bring clarity to any underlying issues and reduce debt-related stress. Sitting down with a trustee does not mean you have to file a bankruptcy. In fact, the vast majority of people I help don’t file bankruptcies at all. There are alternatives such as filing a consumer proposal, that still eliminate most debts, but are a more flexible option for those that qualify.
As a concerned friend or family member, offer to attend with the person who is struggling; many people bring along a friend or family member for support while they investigate the solutions to their debt problems. A familiar person in the room helps to calm their fears. There are many misconceptions about bankruptcy that can make the process seem scary, but the majority of the things clients worry most about, are untrue stigmas.
The very best thing you can do for your friend or family member who is dealing with debt is to bring them to see a trusted professional that has the tools and expertise to help solve the overall problem. If that person was sick or hurt you would take them to see a doctor. If they are suffering under a burden of debt, take them to see a “debt doctor,” a licensed trustee.