WARNING SIGNS OF IMPENDING PERSONAL BANKRUPTCY

If you are struggling with debt, you may know firsthand that it can get out of control quickly. You may take actions that provide short-term relief, such as borrowing on your credit card, taking out pay day loans, but these actions are not always viable solutions to manage your debt long-term. Have you found yourself staying up late at night or feeling distracted at work, worrying about debts owed? You may be forced to decide whether you can make your next rent, car, or credit card payment.

If you are unsure if you need financial assistance, the following are some of the indicators of significant debt stress which will help you to decide.

INDICATORS OF DEBT STRESS

• Exceeding spending limits & past due accounts

• Experiencing calls or collection letters from bill collectors

• Only paying the monthly minimum amount due and often using your credit card as a source of payment

• Holding “maxed out” credit cards

• Credit refusals

• Unexpected job loss

• Experiencing arguments with family or friends over money problems

• Repeatedly asking to borrow money from friends and family

• Unexpected high financial costs, such as separation or divorce

• Relying on payday loans

• Fear of eviction from your home or apartment

• Your car being repossessed and losing your essential transportation

• Behind in your support payments and garnishee of your income

• Having your spouse or relatives make payments or purchases for you

• Feeling isolated and depressed

• Gambling

If any of the above apply to you, these warning signs are indicators of a debt problem and should be addressed as soon as possible before the your situation gets out of hand. If you are unsure if you are experiencing the initial stages of being unable to repay your debts, speak to one of our licensed insolvency trustees serving Ottawa and surrounding areas of Eastern Ontario for more information. Early recognition allows for more financial options and saving assets which may be a priority to you or your family.

DIFFICULTY PAYING BILLS

Being unable to make a payment that is due is one of the first warning signs of financial distress. If your debts are not managed within your or your family income, interest will begin to accumulate on the amount owed; your obligations will increase and creditors will soon thereafter be in contact with you.

BORROWING ON YOUR CREDIT CARD

Borrowing on your credit card may seem at first to be a quick and easy solution with low monthly minimum amounts, however; borrowing on credit can become expensive and this step is only a temporary remedy. Often the credit card companies will charge you an interest fee on the amount that is withdrawn, and this is charged daily on the withdrawal date (instead of on the credit card due date). Furthermore, your debt can increase quickly if you do not repay the total amount outstanding when an amount is due. In the end, this is not a solution.

PAYING ONLY THE MINIMUM AMOUNT DUE

When you only pay the minimum amount, the balance owing is subject to a high interest rate and can take years to repay. Every credit card company is required to disclose how long it will take to repay the outstanding balance. Many individuals are unaware of the time frame to repay when paying minimums. Check your statement for this information.

While you may buy time, it is an expensive and costly alternative by failing to pay for the amount due in full for a purchase made. Remember, if you cannot pay last month’s purchases on your credit cards in full, you probably have overspent.

If you are experiencing stress and an inability to pay back your debt, we recommend contacting us to learn about your options including consumer proposals, credit counselling, budgeting; as well as bankruptcy in Kingston, Ottawa, Brockville, Cornwall, Pembroke, and surrounding areas.

USING ONE CREDIT SOURCE TO PAY OFF ANOTHER

Borrowing from one credit card to pay for the charges accumulated on another is expensive and high risk. Shifting debt does not lower your total debt obligation and instead could make your credit problems worse. Over time, you could end up with significant loan payments and high interest rates that you are unable to manage. With this type of situation, the source of the debt is what needs to be tackled. A Licensed Insolvency Trustee at D. & A. MacLeod has the expertise to assist with these situations and can provide solutions to get you back on track.

PAYDAY LOANS

Payday loans often appear to be easy and convenient to use. Often at times, no credit check is required and all you have to do is to authorize the lender to automatically deduct payments from your bank account. The drawback to this strategy is that payday lenders charge a very high interest rate. The rate may seem manageable at first, but repeatedly turning to payday loans can result in much of your income going to the payday company and little of it going to pay off your debts. A recent article in the Centretown news further discusses this issue. You can also read our in-depth blog all about the Predatory Practices of Payday Loans.

EXPERIENCING CREDIT REFUSAL

Trying to take out a personal loan to manage your debt can be difficult. If you have a poor credit rating already, you will have difficulties getting a new credit card or loan. In these situations, it is better to refrain from requesting another credit card, as too many inquiries may further damage your credit rating. A licensed insolvency trustee at our offices in Brockville, Ottawa, and across Eastern Ontario will assist you in arranging timely payments of your bills to improve your credit rating over time, or in some cases, suggesting a consumer proposal or bankruptcy as a viable financial option.

SPEAK TO A LICENSED INSOLVENCY TRUSTEE AT D. & A. MACLEOD

If you are experiencing financial distress, do not let it take control of your life. Be in control. Professional advice is available. A licensed insolvency trustee at D. & A. MacLeod Company Ltd. can review your situation to assist in determining if it is one that requires credit counselling or budgeting; refinancing secured assets; a consumer proposal and if you credit situation is extreme, starting over by filing a bankruptcy. For over 65 years, we have assisted people in similar situations. Our licensed insolvency trustees can provide you with reliable solutions to relieve your debt, manage your spending habits, and start a new beginning™. Contact a Licensed Insolvency Trustee today in Ottawa, or at one of our convenient locations in Ottawa, Kingston, Pembroke, Brockville, Cornwall and Smiths Falls. Request a free, confidential, consultation online or by calling our head office at 613-236-9111.

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