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The unpaid bills are piling up. The inbox is full of late payment reminders, and you have stopped opening the mail. You don’t answer your phone anymore for fear of who is calling. Call block only blocks some of the calls. The mortgage and the car loan are paid up to date, but Visa, MasterCard, Capital One, Payday Loan, and Student loans are all behind in payments. Not to mention the debt you haven’t repaid to your parents. Collectors are calling, and you are wondering how you can get out from under it? If you or anyone you know has ever experienced the mind-numbing fear associated with not being able to pay your creditors, read on. This post is for you.

(Some History.. I know, before you were born..but trust me, it’s interesting)

Will that be Cash or Chargex?

In 1968, the introduction of bank charge cards to Canada forever changed the lives of a country filled with money savers. No other financial product has altered the spending habits of Canadians more than Chargex. Our financial lives were changed forever by putting $300.00 of instant credit into millions of consumers’ hands.

While Canadians were reluctant to accept this new payment method for goods, by 1973, the Bank of Montreal introduced their Master Charge Card to attract some of this promising new market. The marketing departments at the different Banks were working overtime, promoting their credit cards as a status symbol. It was becoming evident to the financial institutions they may have found the golden goose. But it was not until 1977 when Chargex was renamed VISA and Master Charge, changed to MASTERCARD, that our love affair with plastic would really begin.

In 1975, the national consumer debt load was 16 billion dollars. In 1990 our debt had grown to 100 billion dollars. Personal debt is now at its highest point in the country’s history. In 2020 our debt had exploded to $2 trillion, (yes trillion) not including mortgages. Also, in 2020 there were 75.8 million Visas and MasterCard’s in circulation. Of that number, 34.8 million accounts, or 46 percent, carried a balance. Merchants no longer have to ask, ” Will that be Cash or Chargex” for many Canadians because our way of life is to use credit to extend our monthly income. It has never ceased to amaze me that this multi-trillion-dollar industry has been created out of nothing. As a Credit Counsellor, I wonder how long can this go on?

Lack of money can cause extreme stress, job loss, divorce, physical and emotional abuse, and even death. Many years ago, one of my colleagues, Peter, was in severe financial difficulty, he told no one. Believing there was no solution to his financial situation, he died by suicide. It was then that I began to comprehend how much guilt and shame people in financial difficulties can experience. I decided I would do whatever it takes to make a difference in someone’s financial life. The way I do that, is to start by cleaning up my client’s debt mess, using various methods of debt reduction. Once we have the debt under control, the real work starts. We visit the past, so my clients can identify what lead to the debt trauma in order to let go of it and forgive themselves for being in debt in the first place. WOW. This is so simple and so powerful forgiveness equals peace. once my clients have peace they are open to learning. I want my clients to understand the wise uses of debt and credit to realize their own power. My hope is they will begin to understand and accept that their credit rating is not a reflection of who they are; it is merely a credit industry tool. A credit rating is not a measure of personal worth. It does not announce to the world who you are as a person; it tells a story, of financially where you have been but not why you were there. There is so much more to credit than just having a good credit rating.

So what can you do if you find you have become an Overcommitted Debtor?

The first step is to become financially literate is to empower yourself with knowledge about the credit industry. Learn and understand what are your rights as a debtor? What are your responsibilities, do you know? Each week, we will examine options for you to have the power to make an informed decision if you find yourself faced with debt you cannot pay.

  1. Try to negotiate new repayment terms with your creditors –
  2. Speak to your bank about a consolidation loan –
  3. Speak to a qualified Credit Counsellor – how can they help
  4. File a consumer proposal –
  5. Make an assignment in bankruptcy –

If you become over-indebted, empower yourself to find out your options and do some research before things get out of hand. You may want to contact your Creditors to explain what has happened and ask what adjustments can be made.

If your debts are credit cards, try getting a consolidation loan from your financial institution; the interest rates are usually lower; therefore, your monthly payments would be reduced.

You may wish to speak to a Credit Counsellor about possible solutions to your financial situation. If so, be sure to verify the qualifications of the Counsellor. Not all Counsellors are created equal. Check out each organization thoroughly before you deal with them; do not be afraid to ask questions. What makes them qualified to give you financial advice demand to see their certificates and their license.

You may wish to speak to a L.I.T. (Licensed Insolvency Trustee- Bankruptcy Trustee) regarding a Consumer Proposal or an assignment in bankruptcy.

Or you may wish to speak to an Insolvency Lawyer.

Each week I look forward to discussing ways of dealing with credit, your rights as a debtor, and your responsibilities. If you are in debt, we will provide you with all of the solutions to resolve your financial difficulties and move on with your life. There is life after debt.

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