How To Know When You Need To File Bankruptcy!
Before you can determine if you have debt problems you need to know the warning signs. Our team have outlined some of the major warning signs they see their clients experiencing prior to bankruptcy.
Read the following and if you find you relate to any of the warning signs do not fear we can guide you through your situation. Or if you find your situation is so bad then we will show you how to declare bankruptcy.
Warning Sign 1: You use your credit card for emergency expenditures because you have no savings.
We believe that people are either born spenders or savers, and it is difficult to change a natural born tendency to spend money. Studies have shown most emergencies in life cost $1,000 on average. The majority of people use a credit card as their fall back emergency plan. This can be dangerous and can snowball into unmanageable debt quickly if left un-checked. If you find yourself without any emergency savings, click here for a solution.
Warning Sign 2 : You continuously incur late fees, service charges, penalties and/or cannot pay all your bills without using a credit card and you don't fully understand how credit charges work.
An inability to pay down the principle amount owing on a debt can leave you feel like you running in a hamster wheel. Without a clear exit strategy many people will go on paying minimum interest payments for months or even years. For example, $10,000 of credit card debt at 15% interest will take just under 28 years to pay off and cost almost $12,000 in interest.
Warning Sign 3: You have stopped paying debt payments all together or you are only paying the minimum amount due.
As soon as you cease to make any payments as they come due, this is an act of bankruptcy and you can be petitioned into bankruptcy or sued. In court a judge can garnish your wages, or put a lien over your assets.
We have recommendations and solutions that will help you make payments to your creditors so that you are acting in good faith and keep your credit bureau as clean as possible. Contact us to learn more.
Warning Sign 4: You owe Canada Revenue Agency income tax, GST, or any other government debts.
Canada Revenue Revenue Agency has special powers under the law to collect debt owed to them. Failing to make payments to government debts have stiff and unpleasant penalties such as garnishing GST refunds that you are owed and charging late penalties and compound interest rates on outstanding debts.
Warning Sign 5: You continually spend over your balance, or you use credit cards as necessity not convenience.
Continually going over your spending limit is a clear indicator that you are not managing your cash flow properly. You are probably incurring loads of penalties and your interest rates may be increased as a result. A credit card should only be used as a means of convenience. It was not designed to be another source of income for you. It is an expense that needs to be paid out of cash.
Warning Sign 6: You are borrowing money to make it from one payday to the next or relying on payday loans.
The majority of Canadians owe $1.63 for every dollar they make. This is an easy place to find yourself. If you have to call friends or family or worse yet get a payday loan to make it to payday, then you are in trouble and need to seek help. One way to get rid of debt is to earn extra income. We have a client who became a fence repair man in victoria bc.
Warning Sign 7: Creditors or Collection Agents are calling you.
Let’s be real, a creditor is not calling cause they like you. They are trying to collect money from you because you failed to meet the terms of your agreement. This is an act of bankruptcy under the Bankruptcy Act, and gives creditors a right to petition you into bankruptcy. A collection agent’s job is to threaten you and scare you into paying them. It is a highly stressful situation. There are options to deal with these people, but when they have you on the phone you are unable to see the forest through the trees.
Warning Sign 8: You are getting sued by creditors or your wages are being garnished.
A creditor is able to sue you in small or Supreme Court and get an order to garnish your wages up to 30% or put a lien on your assets. This is not a good scenario. Your employer is going to find out about your debt problems. You will have 30% less income and no control over your payments.
Many Canadians face some of the above problems with their finances at some point in their lives. Generally most people can solve them. Sometimes you will need professional advice.
Join our community and receive the help you need. We will represent you and not your creditors. We will tailor a debt repayment plan that will work for you. Call today to end the pain and frustration of endless bills, phone calls from creditors and empty bank accounts. Find out how you can start living debt free again!
Call us at 778-405-1102 today.