Building a Better Life by Design Not Chance
At 44, Russell (not his real name) began to come to terms with his compulsive gambling, and joined a 12-step program. As he advanced in recovery, he started to take responsibility for his failed first marriage, his first Bankruptcy, and his outstanding Gambling debt.
Russell’s first marriage had ended when he was 36, with a Bankruptcy brought on by his gambling. He not only damaged his credit history, lost his house, and lost his wife – his wife was forced to declare Bankruptcy due to his compulsive gambling which impacted their joint debts.
There were no children in his first marriage, and during their divorce, his wife did not ask for alimony – so, once the Bankruptcy was completed, Russell, who was a mid-level manager, was free to spend his sizable net income as he chose.
In the intervening years, Russell’s income fluctuated between $3,000 and $4,000 net per month but he had nothing to show for it. He lived in a not-so-nice rented apartment, drove an old car, and had ever-increasing debts. All of his disposable income (and more) was spent on gambling.
Russell’s decision to break free and address his gambling problem was a difficult one, and one he took seriously.
As he moved further into recovery, Russell realized that paying off his outstanding debts was an essential step in his recovery. Knowing that he could never reasonably repay his unsecured debts on his own, Russell decided to seek the services of a Bankruptcy Trustee.
During his initial appointment at David Sklar & Associates, Russell and his Estate Administrator, Cori Naron reviewed his financial situation:
|7 Credit Cards Debt||$15,900|
|Unsecured Bank Loan||$1,400|
|3 ‘Other’ Unsecured Loans||$15,200|
|Total Unsecured Debt||$33,700|
He had $2,500 left owing on his 8-year-old car and his average income was $2,900 net per month.
Cori presented various options to Russell.
If he decided to file for a second Bankruptcy, he would be looking at a Bankruptcy period of 36 months and his monthly payments during the Bankruptcy would be at least $515 per month. Once his Bankruptcy was complete, his credit history would show his second Bankruptcy for 14 years.
If he decided to file a Consumer Proposal (and it was accepted by his creditors), he would be looking at a 60 month period with monthly payments of approximately $240. Once his Consumer Proposal was successfully completed, his credit history would show a Consumer Proposal for six to seven years.
Without the structure of a Bankruptcy or a Consumer Proposal, Russell felt he would not be able to repay his unsecured debts. After carefully reviewing all of his options, he chose to file a Consumer Proposal. David Sklar & Associates filed the Proposal and presented it to his creditors. His Proposal was accepted by his creditors, and Russell began fulfilling the terms, which included monthly payments of $240 and completion of mandatory financial counselling sessions.
At the time of this writing, Russell has three years left to go on his Proposal, continues to work on his recovery, and is building a brighter future for himself.
To protect our client’s privacy, details of this case have been altered.