Breaking Out of the Paycheck-to-Paycheck Trap
According to a study done by the Canadian Payroll Association in the Fall of 2012:
- 52% of respondents from Ontario indicated that they were living paycheque to paycheque.
We often see the stress and damage that living with this kind of balancing act can cause. Not only can finances be ruined, huge debts incurred, and family security put at risk – relationships can be destroyed.
If you are caught in the paycheque-to-paycheck trap – it can seem like there is no way out. Especially if you are carrying an excessive debt load.
Some people are able to break out of this dangerous pattern by budgeting, cutting expenses, taking a second job, and not using credit.
But for many, even with a job, their debt is too much to deal with. They are simply unable to repay all their debt and get out of the paycheck-to-paycheque trap.
The Canadian government recognizes that there are times when ‘honest but unfortunate’ people (debtors) are simply too far in debt to ever reasonably get out of debt. To help people caught in this situation, they have set up the bankruptcy and consumer proposal processes.
Most people are familiar with bankruptcy – but many have not heard of consumer proposals.
In Ontario, only licensed trustees in bankruptcy, like David Sklar & Associates, are allowed to file and administer consumer proposals.
Simply put, a consumer proposal enables qualified people, using the services of a Licensed Insolvency Trustee, to set up a legally-binding arrangement with their unsecured creditors to pay off a portion of their debt in exchange for release from their unsecured debts. Note: there are some unsecured debts that cannot be included in a proposal.
These agreements, once accepted by the creditors, usually result in manageable monthly payments spread out over a period of up to 5 years. In exchange, the assets of the person filing are protected from the unsecured creditors, and the unsecured creditors agree to stop all collections efforts and to stop interest charges.
To help the debtor avoid future problems with debt – part of the proposal requires them to attend credit counselling, where they are taught the skills to build a more financially secure future for themselves and their family.
Getting Help in the Toronto Area
If you live in the Toronto area and cannot find a way out of your excessive debt load – you are welcome to call us at 416-498-9200 for a free consultation. During your consultation, our caring, licensed professionals will review your finances and discuss all of your options for getting out of debt and getting on with your life.