
Managing Excessive Debt on a Fixed Income
Freda (not her real name) never imagined that at 68, she would need the services of a Licensed Insolvency Trustee. Having spent her entire life in the Greater Toronto Area, she had built what she thought was a good life with her husband, complete with a lovely home and amazing kids. She had worked in retail for over 30 years and had been eagerly looking forward to retirement.
However, when Freda turned 62, her husband ended their marriage. In the ensuing divorce, Freda learned he had been mismanaging their finances for years. Since Freda had relied on him to handle all the money matters, she had yet to learn how bad things were.


Poor investments in risky stocks, uncollectable loans to ‘friends,’ and mortgage refinancing that had eaten up the equity in their home were just the beginning of the financial nightmare that Freda discovered she was in. At the end of divorce proceedings, Freda was left with a car and $50,000 of debt ($20,000 in credit cards and $30,000 in an unsecured bank loan).
Living in a modest rental and keeping her expenses to a minimum enabled Freda to pay down the hefty $50,000 debt load debt to $25,000. Taking on a part-time retail job after retirement at 65 also allowed her to continue to work on cutting down the debt, but at 67, she was forced to give up that job due to poor health.
Now living on a fixed net pension of $1,650/month, Freda struggled to keep up with the $650 per month she was paying on the outstanding debt. Eventually, she had no choice but to use her credit cards to buy food and medication. By age 68, Freda’s debt had crept back up to $28,000, and she had fallen behind in her credit card payments.
In need of financial relief, she approached her bank to see if she could get a consolidation loan to reduce her monthly payments. Despite her impeccable history of paying her bank loan, and a solid relationship with the bank that went back decades, Freda was not eligible for a consolidation loan because she was a pensioner on a fixed income. Her bank was unwilling to take the risk of loaning money to her.
Freda contacted her credit card companies hoping to strike an agreement to reduce her debts. However, they responded only with denials and demanded that she make lump sum payments.
Defeated, stressed, and feeling she had no choice, Freda came to the offices of David Sklar & Associates to see about filing for Bankruptcy. And that’s when things began to turn around.
How David Sklar & Associates were able to help Freda escape crippling debt payments
During her initial consultation Licensed Insolvency Trustee, Richard Sklar did an in-depth review of her financial situation. Freda was responsible for the following debts:
Credit Cards | $12,500 |
Bank Loan | $15,500 |
Total Unsecured Debts | $28,000 |
Her only asset was a seven-year-old car, which she owned outright.
After reassuring her that it was possible to fix her current debt problems, Richard explained all the possible solutions. One of these was filing a consumer proposal.
Freda had not heard of a consumer proposal before the meeting. But she wanted the opportunity to repay at least a portion of her debt, keep her car, and avoid bankruptcy. Pursuing a consumer proposal would allow her to do all three.

Licensed Insolvency Trustee
Here's how much Freda was able to save by filing a consumer proposal
With guidance from Richard, Freda established a reasonable monthly budget.
She determined she could repay $10,500 of her original $28,000 outstanding debt obligations.
Even before presenting the proposal to her creditors, Freda instantly felt a sense of empowerment and self-confidence, both of which had been missing in her life for many years. With Richard’s help, she realized she had options to deal with her debt.
She presented her proposal to her creditors, offering to make payments of $175 per month over 60 months.
Her creditors gladly accepted the offer after learning they would likely receive nothing if Freda filed for bankruptcy. As a result, the consumer proposal was a win-win for everyone involved.
In total, Freda was able to reduce her existing debt by over 62%, leaving her with monthly payments she could easily cover.
As part of her Consumer Proposal, Freda attended two financial consulting sessions, where she learned valuable money management skills. After years of relying on her husband to take care of the finances, followed by years of hanging on by sheer willpower, Freda was glad to finally come to the point where she had the knowledge and independence to take control of her own life.
To protect our client’s privacy, aspects of this case study have been altered.
Photo by Marcus Aurelius from Pexels

Find out how much you can save with our Consumer Proposal Debt Calculator
Use the slider below to tell us how much you owe and we will show you how much you can save!
*This calculator simply provides an estimate of the total savings you could receive filing a consumer proposal. Actual results may vary as each financial situation is unique. Your actual payments will be based on your income, assets, and debts.
Do Not Include Mortgage or Car Loan Debt.
With a consumer proposal at 0% interest, you will only have to pay back:
$3,480/$58 per month
*This calculator is for demonstration purposes only. Your results may vary based on your unique financial situation.
David Sklar & Associates is here to support your financial recovery
Learn how we can help you find debt relief with a consumer proposal or personal bankruptcy. Our passionate and experienced team at David Sklar and Associates has helped thousands of individuals break free from crippling debt payments. Our experts can answer any questions about your debts and recommend a solution based on your unique needs and goals.
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