Debt and Divorce: James' Story
James is a 44-year-old man living in NB facing both debt and divorce together. He recently divorced and on top of the emotional turmoil that comes with a separation, he finds that every month his finances are causing him enormous stress.
After his divorce, he moved to a furnished apartment and he now finds himself responsible for the majority of the debts accumulated during the relationship. He also is now responsible for an entire household’s worth of expenses on his sole income, whereas he used to split the expenses with his ex-wife. James makes a good income working his full-time job, but since his child support is taken from his pay automatically, his pay cheques are not leaving him with enough disposable income to meet his obligations every month.
As a result of all this, James finds that he is barely able to make the minimum credit card payments and his loan payments are now bouncing and causing overdraft fees in his bank account. Debt and divorce are making James feel defeated. He decides to find help in reviewing his options because he finds that he is overwhelmed with the amount of information that is out there.
James had spoken to a few friends regarding his financial difficulties and had heard some concerning rumors about bankruptcy and insolvency. His chief concerns were that his credit will be ruined forever by an insolvency, and that he would lose his vehicle. Nevertheless, James came into our office looking to explore his options with a free, no obligation meeting with one of our professionals.
James brought with him into his first meeting, a list of his debts, assets, and income amounts. After reviewing his financial situation, it was determined that James owed approximately $35,000 in credit card debt, $3000 in high interest loans, and a $700 cell phone bill. For assets, he had a life insurance term that was through his employer, as well as a vehicle he used to get to work, worth approximately $3700.
After reviewing his options with a Trustee, James discovered that if he were to file a bankruptcy or consumer proposal , he would have two financial literacy counseling meetings with qualified professionals that will help put him on the right path so that he may rebuild his credit. He also discovered that the assets he had were in fact exempt under federal or provincial legislation, which meant that he would be able to keep his vehicle and his life insurance even if he filed for bankruptcy.
After his free consultation and some time to reflect on his debt and divorce, James decided that he would file an assignment in Bankruptcy. His payments would be determined by his unique financial situation and were very manageable, especially in comparison to his minimum payments that he had been struggling to make on his debts. Although his credit would be impacted by the bankruptcy, he was confident in his ability to rebuild once given the skills at his counseling sessions.
By removing the burden of his debts, James now can contribute to his savings every month and spend more quality time with his children instead of stressing about his finances or working overtime. He says that a weight was lifted from his shoulders, and that he was able to breathe and have the chance to start his life fresh.
If a debt and divorce situation sounds familiar to you, and the stress of your finances are impacting your life, you are not alone. A Licensed Insolvency Trustee like Allan Marshall and Associates may be able to help. Your free, no obligation consultation can be booked online or call 1-888-371-8900 to speak to one of our LIT’s today.