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Is Covid Debt Piling Up in the Maritimes?

At first glance, it may seem like we fared pretty well during COVID in the Maritimes. Insolvencies took a drastic nose-dive during the mid to later part of 2020 as many Maritimers hunkered down in their homes to weather the viral storm. 

It seems like many of us in the Maritimes know how to survive on less, and this showed during periods of unemployment and reduced hours. The government assistance did help in some cases, as did family and friends. We are a community that comes together in times of need, and we saw many examples of that over the past 12 months. 

But was this just the calm before the storm?

Was there a debt storm brewing behind the scenes? 

It appears that may have been the case. Many are coming up for air now and finding that the debt that was there pre-covid, although temporarily “parked”, needs attention now. And let’s face it, things may have improved somewhat, but this COVID existence is far from over and is continuing to cause discomfort and uncertainty. 

I am only one of many insolvency practitioners out there, talking to individuals every day about their experiences.  I expect that the following stories and comments will be similar no matter which practitioner you speak to. 

A couple of stories you may relate to

Take Sharon, for example (name changed to protect privacy, of course), things were ok before COVID. She was your average working mom, paying bills, and relying on credit to bridge the gap in what her income did not cover.  Expenses such as unexpected medical costs, a trip to the vet, car repairs and a leaky water tank, to name a few. 

In a pre-covid world, she would have most likely paid off the credit she used. But unfortunately her reduced hours, caused by lockdowns and a requirement to home-school her daughter, did the damage. It wasn’t right away, however.  

She qualified for CERB and was able to hang on with optimism that the world would return to normal soon and she would catch up. But the world, sadly, has not yet returned to normal, and catching up is looking like a longer-term goal. At least for now.

So, she had to explore additional options and decided that a settlement to her creditors would give her some breathing room until life gets back to so-called ‘normal’. 

Then there’s John.  Another typical story these days. He is self-employed and deals with clients across North America. Travel is his mainstay. Well, we all know what happened in that environment. Online meetings just didn’t cut it in his line of business, and he lost more than 50% of his revenue. 

He was able to cut costs due to the lack of travel, but not enough. And he did have government monies to help during the tough times, but again, not enough. And he was optimistic, that once he was able to get back in touch with his clients, that he could dig himself out of the income loss, but that hasn’t happened yet. 

So, he had to explore other options. The bank wasn’t able to assist with a refinance and a friend suggested he contact us. We are exploring options that will enable him to keep his business operational and his creditors from taking legal action against him, while he figures out his plan.

It’s time to take action

The common thread between these two stories is that there was a period of non-action.But that is coming to an end, and it is time to take action. The type of action depends on your particular circumstances, but, as a starting point, seek the advice of a professional. 

At the very least, talk to your bank, if you haven’t already, to see what they can do for you. Regardless of the answer, look at all of your options so that you are in a position to make the decision that is best for you.   

Why a Licensed Insolvency Professional?

I may be a bit biased with this next statement, but we, as Licensed Insolvency Practitioners, really are the best go-to professionals to do this. Not only are we experts in Insolvency Law and know the ins and outs of Consumer Proposals and Bankruptcies better than any other professional, but we have your best interest at heart. If we think you can budget yourself out the situation you are in, or finance yourself out of it, we will point you in that direction.

As a matter of fact, just this week, I had a follow-up meeting with Jenn (not real name). She needed someone to give her some tools that she could use to get herself out of debt.  She and I chatted and after I had a good understanding of her situation, I sent her to our website to download some worksheets with instructions on what she could do to start that process.  

Today we reviewed her progress and I am happy to say that she is on track and, I have no doubt, will be able to get herself out of a difficult and stressful situation. 

Stay in the game

In summary, we’ve all had a rough year and want this to end. But folding may not be your best option. Ask for some new cards (options/resources/advice) and get back into the game.

You can’t win if you don’t play.  Unsure of the rules? Or what your next step is? Reach out. We can help. 

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Mary-Ann Marriott

Mary Ann has been working in the insolvency industry for 25 years. In 2005 Mary Ann received her Chartered Insolvency & Restructuring Professional (CIRP) designation and attained her license as a Licensed Insolvency Trustee (LIT) in 2014. She is passionate about helping others become financially literate, and has been a guest speaker to various groups and organizations on the topic of Money Management. Mary-Ann also hosts a weekly radio show, as a volunteer in her community. Her tagline is “Helping you have happier, healthier finances”.