We are pleased to release our latest YouTube animated short film focused on highlighting the 5 most common mistakes people make when they find themselves in debt.
Often we see individuals who end up either not helping their situation, or even making it worse by taking one or more of the following actions:
- Hiding from your problem – Ignoring your creditors can lead to them taking extraordinary steps to collect, including wage and/or asset seizures. Staying in communication is often a good way to avoid the shock and surprise of a wage seizure.
- Paying off family debt first – Be very careful about who you pay (especially family) if you find yourself in a situation where not all debts will be paid in full. Paying back family debt in priority to your other debts can be viewed as preferential treatment and can cause you problems in the future.
- Getting a co-signor – By co-signing a debt, a person is agreeing to take 100% responsibility for the amounts outstanding (not 50/50 as is commonly believed). Getting a co-signor will often increase your borrowing limit, but it can also give your creditors additional pockets to collect from in the event you are unable to pay the debt in full.
- Paying for debt advice – It should never cost you money to figure out your financial options. If you’re asked to pay money for debt advice, speak to a Trustee first. We will meet you at no cost or obligation and can often give you all the information you need to move forward in a free initial meeting.
- Cashing in RRSPs – The Government of Canada has specifically exempted these assets from bankruptcy. Do not cash in RRSPs to pay debts unless you fully understand the rules. Don’t compromise your retirement to deal with a short term debt problem.