Why Even High Income Canadians Go Bankrupt or Make a Consumer Proposal
The misconception that only low to middle-income earners face financial difficulties has been debunked. In reality, high income earners can also find themselves in financial trouble. This could be due to a lack of savings, lavish lifestyles, or unexpected economic setbacks such as job loss or business failure.
High-Income Earners and Financial Struggles
High-income earners, like everyone else, can fall into the trap of living from one paycheque to the next without setting aside any savings. This lack of financial cushioning can lead to severe problems when financial setbacks occur.
Quote: “Financial difficulties are not limited to low or middle-income earners. Many high-income earners also find themselves in financial trouble due to various reasons.”
Can High-Income Earners File for Bankruptcy or Consumer Proposal?
Absolutely, high-income individuals can file for bankruptcy or consumer proposals if they find themselves in financial distress. There are numerous financial solutions available to them, including bankruptcy, consumer proposals, and tax solutions.
Consumer Proposals
A consumer proposal is a viable option if the unsecured debts are less than $250,000. This proposal is a legal agreement set up by a Licensed Insolvency Trustee. The debtor agrees to pay a percentage of what is owed to the creditors, or extend the time they have to pay off the debts, or both.
Bankruptcy
Bankruptcy is another solution that high-income earners can consider. It allows individuals struggling with debt to discharge most of their outstanding debts. However, it’s important to note that bankruptcy might impact their professional licenses and/or practices.
Tailored Approaches for High-Income Earners
Given the unique circumstances of high-income earners, they often require specifically tailored approaches. This is especially true if their professional licenses and/or practices might be at risk if they file for bankruptcy.
Seeking Professional Help
High-income earners should not let embarrassment or pride prevent them from seeking professional help as soon as they realize they are in financial trouble.
Quote: “The very best advice we can give a high-income wage earner who finds him/herself in financial trouble is this: don’t let embarrassment stop you from seeking professional help as soon as possible.”
Role of a Trustee
A skilled trustee can review your financial situation and help you choose the best option based on your personal circumstances. They can provide advice on how to navigate bankruptcy, consumer proposals, and other financial solutions.
Importance of Timely Action
The sooner you act, the more options you may find are available to you. Delaying could limit your financial solutions and make the situation worse.
Free Consultations
Many professional financial advisors and trustees offer free, no-obligation, confidential consultations. This is an excellent opportunity to discuss your financial situation and explore possible solutions.
Conclusion
In summary, high-income earners can find themselves in financial distress, and when this happens, they have several options, including filing for bankruptcy or a consumer proposal. It’s crucial to seek professional help early to explore all the available options and find the best solution for your unique situation.
