Navigating Debt Relief & Financial Recovery After a Health Crisis
Life is unpredictable, and sometimes we’re faced with challenges that affect not just our health, but also our financial stability. One of these challenges can be a health crisis that forces us to stop working, leading to a pile of unpaid bills and growing debt. Finding debt relief after a health crisis becomes an urgent task in such scenarios.
This article will guide you on how you can find financial relief and rebuild your life after a health crisis, leveraging different debt relief options such as consumer proposals and bankruptcy.
Understanding the Financial Impact of a Health Crisis
A health crisis can strike anyone at any time, drastically changing the course of your life. Not only does it affect your physical and mental health, but it also strikes a blow to your financial stability.
In the aftermath of a health crisis, you might find yourself unable to work, which can significantly reduce your income. As bills continue to pile up, you may find yourself struggling to keep up with the payments, sinking deeper into debt.
The Story of Geoff and Carrie
To better understand the financial impact of a health crisis, let’s look at the story of Geoff and Carrie (names changed to protect privacy). Both in their late 50s, Geoff and Carrie were working full-time, renting their home, and raising three children.
They had always had debts, but they were punctual in their bill payments. However, a terrible car accident that left Geoff with serious head injuries changed everything. He couldn’t return to work, and their finances took a hit.
The Struggle to Stay Afloat
Geoff and Carrie did their best to continue paying their bills and managing the additional expenses related to Geoff ‘s health condition. They relied heavily on their credit cards and lines of credit as the insurance money was delayed and was less than half of Geoff ‘s regular earnings.
Eight months after the accident, Geoff was still unable to return to work. The couple was using credit as an emergency fund, shuffling around their monthly debt payments, and hoping things would eventually get better.
Finding Debt Relief After a Health Crisis
When you’re faced with a health crisis and your debts continue to pile up, it’s essential to seek help and explore your debt relief options.
Geoff and Carrie contacted Bankruptcy Canada, a company specializing in debt relief. Bankruptcy Canada’s Licensed Insolvency Trustee assessed their situation and provided them with options to ease their financial burden.
The Breakdown of Debt
By the time Geoff and Carrie sought help, they had accumulated over $100,000 in unsecured debt. This included credit card debt and multiple lines of credit. Their credit score was deteriorating, and the financial stress was taking a toll on their marriage.
Geoff ‘s Bankruptcy
After careful consideration, Geoff decided to declare bankruptcy. Considering his very low income and no assets, this was the best solution for him. Bankruptcy allowed him to have monthly payments of around $200, significantly less than his previous monthly debt payments of $1500.
Carrie’s Consumer Proposal
Unlike Geoff , Carrie was still earning, which meant that bankruptcy was not the best option for her. Instead, she decided to go for a consumer proposal. The trustee negotiated her $65,000 worth of unsecured debt down to $30,000, a reduction of more than 50%.
This meant that Carrie would have to make monthly payments of $500 over five years, saving her over $600 a month in debt repayment.
The Road to Financial Recovery
After Geoff ‘s bankruptcy and Carrie’s consumer proposal were underway, they received guidance to ensure they lived within their means and had a cushion in their budget.
By April, Geoff was discharged from his bankruptcy, and he was debt-free. He planned to use his extra $200 every month to help Carrie make extra payments on her consumer proposal to pay it off early.
Debt Relief Programs: A Safety Net
Debt relief programs like bankruptcy and consumer proposals can be a safety net for people experiencing financial difficulties following a health crisis. While these programs do affect your credit rating in the short to mid-term, they provide immediate financial relief and free up significant resources for future planning.
Conclusion
Life can throw unexpected challenges our way, but it’s essential to remember that there’s always help available. If you’re struggling with finding debt relief after a health crisis, reach out to a professional for guidance. It’s never too late to take control of your finances and start on the path to recovery.
Remember, every journey starts with a single step, and the first step towards financial recovery is seeking help. Don’t hesitate to take that step when you need it.
