When Michael and Sharon stepped into Bankruptcy Canada’s Oshawa office a little over two years ago, they looked and sounded defeated.
Stress had obviously taken a physical toll on both of them, and as they discussed their financial situation, they seemed desperate.
This isn’t the first time a family has come into one of our offices feeling this way, but thankfully, Michael and Sharon are in a much different place today.
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Maxed out credit cards
When Michael and Sharon were first married, they dove right in to keeping up with the Joneses.
They got a mortgage on a house, leased a car that was slightly too expensive, and started putting things on credit cards.
While they both had regular 8-to-5 jobs, they soon realized that they were putting more on their credit card than they could actually pay down, especially after they had a child that required expensive daycare.
The small family maxed out several credit cards but eventually were no longer able to get new credit cards as their credit slowly started to dip.
With a handful of maxed-out credit cards, a mortgage payment, and a lease payment on a vehicle, Sharon and Michael knew they needed help to get out of debt.
Once their finances had been discussed, the Oshawa couple determined that a bankruptcy would be a smarter choice for their unique financial situation instead of debt consolidation or a consumer proposal.
Sharon and Michael had very little equity in their home, so our Licensed Insolvency Trustee determined that selling the house at fair market value would leave very little, if any, equity to go towards the bankruptcy.
Downsizing did not make sense since the mortgage payment was within their means to pay, as long as they could get rid of their credit card debt and leased car payment.
Combined, the two incomes were over the surplus income limit, so their bankruptcy took place over 21 months as the two paid approximately $300 each month towards their debt, while the rest of it was erased.
The harassing calls were stopped, and the couple has since learned to live within their means, even purchasing an inexpensive used car outright.
Debt relief on the horizon
By the time the family of three had gone through their bankruptcy, they were able to eliminate over $40,000 worth of debt, and were able to keep their home.
When our financial expert met with Sharon and Mike a couple of months ago, what stood out to him was not actually how far they had come financially, though it was significant, but how they looked and sounded.
There was an ease and calmness that was apparent between the two, and they seemed like entirely different people that had come in two years prior.
Does this story sound similar to your own life?
If so, don’t be afraid to reach out to any of our locations to set up a no-obligation discussion with one of our debt experts.
We can help you deal with your maxed-out credit cards, and explore the options you may have to reduce your debt, stop the interest from building, and pay down the principal of your credit cards.
Contact Bankruptcy Canada today.
*Names have been changed to protect confidentiality
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