Unexpected Debt – and What to do About It

What Can I Do If I Was Hit With An Unexpected Debt?

For just about anybody, debts can easily creep up over time.

We all have to deal with things like car repairs, home maintenance, broken appliances, and illnesses, but it’s rare we plan for them in advance.

Paying for these things using credit can all add up.

Even if you are very careful not to get into debt by budgeting for these things, what happens when you’re hit with debts that you were not expecting?

If you’re not expecting a bill, you can hardly budget for it.

There are a few that could catch you off guard and leave you panicking about your finances.

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There are numerous types of unexpected debts a person can be hit with in Canada, including:


  • CRA Debt – this can be given to you at any time without warning. Your accountant may have made mistakes, or used deductions that you were not entitled to, for example. You may also get CRA debt you were not expecting if you’re new to being self employed and unsure of payment requirements. CRA can add on interest and penalties daily for non payment and can even seize your bank accounts and your wages almost overnight.


  • ICBC Debt – this is essentially government debt. There’s no expiry, and no statute of limitations applies to settle the balance. They are also not able to negotiate with you to reduce the amounts owed. If you do not pay this debt, ICBC may not allow you to renew your driver’s license or insurance until you have paid.


  • Life Event Debt – when you don’t have an emergency fund, you can leave yourself vulnerable to expensive life events. This may include the breakdown of a relationship or even a new baby. A relationship break down can result in legal proceedings, set up costs for moving and re-establishing yourself, and more.


You can be careful with your finances and believe you’re doing everything right and still get hit with unexpected debt.

Life often throws curveballs at us, but it’s how we handle them that counts.

Being prepared for anything and knowing how to proceed is key to reducing your anxiety surrounding the debt.

What To Do About Unexpected Debt

Unexpected debt is extremely stressful, and the longer you stay paralysed without taking action, the longer you carry it with you.

It can feel like you’re carrying the debt with you everywhere you go, thinking about it constantly.

This makes it akin to a lead weight strapped to your ankle.

Acting quickly will give you peace of mind and ensure you don’t have your bank accounts seized.

Contact The Creditor

The first thing you can do is contact the relevant party to see if you can set up a payment plan if you can’t afford to pay the debt in full right away.

This may not always be possible, but it’ll allow you to spread the cost of the debt if you are eligible.

Creditors can be understanding, but you’ll need to be honest about your financial situation and what you can afford.

Borrow From A Trusted Family Member

You always have the option of asking a trusted family member to help you with the debt, but you should carefully lay out all of the terms beforehand.

When will they expect the money back?

Can you repay them in installments?

Outlining all of the terms in advance will help you to avoid a breakdown in communication and leave both parties happy.

This being said, if you are already in financial trouble, borrowing money from a loved one is not the best way forward.

Paying your family member back may prove difficult, and this could lead to a breakdown of the relationship.

Contact A Debt Relief Service

Contacting a debt relief service when faced with unexpected debts could allow you to live totally debt free.

Doing this could give you the fresh financial start you’ve been dreaming of.

To find out if this is the right option for you and your situation, give us a call and we will be happy to provide you with no obligation advice.

Information on Consumer Proposals

Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?

Canadian Bankruptcies

How to File for Bankruptcy
What is Bankruptcy?
Bankruptcy FAQs
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?

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