A year ago… I picked up and walked away. Not only was I ending a very difficult relationship with divorce, I was almost $100,000 in debt.
A year ago… I moved to a new city, a new apartment, and started a new job. Freakin’ out! ummm yes! But also determined to start over and start to make decisions on my own terms.
As much as my Gemini nature would like me to be flighty and find an island far away, the Earth Goddess in me needed a plan.
- Ask for help
- Safe Place to live
Execute the Plan – Debt
The first step was to ask for help. In Canada, we have several options for dealing with debt, the options that I looked into were:
A consumer proposal is a formal, legally binding process that is administered by a Licensed Insolvency Trustee (LIT). In this process, the LIT will work with you to develop a “proposal”—an offer to pay creditors a percentage of what is owed to them, or extend the time you have to pay off the debts, or both. The term of a consumer proposal cannot exceed five years. Payments are made through the LIT, and the LIT uses that money to pay each of your creditors. Government of Canada
Bankruptcy is a legal process performed by Industry Canada under the Bankruptcy and Insolvency Act, by which you may be discharged from most of your debts. When you file for bankruptcy, the trustee becomes the administrator of your property and assets. One of the roles of the trustee is to wind up the property by selling all the assets and depositing the funds in trust for the creditors in bankruptcy. Canada Revenue Agency
There is obviously a LOT more information that you need to know and review before you decide what the best option for you is. Both options are legally binding and both options wreck havoc on your credit scores. You need talk to a Trustee to know exactly what is the best option for you.
I decided the best option for me was a consumer proposal.
- 5 years
- set payment
- credit score that sucks!
- monthly budgeting
Debt is not taken care of but the resolution is in progress. Next.
Execute the Plan – Income
I had been out in the cabin in the woods, homesteading and building a house…. well there is very little opportunities for additional income. I needed to take massive action to stop the bleeding, literally. The decision at the time was get a job. I love my work and I am very good at it! I started out on the job hunt late spring and was off to the city mid Summer.
Yet again I had to ask for help…. I think this was one of my biggest lessons! I stayed with a gracious friend until I was able to get to arrange an apartment and another friend helped me with my the money I needed.
Regular pay cheques started coming in. Yes! Budgeting was critical at this stage, living expenses, proposal payment and personal loans, crazy really.