Financial Recovery Articles
Facing a Job Loss, Part 3 - When to get professional help
André Bolduc
BDO Dunwoody Limited
February 2005, Cornwall-Seaway News
From Crisis to Control
With the Cornwall area hit by several plant closures, including the loss of 390 jobs at Domtar and another 175 at Gildan Activewear, many people are experiencing the financial and emotional stress of an unexpected job loss.
The good news, though, is that you can change your situation from crisis to control. In articles 1 and 2 of this series, we addressed how to create a budget that will help you to manage on a reduced income and how to transform a negative experience into a positive plan for achieving your goals.
If, however, those goals are unattainable because you don’t have enough money to sustain your family through a period of unemployment, then it’s time to seek professional help. The sooner you do so, the faster you can regain control of your finances. COMPAS Inc., which conducted a survey of 400 people last fall for BDO Dunwoody Limited, found that more than 30% of respondents waited for six months or longer after they recognized they had a debt problem, before they contacted BDO for help.*
Unfortunately, the longer people wait to seek help, the fewer options they may have. With the rate of personal bankruptcies in the Cornwall area twice as high as the Ontario average,** you don’t want to be part of this statistic. If you seek professional help soon enough, you’ll have more choices – and better results.
People are often fearful of contacting a “Trustee in Bankruptcy” because the title is intimidating. The fact is that Trustees can help you resolve financial challenges using a variety of solutions in addition to bankruptcy including budgeting, credit counselling and consumer proposals. Bankruptcy is usually the last option recommended. Since initial consultations are free and there is no obligation to follow the recommendations, no one has anything to lose by seeking professional advice.
A trustee will review your budget, assets and debts and recommend what he or she believes to be the best course of action for your particular situation. For example, you may simply need to fine-tune your budget by reducing debt or selling assets. The trustee may refer you to other professionals who can assist you with such matters.
If this won’t resolve your financial challenges, the next recommendation might be a consumer proposal. This is a formal debt repayment plan which is presented to your creditors with the help of a trustee. Once the proposal is accepted by your creditors, you make payments to the trustee, who in turn makes payments to your creditors according to the terms of the proposal.
If your financial situation can’t be resolved with a proposal, then bankruptcy may be the only option. But it’s important to keep in mind that the bankruptcy process is intended, not to punish, but to provide a fresh start.
In a bankruptcy, the trustee is an intermediary with responsibilities to both you and your creditors. He or she informs you of the effects of bankruptcy and prepares the necessary documents. First-time bankrupts are usually discharged from bankruptcy after nine months and released from their debts.
Regardless of the financial restructuring process you go through, you need to focus on your future. By taking responsibility for your situation early, creating a plan for the future and starting on a new path, you can transform a job crisis into an opportunity to move forward with confidence and financial security.
* BDO Dunwoody COMPAS Customer Satisfaction Research, September 2004
** Office of the Superintendent of Bankruptcy Canada, “Consumer Bankruptcy Rates by Major Urban Centre,” (24 April 2004)
André Bolduc, CA•CIRP, trustee in bankruptcy, is a vice-president of BDO Dunwoody Limited (www.debtworries.ca), which has been helping individuals and businesses solve their debt problems for over 40 years. You can reach him at (800) 754-1579 or cornwall.insolvency@bdo.ca.
This material is general in nature and should not be relied upon to replace the requirement for specific professional advice.
