There is never a good time to lose a job. As many Canadians are finding out, job loss can happen quickly and without warning. Questions quickly come to mind like how will I be able to make my payments and when will I start to get employment insurance.
In our opinion, the first thing to do regarding your finances after a job loss is to take stock of your situation. Put pen to paper or use a spreadsheet to make a list of your assets and your debts. Also, if you have never made a budget or a list of your income and expenses then make one! This provides some tremendous perspective and provides a framework for making decisions.
Next would be to file your claim for employment insurance in order to get some cash flow going. The sooner you file, the sooner you will start to receive some cash flow. Currently, both the Federal and Provincial government are making major announcements for a variety of different income sources for people who have lost their job.
After that we would recommend that if you need help with your debt, you contact the places that you owe money to and see if they have any arrangements in place to defer or lower the payments, even temporarily, or reduce the amount owed. For example, BC Hydro has a crisis fund that you may be able to access.
Following those steps, if the amount of cash flow you have is not enough to cover your living expenses and make your payments on your debt, there are several options to consider. They range from approaching your bank for a debt consolidation loan to obtaining advice from the reputable credit counsellor. The Federal Government also has debt relief programs available such as a consumer proposal or filing for bankruptcy protection. These must be filed through a Licensed Insolvency Trustee such as our office.
We always recommend that you obtain all of the facts before you make any big decisions, so if you do decide to get someone to help you with your finances, make sure you know what the cost is and how much the payment will be. The best option for your finances is the one that will allow you to live normally and still be able to take care of your debts.
The Federal options of a consumer proposal or bankruptcy protection both have a powerful stay of proceedings which forces creditors such as credit cards, pay day loans, and even income tax debt to stop collecting from you.
While some of these terms may sound intimidating, make an appointment and ask questions! Initial appointments are available via phone. In our experience, once you find out the details, debt stress will leave your life. Why not make that first appointment, it’s free!