As we head into the second month of the COVID-19 pandemic, the ongoing health crisis has increasingly become a financial crisis for many households. Now is an important time; Canadians who are struggling with affordability and debt need relief. Here are some resources and debt solutions that can help.
According to a recent Angus Reid online survey, about 25 percent of Canadians admit they are in bad or terrible shape financially due to the COVID-19 crisis. That’s a significant number of people across Canada who are finding it increasingly difficult to manage their household finances, and who need relief from their debt. In addition, 45 per cent of households report they have lost work. This is especially important because many were already living paycheque-to-paycheque prior to this pandemic, with very little wiggle room for a health and financial crisis.
Fortunately, the response from businesses, financial institutions and governments at all levels has been quick. The CRA has extended the tax filing date, many lenders have allowed clients to defer mortgage payments and the federal government has introduced the Canada Emergency Response Benefit. You can learn more about the assistance available from the federal government, financial institutions and others in our previous blog.
However, beyond your mortgage and your tax obligations, what happens when you cannot pay your bills or manage your growing debt?
If you are finding it difficult right now to make ends meet, or you are worried about future financial challenges, there are solutions and debt relief options available to you.
Many utility companies are allowing customers to defer payments if they have been affected by coronavirus or have experienced job loss. In some cases, companies are allowing customers to defer payment without penalty, committing to not taking action against customers who are unable to pay their bills.
Utility companies (like this one) are also exploring and extending emergency assistance programs to customers. Contact your utility company to determine what they need from you to help you avoid taking on more debt.
The Federal Government has suspended payments and interest of the federal portion of student loans until September 30th, 2020. That applies to both the federal and provincial portions of student loans issued in Newfoundland, New Brunswick, Ontario, Saskatchewan and British Columbia.
PEI, Nova Scotia and Alberta have announced the same measures for the provincial portion of student loans. Manitoba does not charge interest on student loans, and state that they are exploring option to support students struggling to make payments at this time. If your student loan is through Manitoba, contact them directly to discuss any options available to you.
If the balances on your credit cards or lines of credit are growing quicker than you anticipated and you think you need debt help, there are solutions. A Licensed Insolvency Trustee (LIT) can review your situation and explain available debt repayment or debt relief options.
In some cases, an LIT will offer advice and identify strategies that will help you manage bills and living costs — which, in turn can help you keep up with debt payments and avoid additional debt moving forward.
For unmanageable or overwhelming debt, an LIT can negotiate with your creditors to reduce the amount you owe. This debt relief option, called a consumer proposal, lets you repay a portion of your debt, while allowing you to keep your assets. Taking proactive steps now to find a debt solution may help you avoid filing for bankruptcy.
As we enter into another month of the COVID-19 crisis, families across Canada are fighting to stay both physically and financially healthy. As we all try to weather this crisis, there is no shame in seeking help. If you’re missing bill payments and falling behind on your debt obligations, the sooner you reach out for help the better. There are strategies, resources and solutions that can help you manage your debt now and in the months to come.
Are bills and increasing debt worrying you? Learn how you can take action anywhere in Canada to reduce the financial burden by joining the conversation with us on Twitter and Facebook. #DebtRelief #Canada #EconomicResponse
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