October 12, 2022
Unexpected life events like job loss, illness, or a death in the family can quickly lead to debt. Learn how to manage unexpected debt with advice from BDO Licensed Insolvency Trustees.
Debt and major life events often go hand in hand. Unexpectedly significant changes—such as a job loss, medical emergency, divorce, or the arrival of a new family member—can leave you unprepared and reliant on credit to make ends meet. To explore strategies for managing these financial challenges, we spoke to BDO Licensed Insolvency Trustees Nancy Snedden and Jayson Stoppel.
They shared their insights on how to plan for the unpredictable and minimize the impact on your finances. Here’s how to navigate some of life’s most challenging events and avoid falling into debt.
One common concern among new parents is the lack of financial education they received growing up and how this might affect their ability to teach their children. Nancy Snedden, a BDO Licensed Insolvency Trustee, frequently encounters this issue.
“A common thread through 80–90% of the people that come in is a thing that they wish they knew or a thing that they wish they had been taught about as a child growing up. And I think some of them also worry that they don’t know how to teach their own kids,” she says.
A memorable case for Nancy involved a young couple who had just welcomed their second child. The financial strain of consecutive maternity leaves left them in debt. They shared with Nancy how their parents never discussed money matters or taught them how to budget, use credit wisely, or manage finances effectively. While this lack of financial literacy wasn’t the root cause of their difficulties, they felt that having those skills might have helped them plan better.
Nancy emphasizes the importance of budgeting and tracking expenses. She recalls advising the couple to “really sit down and look at your budget, and not plan a budget, but track your expenses for a number of months. And based on that, then you’re forming your own budget.”
The mother admitted that this advice sounded simple but was something she had never been taught. Nancy reassured her, explaining that financial planning often seems straightforward when explained by a professional.
Nancy was able to help the couple find relief from their debt through a consumer proposal, which reduces your overall debt load and the amount you have to pay back.
Nancy also addresses the shame and embarrassment that people often feel about financial difficulties. She compares financial literacy to other life skills, pointing out that just as we seek professional help for car repairs, it’s perfectly normal to seek help for financial issues. “There’s a lot of shame and embarrassment about getting yourself in a situation because you feel like something that you should have been able to control or that you should have been able to help yourself get out of, and it’s just not the case,” Nancy explains.
“Debt is often beyond a person’s control and there should not be shamed attached to it,” she says.
Dealing with the death of a loved one is always challenging, and it can become even more complicated when the deceased leaves behind unresolved debts. BDO Licensed Insolvency Trustee Jayson Stoppel told us one such story of a family navigating the financial aftermath of a loved one’s passing.
In one of his cases, Jayson encountered a situation where a small business owner had passed away. They had multiple outstanding tax obligations, including a GST account and HST account, along with various other business-related tax filings that they were significantly in debt on at the time of their passing.
When his daughter was the executor of her fathers will and she soon realized the extent of her father’s unpaid taxes and felt overwhelmed by her responsibilities.
“She was completely at a loss as to how to handle this, because her role as an executor was to carry out the last wishes of her deceased father,” Jayson explains. The daughter was in a difficult position where she couldn’t honor her father’s wishes to distribute property to family and friends due to the outstanding obligations to the Canada Revenue Agency.
Jayson says he and his team “were able to sort of put ourselves in between her, and the creditors.”
They were able to step in and mediate between the daughter, in her role as executor, and the creditors. He says his team assisted in selling the assets that needed to be sold in order to fix the tax issues.
“At the end, we were able to close out the estate of the deceased individual to the benefit of Canada Revenue Agency, but also to the peace of mind and the benefit of his daughter in this case, because it was quite a stressful time,” Jayson says.
All these stories highlight the importance of seeking professional help when dealing with debt after a life event. Licensed Insolvency Trustees, like Nancy Snedden and Jayson Stoppel, are equipped to provide guidance and support tailored to your specific situation.
They’re professionals understand that every situation is unique and offer compassionate, non-judgmental advice to help you move forward. Our Licensed Insolvency Trustees can help you explore all available options, ensuring you make the decision that’s right for you.
October 12, 2022
Unexpected life events like job loss, illness, or a death in the family can quickly lead to debt. Learn how to manage unexpected debt with advice from BDO Licensed Insolvency Trustees.
