COVID Debt Hangover?

By August 15, 2020 Blog
covid debt hangover

With the COVID-19 pandemic, we are currently facing one of the most challenging periods of our lifetimes. Many people in British Columbia and across the country have been facing significant financial challenges. Although both the federal and provincial governments have provided some financial assistance programs and other relief measures, these will come to an end shortly, resulting in even more people finding themselves in financial distress.

Many British Columbians have been relying on the Canadian Emergency Response Benefit (“CERB”) to help them stay afloat these past months. Currently, the program is set to end October 3, 2020. After the CERB runs out, employees who qualify for Employment Insurance can switch to that program or will need to return to work or look for new employment, as the case may be.

Many employers have been relying on the Canada Emergency Wage Subsidy (“CEWS”) to allow their businesses to continue operations and keep their employees paid. This program is set to end at the end of 2020. Many businesses that were previously facing financial challenges may struggle come the new year. How this will impact their ability to continue operations and keep their employees on the payroll remains to be seen. 

The Government of British Columbia placed a moratorium on rental evictions for non-payment of rent. This moratorium is coming to an end on September 1, 2020. Renters must pay their rent in full for September and those who have missed rental payments during the grace period must now enter into an agreement with their landlord to repay the rent arrears owing over the following year. 

In addition, many financial institutions allowed deferrals for mortgage, credit card and other loan payments. Although this deferral allowed many to be able to manage their cash flow in the short term, the interest has continued to accrue, and many will have to restart paying these amounts. 

The above list is not exhaustive of all the financial assistance that has been available, but the message is the same.

Financial assistance and debt deferrals are coming to and end, and people need to evaluate what their financial position will be when it does.

It is a good time to take a look at your own situation and write down the amounts that are owed and when deferral periods are going to end. If you are receiving CERB or other financial assistance, what will your income look like when that comes to an end? 

What’s your plan? 

At D. Thode & Associates Inc., our Licensed Insolvency Trustees take pride in ensuring individuals who seek our advice are informed of all the options available to them in dealing with their debt load. During this pandemic, all meetings are available through videoconference or by telephone in order to ensure the health and safety of both you and our staff. We can help you determine your next steps in dealing with your debt.

Contact us for a FREE “Know Your Alternatives” consultation.