Top 5 Reasons for Financial Difficulty

By October 9, 2020 October 17th, 2020 Blog
financial difficulties

The truth is debt can happen to anyone. Nobody plans to have money troubles and not pay their bills, but life happens!

Consumer Insolvency Numbers

According to the Office of the Superintendent of Bankruptcy (OSB) In 2019, there were 137,178 consumer insolvency filings, of which 40% were bankruptcies and 60% were proposals. That year also had the highest insolvency rate since 2011, with 4.6 out of every thousand adult Canadians filing for insolvency.

Top 5 Reasons for Financial Difficulty 

#1 Loss of Income at 37%.

One day you have a great paying job, and the next thing you know, your company has downsized and you are out of work. During 2020, with the pandemic, it presents more concerns with loss of income as offices/businesses close and people are forced to work from home or are being laid off. In today’s economy, jobs can be difficult to find, so you may find yourself being forced to take a lower paying position in order to make ends meet.

A Licensed Insolvency Trustee can help to assess your financial situation and determine the best course of action for you. 

#2 Medical Reasons at 23%.

What would happen if you were in an accident and were out of work for an extended period of time? Your income could drop by approximately 40 per cent or lower. In addition to a reduction in income, you may end up incurring additional medical expenses such as medication, physiotherapy, and more. It is scary to think about major illnesses, even loss of life, but these things happen. That is why it’s best to prepare yourselves if things do go wrong.

#3 Relationship Breakdown at 15%.

Statistics show that four in 10 marriages in Canada will end in divorce and one of the primary reasons is financial issues. Communication is key, especially around money. When you plan to get married, you need to talk about your financial plan. Develop a realistic budget together and talk about money often, to ensure you’re working toward the same financial goals. Think about talking to a professional to get some help with your debt.

#4 Business Failure at 7%.

Business failures often come with financial hardship, damaged relationships, and a strong challenge to your confidence. When your business is failing, it is time to make some tough decisions. 

Professionals can help with this process and what options are available.

#5 Tax Liabilities at 6%.

When you have a tax liability, you have a legally binding debt to your creditor. If you cannot pay taxes due to money constraints, you might be able to work out a payment arrangement.

There is an alternative to financial insecurity.

The professionals at D. Thode & Associates Inc. will set you at ease, give you some realistic solutions to your financial problems, and help you establish healthy habits that will last a lifetime.