gslade@medicinehatnews.com@MHNGillianSlade
Part 2 of 2…
A bankruptcy trustee says the sooner you seek advice on managing a tough financial situation the more options you have.
Randy Kobbert, licensed insolvency trustee with Meyers Norris Penny, says anyone who has seen their employment circumstances or income change, needs to face the new reality. Total up your monthly income and your necessary monthly expenses.
“Trim unnecessary expenses and find additional income,” said Kobbert.
If the cost of owning a home is more than you can afford at the moment, look at renting out a portion of the house or even the whole property while you live in cheaper and smaller rental accommodation, he says.
Another option may be to sell the property. It is important to talk to a real estate agent to determine whether selling is the right option or whether there is a glut in the market making it impractical to sell.
You can also talk to your mortgage lender.
“Some people, on a case by cases basis, are going to get further extensions (mortgage deferrals) beyond the six months,” said Kobbert.
If none of these options work, you can’t sell, you can’t rent it out and you can’t find another source of income, you have to look at legal options.
“Legal options to protect you from the fallout or repercussions of a foreclosure,” said Kobbert.
A licensed insolvency trustee can discuss insolvency options, and that consultation is provided at no charge.
“You have more options available to you the sooner you get the facts,” said Kobbert.
While creditors were laying low during the COVID-19 lockdown when the courts were not open to handle bankruptcies, that is no longer the case.
“The courts are now reopened … on a virtual basis but they are now starting to see applications for judgments and claims.”
It began with property foreclosures but now includes unsecured debt.
“They are looking at applications for statements of claim now for lines of credit, (credit) cards and so on,” said Kobbert.
According to recent numbers, 2.6 million Canadians have used at least one deferral for one payment over the last six-months for mortgages and consumer debt, said Kobbert.
Banks are now in the position where they have to be accountable to their shareholders, said Kobbert. There is also the expectation that people have been putting money aside and have been spending less money because of the restrictions during the pandemic.
“It’s been widely predicted by many economists that we could be in for a rough ride in the final three months of this year,” said Kobbert.
