Kevin has a heavy history of drug and alcohol addiction that has resulted in considerable debt. He wants to take charge of his life and take care of his two children, but there are many obstacles in his way.
Drug and alcohol addiction sent Kevin into a downward spiral. After running into large debts that he couldn’t pay back, his creditors set collection agencies after him.
“The situation had become unbearable, I kept getting letters and calls from agencies. I decided to take control of my life and end my addiction,” he says.
Challenges at the exit of the tunnel
After a long detox, he finally managed to see the light at the end of the tunnel.
But soon he had to face other challenges. Indeed, its years of drift have generated very high levels of debt.
In addition to credit cards and credit lines with various financial institutions that have never been repaid, he also owes amounts to the tax office and has unpaid telecommunications bills. He also owes thousands of dollars to the company that insures his vehicle.
license suspended
The total debt is $52,500. A literally insurmountable amount given his earned income of $2,850, in addition to family allowances for his two children in joint custody totaling $3,800 a month.
“His monthly expenses were $3,575, so it would have been very difficult, if not impossible, to pay it all off,” said Karine Lavigne, Raymond Chabot’s financial recovery and bankruptcy advisor.
Worse, Kevin had his driver’s license suspended by the Société de l’assurance automobile du Québec (SAAQ) at the request of his insurance company because of the more than $7,200 he owes them.
Building a more stable life
Kevin has two options to recover and get out of his bankruptcy situation: bankruptcy or consumer filing.
“He preferred to avoid the first because he had gone broke a few years ago. A second bankruptcy has a significant impact on the credit report, and will do so for a very long time,” says Karine Lavigne.
That’s why he preferred the consumer proposal. This consists in proposing to the creditors an amount lower than the amount due to them, to be paid over a maximum period of 60 months. The negative effects on the Schufa are less harmful than those of bankruptcy.
“In addition, since his income was expected to increase in the coming months due to a job change, in the event of bankruptcy, the monthly payments to be made would have also increased. This is not the case with an application,” adds the restructuring consultant.
The creditors accepted his offer, which also took into account a possible improvement in his income during the repayment period. Kevin is thus freed from all his debts and can build a more stable existence to take care of himself and his children.
His financial situation
Attachment :
- 2014 Hyundai Elantra: No value
Debts:
- Government of Canada: $2579
- Quebec Government: $3785
- Credit Cards: $15,469
- Insurance: $7203
- Telecom: $2239
- Credit Lines: $21,150
TOTAL DEBT: $52,425
Monthly income :
- Salary: $2850
- Provincial Family Allowance: $328
- Federal child support: $625
TOTAL REVENUE: $3803
Monthly expenses:
- $3,575 (includes rent, phone, electricity, gas, groceries, license and registration, car loan, daycare, etc.)
Do you have any information about this story that you would like to share with us?
Do you have a scoop that might be of interest to our readers?
Write to us or call us directly at 1-800-63SCOOP.