Financial trouble will turn from bad to worse when appropriate action is not taken at the first sign of financial difficulty. It is common for many to act only when collection agents are harassing them or creditors seize their wages or bank accounts.
Some of the signs of having financial problems are failure to pay on time your: utilities, loans, credit cards; mortgage, rent, your loan application are turned down by banks, borrowing money from friends and relatives to pay your basic needs and making cash advances from one credit card to pay the other.
If you are not expecting extra income or funds from other sources within a short period of time, say within six months, to cover your negative cash flow, you have to act promptly in solving your financial predicament before it becomes out of your control.
After banks turn down your loan applications, some ways of solving your financial worries include: negotiating with your creditors to suspend or reduce your payments, consumer proposal and bankruptcy as last resort.
Inaction would only aggravate your situation. A good example was a man who received demand letters from his creditors which he simply ignored. When he came to me his salary was already seized by a creditor and executions were registered against his name. As a result, he was forced to file for bankruptcy as his financial situation was no longer within his control.
His house was sold by the bank under power of sale at below market value. Should he acted much earlier, he could have saved his house or at least should have sold it at fair market value and could have received some money from the equity of his house.
When asked why he did not act earlier to prevent the seizure of his assets, he simply replied:” I always procrastinate thinking that it will take a long time for creditors to take hold of my assets.”
To protect your assets from unnecessary seizure by your creditors, it is imperative to fix up your finances at the first sign of financial trouble, before creditors start knocking at your door to impound your assets.
Adam Aspilla is a Senior Financial Counselor of the Debt Clinic of Canada Inc. and the author of the book, You Can Negotiate All Your Debts. He also writes a biweekly column, “What Matters In Life” in “Taliba Newspaper. For free initial, professional and confidential consultation, please call 905-306-7572.