Credit and Debt Problems Solved

Debbie has decided to share her experiences in an effort to empower others with information and knowledge about how they too can make it through the maze of their own personal finances. She would like others to know if they're experiencing difficulties with their finances as she was, there is hope. Also, there are other  possibilities,  alternatives and ways of finding solutions for various financial difficulties. Debbie thinks if she can straighten out her personal finances with hard work, perseverance and a little luck SO CAN YOU.

Here is Debs story:

In 1978, a single, soon to be new 21 year old mother, lies alone in her hospital room fielding collector calls. Debbie doesn't own much, she owns some clothes and a few personal items. She doesn't have a place to move to when her baby is born, because  she  went into premature labor six months into her pregnancy and had to stay in  the hospital until her baby was born. This event left her totally unprepared for the baby's arrival. Instead of being able to provide a home and preparing for the arrival of the baby she was in the hospital trying to bring a healthy baby into the world.

Fast forward to today, Debbie has successfully been managing her own and other peoples' finances and has evolved into the credit and debt specialist she is today.

How did Debbie get to where she is today?

She would like you to know it didn't happen overnight. It took several years and the journey wasn't easy. Debbie began her journey by leaving the hospital and getting settled in with family until she could find a place of her own. She didn't pay those collectors who were calling her in her hospital room anything for a long while. Instead, she took every cent she had, found a place to live, bought groceries, diapers, formula and started her life.

What debt did Debbie owe?

Debbie owed for everyday items like clothes and record albums and for furniture that she had purchased on credit for her first apartment. While she was working she was able to afford the credit card payments but when she became pregnant and suffered with complications from the pregnancy she wasn't able to work. With minimal income her priorities were to pay rent and buy food. Paying creditors wasn't high on her priority list at the time.

How did Debbie repay this debt?

Eventually, Debbie had the courage to talk about her situation with a trusted and knowledgeable friend who encouraged her to contact a lawyer to try to figure out what she could do about the collectors who were calling her. The lawyer Debbie contacted advised her to contact her creditors and to offer to settle her debts for around seventy to eighty cents on the dollar, which she did, the creditors accepted and she paid off her debts.

Was this the end of Deb's debt problems?

I wish I could say it was the end of her debt problems, but life is never that simple. Debbie decided to return to school to increase her knowledge and skill level so she could get a better job and provide a better life for her family. In order to make these changes and improvements in her life she borrowed money from the Government's of Ontario and Canada by applying for and receiving student loans.

If anyone has ever borrowed money through student loans and not been able to repay them when they were finished school they will have experienced some of the stress that Debbie experienced when she wasn't able to repay her student loans.

What do you need to know about student loans?

When you're offered an amount to sustain you for an entire year without having to work, question yourself as to whether or not this is a good idea. Is it realistic to think that you should incur large amounts of debt without working? In reality if you don't work now while you are going to school, or find ways to keep your costs down,  you sure are going to have to work later to repay all that debt.

Borrowing from student loans:

Debbie was offered an amount to sustain her for an entire year without working so she took it, thinking that if the Student Loans Branch was offering it to her she must need it. What she didn't realize at the time was that she didn't need to borrow the full amount of money that was offered to her. Later, Debbie realized that she would have been much better off if she hadn't borrowed all that was offered. Instead, she needed a plan which should have included learning how to prepare a budget, and how to figure out how much money she was actually going to need to sustain her while she was going to school.

Formulate a Plan:

If Debbie had formulated a plan and created a budget, she would have realized that she really only needed half of what she had borrowed. At the time when she received the student loan money she thought she'd been given a windfall and actually went on a spending spree for things she couldn't otherwise have afforded. Debbie had  forgotten that she had actually borrowed not been given the money. It took several years for her to come to this realization.

Does borrowing to get an education solve all of one's problems?

Like many others, Debbie thought that getting a better education would solve all of her problems. Problem was she didn't realize that very education would create more problems than it solved when she wasn't able to repay the loans because she didn't have a carefully laid out plan. When you can't afford to repay the amounts you borrowed to go to school your life can become very stressful and sometimes it can feel unmanageable.

When you can't repay your student loan:

When Debbie finished school she was not in a position to start repaying her student loans. After a few months the harassing collectors started to call. This was a very stressful time as she tried to figure out what to do. She was applying for interest relief, continuously sending out letters to the student loan department (which were never answered by the government) and she was fielding collector calls daily. At one time, Debbie had three boxes full of letters and correspondence that she had sent to the student loans department trying to deal with her student loans.  

Student loans grow because of interest:

Debbie's student loans were accruing interest at 13.75% and her debt had grown by hundreds of dollars in a short amount of time. After several years of trying to make payment arrangements with collection agents who were continually changing she realized that she needed to handle her student loans differently and started to look for other alternatives.

If possible, borrow from family members: 

Luck rained down upon Debbie when a beloved family member offered to borrow her the funds with a loan at 7% interest instead of the 13.75% interest the collector was charging. Debbie paid off the collection agent and made monthly payments to her family member for the next four years to finally be DEBT FREE.

A few years later, Debbie returned to school but this time there were no more student loans, tuition was paid for through hard work and budgeting.

Where is Debbie today?

Today, Debbie has over 20 years of business and consulting experience, a General Arts and Science diploma, three years of a Financial Accounting education, two years of study in Social Work and has graduated from Library and Information Studies with First Class Standing. For the past 17 years she has owned and continues to operate a small business consulting and individual tax preparation business. Currently, Debbie has obtained the necessary courses to begin qualifying for the Canadian Institute of Financial Planners' certification. 

Debbie has worked as a Credit Counselor for several years and has extensive experience advocating on behalf of individuals, couples and families, preparing financial assessments and assisting in the preparation of plans to manage resources and repay debts. In 2006, Debbie started her own company, A Step Beyond.ca  to assist others who may be puzzled by their finances and who may require assistance getting through the maze of their personal finances to create their individual financial picture.

If you would like assistance to get your debts back on track or if you would like to be proactive in your planning and / or  in the managing of  your resources please contact bdo%23ca|dsquierbernst