You have probably heard of the saying, the only things in life that are certain are death and taxes. Well, we can add a new one to the list – Life and Debt.
By Ed Portelli, Debt Relief Professional
You have probably heard of the saying, the only things in life that are certain are death and taxes. Well, we can add a new one to the list – Life and Debt. Whether you are young or retired, single or married, you are never exempt from the threat of debt. It could stem from a marriage breakdown, the death of a loved one, or loss of a job; debt can bubble up faster than one would expect, causing stress and possible financial chaos.
As a responsible family lawyer, whatever your client requires your expertise for; your goal is to ensure your clients are protected from any emotional and/or financial jeopardy that such life turns can cause.
Your role may involve:
• Dividing marital assets, and debt
• Facilitating finances for a recently deceased
• Aiding a family who has taken charge of an elderly family member, or
• Facilitating a child custody/support case.
All of the above can have a crippling financial impact on a client and their family’s life; such that it can easily grow to a devastating mountain of debt.
Life and Debt: What you Need to Ask Your Clients
Unsettled debt is best dealt with promptly and cleanly, to avoid legal settlement proceedings being dragged out. Here are some questions you can pose to your clients who have unsettled debt:
• Are they from credit cards, lines of credit or loans?
• Is each spouse or family member involved aware of all debts?
• Are the debts shared, or is one or more in one person’s name only?
• How much is the outstanding balance of each debt?
• What is the interest rate attached to each debt?
• Is there a threat of bankruptcy?
We highly recommend that your client order a credit report from one of Canada’s trusted Credit Bureaus, like Equifax or TransUnion. In the case of a couple requesting a divorce, a joint credit report should be ordered. Only then can an accurate account of all of debts be attained.
It is your client’s responsibility to go through all of their credit cards to see what cards are active, whose name they are in, and how much debt is owed on each. Once this has been determined, you should strongly advise your clients to STOP making purchases on these cards. Continued purchases on these cards will only complicate matters in the settlement process. A good idea is to advise your clients to apply for an entirely new credit card in their own individual name from a different credit provider.
Role of a Consumer Debt Relief Professional
If there is a significant amount of debt involved in the divorce case, your clients should not borrow any more money, sell their home or assets, consolidate their debt or consider bankruptcy prior to having all options examined and spelled out by a consumer debt relief professional who can ensure that your clients are protected and that they pay back as little as possible to relieve their debt.
Now comes the fun part. Who is going to pay the debt? This will depend on the situation for which you are facilitating. Whether your client is going through a divorce or has recently experienced a death in the family, they will need to determine who will pay the unsettled debt.
A licensed, and reputable, consumer debt relief firm will assist your clients in resolving unsettled debt in a swift and manageable process. They will act as your clients’ representative in negotiating the terms of their debt repayment directly with your clients’ creditors and the creditors’ representatives. They will respond to telephone calls and letters from creditors to reduce the emotional stress on your clients. A reputable firm will offer your client a free financial assessment, in order to tailor a repayment plan that suits your client’s financial needs.
The goal of all debt relief firms should be to ensure your client has the money to:
• Secure a roof over their head
• Provide food for the family
• Ensure legal fees are paid
• Ensure unsettled debt is paid down!
At any given time, a person’s world can be turned upside down which could lead to a path of disastrous debt. By focussing on resolving financial stress promptly, a person has the ability to move forward in a positive direction.
With more than 20 years of experience, Ed Portelli is an expert in the debt relief and debt collection industry in Canada. He is the founder and President of OCCA Consumer Debt Relief, an independent and fully licensed firm in Brampton, Ontario. The firm’s website is www.occa.ca.