How long does a bankruptcy last?

The length of the bankruptcy depends on a few factors – whether you have ‘surplus income’ (see below) and whether you have been bankrupt before. If you have no surplus income and have never been bankrupt before, you will be eligible for an automatic discharge after nine months.

How long does the Consumer Proposal last?

A Consumer Proposal must be completed within 5 years. Usually the payments are monthly (over 60 months), but a Consumer Proposal can also include a lump sum payment, or a combination of the two. If your finances allow, you can pay it off sooner than the agreed-upon payment schedule lays out.

What is a bankruptcy?

A bankruptcy is a legal process to discharge your debts. It is a declaration that your debts are too high for you to repay – and far better than the old concept of a ‘debtor’s prison’! It allows for a fresh start, while giving your creditors some return on what’s owed only if you have a level of income that allows for payments to be made to them, or unprotected assets that can be liquidated (however, most common assets are protected during this process – see below for more information on protected personal assets).

What is a Consumer Proposal?

A Consumer Proposal is an offer to your creditors to pay back a percentage of what you owe them, based on your ability to pay. It is governed by the Bankruptcy and Insolvency Act, administered by a Licensed Insolvency Trustee. Unlike other negotiated debt settlement plans, it is legally binding on all creditors and usually involves paying back less than the total amount of your debt.

What is a Licensed Insolvency Trustee (LIT)?

Licensed Insolvency Trustees (LITs) are federally regulated professionals who provide advice and services to individuals and businesses to reorganize and resolve financial difficulties with expertise and compassion. LITs help individuals or businesses make informed choices to deal with their financial difficulties. They are the only professionals able to administer bankruptcies or proposals.

The Link Between Debt and Mental Health | Campbell Saunders Insolvency Trustee

The Link Between Debt and Mental Health: Finding Financial Freedom and Peace of Mind

Dealing with debt and financial problems can have a profound impact on mental health, just as mental health issues can lead to money troubles. The relationship between these two aspects is complex and interconnected, with each affecting the other in a cycle that can be difficult to break free from. As a Licensed Insolvency Trustee, we understand the importance of addressing both debt and mental health to help our clients achieve financial stability and emotional well-being.

The Vicious Cycle

The connection between debt and mental health manifests in various ways. Struggling with mental health issues such as depression, compulsive spending, or gambling can lead to financial challenges, making it hard to maintain or find stable employment. Conversely, facing financial difficulties can trigger low self-esteem, depression, and even suicidal thoughts. The overwhelming burden of unpaid bills can create a sense of hopelessness, leaving individuals feeling trapped in a never-ending cycle.

Taking the First Step

Acknowledging the link between debt and mental health is the first step towards breaking free from the cycle. It is essential to assess your financial situation honestly and determine if budgeting alone can resolve your debt issues. Seeking support from professionals and loved ones can significantly improve your chances of success.

The Barrier to Mental Health Support

Financial constraints can make it challenging to access proper mental health resources, further exacerbating the situation. The mental energy consumed by just trying to survive can leave individuals feeling unable to navigate the available resources and find the support they need. Breaking this cycle requires not only addressing the debt but also investing in mental health support.

Investing in Your Wellbeing

Understanding that “spending money to make money” also applies to personal well-being is crucial. Allocating funds for counseling sessions, seeking professional help, or attending budgeting sessions can have a positive impact on both financial and mental health. Investing in oneself and seeking appropriate support is a wise step towards breaking free from the debt and mental health cycle.

Coping Strategies

Talking about it: Opening up about your struggles, whether to friends, family, or a counsellor, can alleviate some of the pressure and offer much-needed emotional support.
Making a plan: Developing a comprehensive plan, with the assistance of professionals if needed, can help create a budget, explore additional income opportunities, and establish a debt repayment strategy.
Seeking medical help: Consulting a doctor or mental health professional can lead to valuable resources and referrals, helping address both financial and mental health concerns.
Exploring Debt Settlement: In cases where overwhelming debt is a major contributor to financial difficulties, exploring formal and informal debt settlement options can provide a pathway to financial recovery.

A great way to start your healing journey is to take a step forward. The first step can be reaching out to support or it can be as simple as getting started with a plan. No matter what journey you are on we are here to help. Not ready to book a consultation? You can use our Debt Repayment Calculator to start planning out your steps to become debt-free.

Understanding Your Money Personality

Examining your underlying attitudes towards money is essential in improving your financial habits. Money personalities can influence spending behaviors, and a good financial plan should consider individual money personalities, working with them rather than against them.

The Toll on Mental & Physical Health

Chronic financial stress can negatively affect both the mind and body, straining the cardiovascular system and impacting cognitive function. Research shows that people in situations of financial scarcity tend to hyperfocus on the problem, leading to a temporary but significant drop in cognitive abilities.

In some cases, budgeting alone may not be sufficient to break free from the debt cycle. If debt is overwhelming and persistent, a more formal debt solution, such as a consumer proposal, may be necessary to responsibly address and manage the debt.

Addressing both debt and mental health is crucial to achieving financial freedom and emotional well-being. Understanding the link between these two aspects empowers individuals to take proactive steps towards breaking free from the cycle of debt and improving their mental health. As Licensed Insolvency Trustees, we are here to provide guidance, support, and effective debt solutions tailored to your specific needs, helping you pave the way to a brighter, debt-free future. Remember, you are not alone in this journey, and with the right support, you can overcome financial challenges and achieve a healthier, more prosperous life.