Monthly Archives: May 2012

Supporting Clients and Patients with Divorce Debt

Canada has the 8th highest divorce rate in the world. Human Resources Development Canada has reported that the proportion of marriages expected to end in divorce has fluctuated between 35% and 42% in recent years. In 2008, 40.7% of marriages were expected to end in divorce before the 30th wedding anniversary. In 2008, there were 70,226 divorces in Canada or 2.11 divorces per 1,000 people.

Divorce debt in Canada is also very common. Human Resources Development Canada also reported that in 2008, 115,789 Canadians were unable to repay their debts. Serious financial difficulties brought them to file either a consumer proposal or a bankruptcy. Individuals who were divorced or separated were more likely to file a proposal or bankruptcy.

Why is divorce debt one of the leading causes of bankruptcy in Canada? The answer is fairly simple. First, two income households will often accumulate debt based on their “household ability to pay the debt”. The challenge with this is that debt is accumulated based on two people sharing living expenses and when people separate, living expenses will double because now each party has to pay for rent or a mortgage and living expenses separately. When household debt is present this can make it challenging to pay it.

Second, some marriages will involve one person working and one person raising the family. When divorce occurs, the party who hasn’t worked will likely have little to no income but be faced with the immediate expense of having to hire a lawyer and also live. In many cases this forces the party who has been home raising the family back into the workforce. Individuals who have been out of the workforce for a long time often have to re-enter it in junior or entry level positions.

Third, sometimes one party in a marriage may carry all of the debt in his or her name. Much of the debt may have been used by the other spouse. There is nothing worse than getting a divorce and then finding yourself having to pay your spouse’s debt.

Legal protections may result in the party who has the weaker financial positioning receiving support payments, being awarded the house, having the other party take responsibility for the debt, but this can take years. Also, the legal fees that compound over the course of a divorce may end up being more than the debt that was owed to begin with.

We work with marriage counselors, family therapists and even family lawyers to help their clients come up with post-divorce financial strategies.

If you have a client who needs help or if you would like to host a WeCare day where we can come out and speak with your clients/members about coping with the financial aftermath of a divorce, please email me at kgoldenberg@debtcare.ca, call 416-907-2582 ext 2587 or visit www.debtcareservices.ca.

Gambling Debt in Canada

Gambling debt in Canada is an epidemic not unlike the flu. Addiction is an illness and gambling is something that is highly addictive. Casinos are more accessible than ever in Canada and what can begin as harmless entertainment can quickly turn into a serious life-altering addiction.

Many people realize that they have a problem when gambling habits lead to disruption in major parts of their lives. Financially, problem gambling can lead to a loss of income, potential loss of assets, lowered standard of living, or even a loss of employment. Personally, problem gambling can cause conflict with loved ones, and can lead to alienation from family and friends.

CTV News recently reported on a study from Statistics Canada that showed that wealthier people, on average, spend more money on wagering, but gamblers who have less money spend a larger percentage of their income on gaming activities.

According to the CTV report, Statistics Canada says that 6.3 percent of people are thought to be “at risk gamblers and problem gamblers.” Problem gamblers make up 0.6 percent of the Canadian population which is roughly 180,000 people. The Statistics Canada definition of a problem gambler is someone who has experienced negative consequences of gaming and who gambles more than five times a year.

If you work with people who are problem gamblers resulting in financial ruin, help them stand up against it!

There are many financial programs available that help gamblers who are dealing with a gambling debt in Canada and access to these programs is available through DebtCare.

You can host a WeCare day and make a difference. We will come out to your facility and speak with your clients about the financial consequences associated with gambling and how they can deal with them if they have occurred.

If you would like to host a WeCare day, please contact me by emailing kgoldenberg@debtcare.ca, call me at 416-907-2582 ext 2587 or visit www.debtcareservices.ca.

Another Life Lost to Addiction

The recent loss of Whitney Houston has re-opened the conversation on the ultimate price that one can pay for an addiction, namely, his or her life. Like so many famous celebrities who have passed away in recent years Whiney Houston spent most of her life battling addiction. She was not alone.

For every one celebrity who faces financial ruin or worse, loses her life as a result of addiction, hundreds of thousands of regular folks who don’t make it on to the front page of the newspaper suffer in silence.

Addiction is serious and can not only lead to medical problems and death but can be the cause of financial turmoil that has resulted in some people even ending up homeless. Just as an addict needs professional help to get control of his addiction, he also needs professional help to get control of his debt.

Addiction manifests in many different ways and often does not involve drug use. Gambling and shopping addictions are two common forms of addiction that lead many into personal bankruptcy.

If you treat people who struggle with addiction you are likely also treating people who have financial problems too. DebtCare offers resources and education to people who struggle with debt and we can work with you to educate your clients, members and/or patients about how to deal with their financial challenges. If you would like to learn more, contact me about our WeCare Days at 416-907-2582 ext 2587 or email me at kgoldenberg@debtcare.ca