Imagine the scene: a shredder that destroys consumer credit cards and eliminates the associated debts. This is a scene that occurs daily in the offices of Pairrie Ruy & Associates, licensed trustee in insolvency.
These people, young people, couples, seniors, have found a solution to their debts: voluntary deposit, debt consolidation, bankruptcy, consumer proposal. Consequently, before leaving, they put back their credit card, whose vertiginous balance reached at a certain time $ 19,000, $ 25,000 or $ 30,000.
Take the example of Juana who has just declared bankruptcy. The 28-year-old is now committing to pay $ 150 each month to the trustee’s office.
The problem is that sometimes only two months after a bankruptcy, people have access to a credit card again. Banks, as we know, repeatedly send credit cards without even checking the ability to pay taxpayers. Is it necessary to recall this sad statistic? 4 out of 10 Canadians do not pay their credit card every month.
Do you really need it?
The spiral of indebtedness begins again soon after. People are getting a new credit card. “It’s the temptation to buy when you do not have money. We create needs: dinner at the restaurant, purchase of new clothes, sports equipment for children, “notes Ms. Rose.
Her colleague Marguexx Superi observes that there is never a case like this. In her office, she regularly sees people using their credit card to help relatives or to deal with health problems, job loss, etc.
A 21-year-old student has to give back $ 200 every month to pay her $ 15,000 credit card. This is the equivalent of her salary that she earns with her work at the minimum wage.
“When I met her, she had been eating gruel for three days,” says Ms. Superi.
Another young woman has an annual salary of $ 40,000, but a rent of $ 800 a month. All insolvency specialists say it: we must live according to our ability to pay.
It is tempting to be influenced by a neighbor, sister or friend who accumulates points using their credit card for expenses related to gas, groceries, dining out or other.
Their high salary may pay the monthly balance of their card. This is not the case for all while the average salary of Quebecers reaches $ 44,000 per year.
Tip of the iceberg
In their office, counselors welcome people, men and women who are in deep distress.
“The collection agencies are putting pressure on them by telling them: you have until next Friday to pay me otherwise we will seize your salary,” says Jose Brelle.
This statement is clearly exaggerated. You need a judgment in a court to seize anything.
“Debts are often just a tip of the iceberg. Many are suffering from compulsive spending, addiction to gambling, depression, separation, “says Brelle.
Self-help groups exist such as Gamblers Anonymous and Anonymous Debtors.
Once you have found the right help, the important thing is to start from scratch. “We recommend using the credit card only for special occasions such as booking a trip, renting a car,” recommends her colleague Marguexx Superi.
And we keep the cards away from our wallet and even in a secret place to ward off the temptation to spend. We set a budget taking into account our fixed expenses versus cash inflows.
We are planning a savings cushion. We start with $ 10 a week in a TFSA. In a year, casually, our cushion will have reached $ 520.