Newspaper article The Canadian Press

Christmas Debt Hangover Cure Starts with Retracing Holiday Transactions

Newspaper article The Canadian Press

Christmas Debt Hangover Cure Starts with Retracing Holiday Transactions

Article excerpt

Credit counsellors offer debt hangover cure

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CALGARY - Like the morning after too many eggnogs the night before, many Canadian families are waking up this week to the pounding headache of a Christmas debt hangover.

But credit counsellors say there's a cure for those who have the courage to face their painful situation.

Mike, a 38-year-old from Vancouver, remembers his desperation when he finally realized he needed help about five years ago.

"I had no other choice. I had like $1 left on my credit card," he said.

"I had the ability to make money but no matter how much I made, I was paying it out in debt payments every month. Something had to change."

Mike, who asked his last name be withheld, owned a failing metal fabrication business in Vancouver.

The trouble was he didn't realize how badly it was failing -- there wasn't enough money coming in to cover the payments on his $20,000 business loan, resulting in him running up about $15,000 in debt on his credit cards.

He described his financial plan at the time as "delusional."

For instance, although he knew he had to pay taxes, he didn't because he couldn't afford it. Similarly, when he calculated his income, he would look only at the revenue side and not at his crippling expenses.

Today, he credits two forces for helping him get out of the quagmire -- his now-wife, who let him move in with her to control living costs, and the Credit Counselling Society, which helped him consolidate his debt and pay it down with affordable $400 monthly payments.

Scott Hannah, founder and president of the society, says most of its clients just need a little advice, but the society will also negotiate with creditors and collect payments on their behalf from the client in about one in five cases.

"Christmas itself is a very stressful time," he said. "When you add on financial difficulties, it just magnifies the amount of stress."

The society is one of several not-for-profit members of Credit Counselling Canada, organizations financed mainly by lending institutions that offer free debt-counselling services. It has offices in the western provinces, the North and in Ontario.

Another is Money Mentors, which has offices throughout Alberta. …

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