By Jensen, Randy on June 1, 2020.
With the Lethbridge economy just starting to wake up from its COVID-19 slumber, licensed insolvency trustee Sandy Lyons with the local office of Grant Thornton Ltd. expects a large spike in those seeking ways to dig themselves out of the financial hole the last few months have wrought.
“The reality of the situation right now is the unemployment rate, and the way the economy was already in Alberta, there are a lot of people trying to figure out where the bottom is,” he says, “and whether or not they have the resources to move forward.
“We are fielding a lot of calls from people who are being proactive, and that’s one of our key messages: to always be proactive about what’s going on in their life. Facing the pandemic, and the fallout of that, along with ongoing impact of the oil patch, and what is now impacting the food supply chain, there are a lot of people trying to figure out exactly where they move forward, and what sort of restart they need.”
Lyons acknowledges the extraordinary nature of the circumstances which have led many individuals into this need for a restart.
“Nobody ever planned for a pandemic in their budget,” he states. “Nobody saw this one coming or the impact it would have. I think the first thing to understand is don’t panic. Reach out and get access to resources. The first thing is to start talking about what’s going on for you, and for some people we are saying understand right now the courts are closed; so your collection actions are never going to be court-driven at this time. That gives people the opportunity to do some work and to talk to your creditors.”
Lyons says while government wage subsidy initiatives like the CERB did help many in the short term, those temporary subsidies have to be reckoned into peoples’ impending financial situations sooner rather than later.
“For those on the CERB right now the reality is, just like EI, the CERB is a taxable amount, and in the short term it might look like they have got more money than they had when they were on what their prior hours were because of the minimal qualifications to get the CERB benefit,” he says. “There are actually some people who are making more money than when they were employed, and for that group the question is will there be a tax liability come home to roost next year. So planning for that challenge of next year becomes important.”
The same goes for bill payment, loan or credit card deferrals.
“In the short term it allows for cashflow to increase, but in the longer term it is still going to be a bill out there,” he explains. “Thankfully there isn’t a penalty associated with that, but there is a payment due date.”
People must begin to consider their options for when the CERB program ends in August and those deferral deadlines loom, particularly if your employment situation remains murky, Lyons states. Those seeking help should call up a credit counsellor, money coach or licensed insolvency trustee as soon as possible, he says.
“Seek help early,” Lyons emphasizes. “All licensed insolvency trustees provide a free initial consultation; so it is always a good thing to talk to people who are providing a free service, and get a sense of where you are at as an individual.
“It’s tough discussions and courageous conversations people need to have about their circumstances so they will sleep at night, and to feel in control,” he adds. “If we can reduce that stress, that is the first step toward figuring out a solution.”
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