Scary Debt Stories: They Did What?!

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Posted in Bankruptcy Trustee
Posted by J. Douglas Hoyes, CA, CPA, LIT, CIRP, CBV

scary debt stories

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As a trustee in bankruptcy, I meet with people every day who are struggling to pay off their debt. In the finance world, it's not uncommon to hear shocking stories from clients about threatening calls from collection agents or how they got into debt in the first place. On today's show, I'm joined by Hoyes Michalos Licensed Insolvency Trustee, Howard Hayes, collection agent Blair Demarco-Wettlaufer, credit counsellor, Nicole Olsen from Fitness Financial in Windsor and Licensed Insolvency Trustee at Hoyes Michalos, Rebecca Martyn from our Windsor and Leamington offices to hear some of the scary stories that they've heard over the years.

Scary Debt Stories

Each of my guests told me some pretty shocking stories that are unfortunately, all too common. Below are three stories from the episode. Listen to all eight of our guests' stories in the podcast or read them in the full transcript posted below.

Story #1 - I Was Told I Would Lose My Kids If I Filed Bankruptcy

Howard Hayes tells listeners about a single mother who could not afford to repay her debts and decided to file bankruptcy to get a fresh start. After informing a collection agent that she intended to file bankruptcy, they told her that if she did, child services would be notified and take her children away.

The Moral of this Story: This is absolutely not true. As trustees, we do not report your bankruptcy or consumer proposal with child services and you will not lose your children because you have debt. In this case, the collection agent was willing to say anything to prevent this single mother from filing and to collect on the debt.

Learn more about who will actually know you filed personal bankruptcy.

Story #3 - My Best Friend Took Out Debt In My Name

Credit Counsellor Nicole Olsen describes one scary story involving two best friends, credit card debt and the sharing of too much information. Jeremy (not his real name), tried to help his best friend who had fallen on hard times. He offered to lend him some money, but instead of cash, gave him access to his bank card and PIN. Rather than taking out a couple of hundred dollars to service his debts, Jeremy's friend registered his online banking and opened additional overdraft bank accounts in Jeremy's name, leaving him $4000 in debt.

The Moral of this Story: Don't share your personal information with anyone (even a best friend). Rather than giving his friend access to his entire account, Jeremy should have taken out the cash so that only that amount could be withdrawn and budgeted for.

Story #6 - Can I Go To Jail For Having Debt?

Licensed Insolvency Trustee, Rebecca Martyn explains a scary story that unfortunately, is not uncommon. One of her clients was receiving collection calls and one day, a collection agent decided to call her 70 year old mom in an attempt to get payment for the debt. The agent told her mom that her daughter would go to jail if the debt was not paid and out of fear, her mother went to the bank, withdrew $5,000, wired it to the credit card company and happily calls her daughter to inform her that she would not be going to jail.

The Moral of this Story: There was no reason for Jane's mother to pay off this debt and you cannot go to jail for having debt. The collection agent in this scenario used a scary threat to collect on the debt and should not have disclosed information about the debt to her mother in the first place.

Listen to the full episode to hear these scary debt stories:

  • A man who owed double his original debt due to compound interest.
  • A single mother who fell behind on payments and received knocks at her door.
  • A bankruptcy trustee who received collection calls meant for someone else.
  • A retired man who took on $70,000 in credit card debt, without his wife knowing.
  • A couple who used payday loans to pay for necessities after losing a job.

Resources Mentioned in the Show:

Share your scary stories about collection calls and debt in the comments below and what you did to deal with the situation.

FULL TRANSCRIPT show #61

scary-debt-stories-transcriptDoug Hoyes: It's Halloween, so today on Debt Free in 30 we're going to spend the show telling scary stories. No, we're not going to talk about ghosts and goblins, but I have invited onto the show a number of guests to tell us scary stories from the world of debt. I've got credit councillors and bankruptcy trustees to tell stories of how collection agents try to scare people into paying money. But I've also got a collection agent on today's show to tell a scary story from his point of view. We've got a scary story about what happens when you give your best friend your bank card and your pin and what happens when you finance a purchase with a very high interest loan.

So, let's get to our first scary story about debt. We're talking about scary stories because today is Halloween and I'm joined now by Howard Hayes who is the trustee with Hoyes Michalos in the Cambridge and Brantford offices. So, Howard give me a story that you heard that you were actually involved in and I want real stories and not something that you just made up. Give me an actual thing, the story that kind of made you say whoa, that's pretty amazing.

Story #1

Howard Hayes: For sure, Doug. There's one that always comes to mind immediately that I can think of in my Cambridge office. She was a single mom, had a couple of kids and her situation it was pretty obvious that a bankruptcy was going to be an ideal solution for her. So, we worked on the application form together, I sent her away. There were a couple of bits of information I needed from her before we could file. Everything was great.

The next day I heard a big commotion going on in my office and I could hear someone outside my door using all kinds of expletives, wanting to demand to see me immediately and so I opened my door and there she was, this lady had come back. And the first thing out of her mouth she said, you never told me if I went bankrupt I was going to lose my kids. Never heard anything like that before in my life, I was pretty shocked when she said that. And obviously she was very distraught and upset.

So, first thing I did was asked her to come into my office and sit down. I tried to calm her down a little bit and absolutely reassured her 100% that filing a bankruptcy doesn’t mean you lose her kids. I asked her where she had got the information from. She said it was a collection agent that told her on the phone that morning that if she filed a bankruptcy to avoid repaying her debts, that she was going to lose her kids. I said that was absolutely ludicrous of course. The collection agent apparently had told her that because she was filing a bankruptcy, that apparently the trustee reports the situation to child services, child services automatically assumes she must be a bad parent because she's not paying her debts, and therefore, she came to the conclusion that that meant that she would lose her kids.

Doug Hoyes: And just so we're clear on this here, have you ever reported anyone to child services?

Howard Hayes: Absolutely not. It's nothing to do with child services.

Doug Hoyes: Yeah, we have no dealings with them, whatsoever. So, it's kind of a ludicrous thing to say.

Howard Hayes: I think the collection agent was just trying to make their commission on collecting the debt and was just trying to think of anything they could to tell the lady to try and discourage her from filing the bankruptcy, which of course it's an absolute shame that they have to resort to that level. It's deplorable behaviour really from the collection agencies. But it just goes to show sometimes they'll tell you anything they can think of telling you to try and persuade you to pay the debt.

Doug Hoyes: And that's why when you hear a story like that, talk to someone who actually knows.

Howard Hayes: Absolutely.

Doug Hoyes: It is ridiculous and we're going to hear other stories like that today. Thanks for telling us that one, Howard.

Howard Hayes: You're welcome, thank you.

Story #2

Doug Hoyes: So, we heard the story from Howard about a collection agent who was lying and basically being quite deceitful to the person who owed the money.

Well, does it ever happen the other way around? Do collection agents hear stories from people they're trying to collect from who aren’t perhaps dealt with the proper way? So, I've asked Blair Demarco-Wettlaufer to come here. He's been on a couple of shows with us already talking about an insider's view from the collection agent. So, Blair thank you for coming back. Have you ever had - well, tell me a scary story from your perspective? What do you hear?

Blair Demarco-Wettlaufer: We hear - unfortunately we hear a lot of hard cases from people and we hear some pretty horrible things. Obviously, we can be calm and reasonable. We're yelled at, we're sworn at, you know, because we're not delivering exactly good news.

Doug Hoyes: You're the bad guy.

Blair Demarco-Wettlaufer: Yeah. I've had people use their eight year olds to screen their phone calls. We've seen some pretty horrible stuff. But here's a good example of a scary story. At one point I called a consumer, they owed $850 for a lease on some furniture. And we called them and said this is a curtsey call and you owe $850 and what would you like to do before we put this on your credit rating? And we got called every name in the book and he hung up on us and he called back to swear at us because he was clearly emotional about it. And, you know, obviously we couldn’t work with him so we put it on his credit bureau.

And two, two and a half years later, wouldn’t you know it, he gives us a call. Hi, it's me, I can't get a car. And we pulled up the account and I got the inbound call, two and a half years later. Oh, Bob, yes you and I talked two and a half years ago, you said some hurtful, rude things. And he said well can I work out a deal? And I went sure, here's your balance with compound interest because the leasing company's been charging you 24% per annum. And it's almost doubled. The fellow owed $1,500. And really the scary part about this is compound interest. Now that's the real scary thing, not me. And he asked can we make a deal? And unfortunately, this leasing company gave us no wiggle room, no co-operation and of course he's calling two and a half years later. The creditor isn’t going to be reasonable or forgive interest when he's told us to go to heck in a hand basket. And we shared all that information with the creditor and the poor fellow had to pay $1,500, two and a half years later.

Doug Hoyes:  And I guess there's a few pieces to that puzzle there. In some cases, the creditor's going to say yeah fine we'll wave the interest, it's been a certain amount of time. You, as the collection agent, are acting on instructions from them.

Blair Demarco-Wettlaufer: Yes.

Doug Hoyes: So, if they say nope, the interest clock keeps ticking then that's the way it is. It's not for you to decide.

Blair Demarco-Wettlaufer: Exactly. And a lot of times if the consumer can get on side with the collector, they can avoid the nastiness. I had one lady, sweet lady, she must have been 80. She came into our office every month in her walker and paid $20 a month because that's what she could afford. And when she finally came in with a box of 20's to pay her $6,000 account saying her older sister had died, we were able to work with the creditor and get $2,000 forgiven. Because she had proven to be reliable and taking an attempt to take care of that. And that isn’t as common in this modern age of databases, but it's still there. So, the really scary thing is interest and consequences.

Doug Hoyes: So, the moral of the story is if you're straight up and you work with someone, then you're likely to have a better outcome than if you swear a lot.

Blair Demarco-Wettlaufer: Keep your cool.

Doug Hoyes: Keep your cool.

Blair Demarco-Wettlaufer: It's just business, keep your cool.

Doug Hoyes: It's a simple as that. Great, thanks for telling us that story, Blair.

Blair Demarco-Wettlaufer: Thank you.

Story #3

Doug Hoyes: So, there you've got two stories about debt collectors, but it's not just collection agents who can tell scary stories. Credit counsellors also have lots of stories to tell. So, let's let my next guest introduce herself.

Nicole Olsen: So, my name's Nicole Olsen and I'm a credit counsellor from Financial Fitness, which is a non-profit credit counselling agency here in Windsor, Ontario as well we have an office in Sarnia-Lambton.

Doug Hoyes: Great, well thanks for being here, Nicole. And when I put out the word for scary Halloween stories, or scary stories that relate to debt, you said hey I got all sorts of them. So, let's see how many we can get to. So, what I'm going to ask you to do, I'd like you to tell me the stories. I'd like you to change the names of people that you're telling us. We don’t want to be disclosing any confidential information or anything here. But give me a story, tell me what you got.

Nicole Olsen: Sure. I guess one of the most interesting stories that I've had recently is of a client named Jeremy, his name's been changed, but he's in his 20's. His best friend was falling on hard times so Jeremy thought well, I'm going to help my friend out and I'll lend him some money. So, instead of giving him the cash, he gave him his bank card and his pin number thinking that his best friend would only have access to the couple of hundred dollars that he had in his bank account.

But lo and behold, a month later, Jeremy finds out that what his best friend actually did was he registered his online banking for him and then started opening up bank accounts in Jeremy's name. And all of these bank accounts he added the overdraft so there were eight accounts that were added in total. And essentially, it put Jeremy in debt over $4,000 to have to pay this back.

Doug Hoyes:   Wow, wow. And so, I'm just trying to figure out how this actually happened. So, he gave him his bank card and said here's the pin. So, I understand that. If I've got your bank card and your pin I can go to the machine and take out money. But then he took it a step further and went online and because I have the card number, he could register for online banking. And apparently you can do that just online I guess. You don’t need to provide any further information is that how it worked?

Nicole Olsen: Well, since they were best friends, he had a lot of information about Jeremy. He knew his birthday; he might have even known his social insurance number. Considering Jeremy was willing to give him his bank card and pin number, he might not have been so protective of all his personal information. So, I think that's where the best friend got most of the information from, was from their relationship.

Doug Hoyes: And because he was registering, he was setting up accounts, which is pretty easy to do online. Would you like to open a new account? Here you go. It wasn’t the same as trying to apply for a car loan or a mortgage or even a credit card where there's a greater standard of review that the bank would do. It's only a small account. And you said how many accounts did he open up?

Nicole Olsen: Between six and eight.

Doug Hoyes:   Wow, so each account maybe only had a $500 overdraft on it. So, the bank doesn’t look too closely at a $500 overdraft. It's not like getting like I say a loan or a credit card or something. But when I add up a bunch of them, it ends up being a big number.

So, based on that story, what is the advice you would give people in that situation? If you could turn back the clock and see Jeremy six months ago, before all this happened, what advice would you be giving him?

Nicole Olsen: First and foremost always never, ever give out any personal information, even friends and family. If they need to borrow money then give them the cash. Don’t give them your pin number, that's something that you really need to keep to yourself. And change it frequently, every six months or so you should be considering changing your pin number so that if it is compromised you're kind of mitigating all these damages.

Doug Hoyes: And so, what do you do? You just go into the bank and change your pin number there? Is that how it works?

Nicole Olsen: Yep, you can go into the bank and they'll put your card into a reader and they'll just ask for your old pin number and then you put in a new pin number and you're good to go.

Doug Hoyes: Great. So, that's good advice, keep your confidential information confidential and if you do want to help somebody out, then fine, give them cash because that way you're only giving them the cash that you can afford to give them. You don’t have to worry about it being any greater of a number than that. So, that's very good advice. So, tell me another story, what other scary stories have you got?

Story #4

Nicole Olsen: Well, I did have a client, Rebecca, she was a single mother of three and she was collecting Ontario Works, so she's on a very limited income. And she needed a new bed for her oldest son 'cause he was outgrowing his. So, she went to one of those easy furniture loan stores and signed up to get the furniture delivered and she got into a payment plan. What she didn’t realize was that the interest rate was around 46% interest, plus administrative fees; her payments were really, really high.

So, she made the first maybe three or four payments and then after a while she just couldn’t keep up with having to buy groceries and pay the rent so she fell behind on the payments. And now what's happening is the store is actually coming to knock on her door, like on her front porch, knocking on her door looking for payment.

Doug Hoyes:  Wow and that's something we used to hear about all the time in the past. And you don’t hear it so much anymore 'cause everything's done by computer, all the lending's done by a computer, the collection person might be miles away from you. But when you're dealing with a local business like that, they've advanced the money so they're more likely to be coming after you and actually knocking on your door. So, what in hindsight would your advice have been to Rebecca? And again, that's not her real name, but what would your advice have been to Rebecca if you could have spoken to her before she had gone out and financed this mattress?

Nicole Olsen: Yeah, if she would have come into our office, we would have sat down and did a budget with her. We would have talked about if she need anything in the future, thinking about those periodic expenses that come up within a year. We all have them, they all happen throughout the year. And what we need to do is start setting up a plan for them. So, kids, if you have children, they have a lot of periodic expenses, shoes, furniture, clothing, setting that money aside on a monthly basis so you can pay cash for those items. 'Cause a lot of times if you pay cash, the item is a lot cheaper than if you were to finance it.

So, what happens is Rebecca's now financing it at almost double or triple the cost of the item, where if she would have saved for maybe six months, $50 over six months she would have had $300 that she could have purchased the bed with.

Doug Hoyes: Yeah because that's what we're talking about. If it's a $300 purchase you're right. I mean $50 a month is more than what she's paying on the loan payment now.

Nicole Olsen: Uh huh.

Doug Hoyes: And so, we understand that okay, I mean I've got kids too, I understand they grow out of things but they probably didn’t grow out of their bed instantly. And even though you wanted that new bed, well they probably could have survived for a few more months in the old one. Or, you know, done a camp out on the floor in their sleeping bag or something, or whatever. They'd probably like that better than sleeping in a bed I guess.

Nicole Olsen: Sometimes they do. [laughter]

Doug Hoyes:  But you're right, you are much better off putting aside the $50 a month, you know, $10, $12, $15 a week for a period of a few months, rather than being faced with having to make a loan payment of $50 or $100 a month for a much longer period of time. So, you really have to be proactive and look at it in advance.

Story #5

So, there was some great stories from Nicole Olsen who is a credit counsellor based in Windsor. I am going back to Windsor again for our next story. I have on the line Rebecca Martyn, who is our Hoyes Michalos trustee covering our Windsor and Leamington offices. Rebecca, how are you doing today?

Rebecca Martyn: I'm good, thanks for having me Doug.

Doug Hoyes:   Thanks for being here. So, we're talking scary stories that have to do with money and debt. Why don’t you start me off, tell me a story.

Rebecca Martyn: Well, the first thing I want to tell you is actually something that happened to me. Now this was several years ago but I was continually getting phone calls with someone with the same last name as mine. I would have collection agency's calling me up, they were threatening me, they were telling me that I was harbouring this person, that I was doing everything I could to avoid it. They were assuming that I was this man. I don’t think I have a masculine voice but they were saying I was really this man in a disguised voice, trying to hide from them.

And at the time I was working for a bankruptcy trustee in London. So, I knew a little about collection agencies and what they were doing. So, eventually I just started marking all these phone calls down and I just basically told them, you call me again I'm going to file a complaint against you. And the next time the collection agency would call me I would tell them I'm filing a complaint and at that point the phone calls just stopped. But it's just to kind of show you that some of these collection agencies, they use means to try to intimidate people. And in the case with me it didn’t work because one, I wasn’t the person they were looking for and two, I didn’t owe the money so I wasn’t going to pay something that wasn’t mine.

Doug Hoyes:  And so, what's the takeaway message there? If people are getting phone calls for a debt that they don't owe, I mean obviously if you're getting a phone call for a debt that you do owe you need to deal with it. That's - the collection agency is just doing their job. But if you suspect that either they've made a mistake or they're doing it deliberately and they're calling you for a debt that you don’t owe, what's your advice?

Rebecca Martyn: Well, my advice is just to realize that people do have rights. If someone is harassing you for a debt that doesn’t belong to you, find out who’s calling, get their name, get their phone number, get their contact information. If they still call you after you tell them it's not your debt, then just file a complaint with the Ministry of Consumer & Commercial Relations against this company.

Story #6

Doug Hoyes: Obviously, the answer is no, don’t go and pay them. Even if it's not your debt, that's obviously counterproductive. So, that's obviously a scary story when people are calling you for debts that don’t even belong to you. So, tell me another story perhaps that had to do with one of the clients or one of the people you've helped over the years.

Rebecca Martyn: Well, this one was actually a client of mine who came to see me awhile ago in the Leamington office. She had lost her job, living on her credit cards. So, it's a story that unfortunately we've heard a lot. Got behind on her credit card bills and they went to collection agencies. A collection agency called up her mother, who was a senior citizen in her 70's, and basically said that your daughter owes this money and she needs to pay it. And let's just call the daughter Jane, that wasn’t her name, but I'm just going to make up a name so I can talk about a person.

So, the collection agency said that if Jane doesn’t pay this money there's going to be a police officer at your door and we're going to take Jane to jail. Mom was really scared. She doesn’t want her daughter going to jail, goes down to the bank, withdraws $5,000, wires it to the credit card company. And she's probably happy, great now I've avoided my daughter going to jail, this is fantastic. I've really helped her out. Jane comes home, sees mom all happy. She says oh you're going to be so happy Jane. You were about to go to jail, but I stopped it. She goes what did you do mom? Well, XYZ collection agency called, they said you had to pay this money or you're going to jail, so I paid it.

Of course Jane is furious 'cause there was no reason for mom to do that. She doesn’t understand why someone at the bank didn’t stop mom from taking out so much money. Nevertheless, the debts now been paid, it's gone and then a few months later Jane couldn’t deal with the rest of her debt, she came to see us and she filed for bankruptcy.

Doug Hoyes: And so, the sad part of this story obviously is that someone who was unsophisticated in the manners of money, the senior citizen mother in this case, kind of got scammed into making this payment that she legally didn’t have to make, obviously it wasn’t her debt and didn’t have to make. So, have you heard this story about, you're going to go to jail if you don’t pay? Have you heard that one before?

Rebecca Martyn: Unfortunately, yeah I have. I have heard the comment that if you don’t pay you're debt you're going to jail. And even when clients come to see us, if a collection agency hasn’t specifically implied that or said that, they just have this fear that if I don’t pay my debt, I'm going to go to jail.

Doug Hoyes: And so, do people go to jail if they don’t pay their debts?

Rebecca Martyn: No, they don’t go to jail. Imagine if people didn’t pay their debt and they go to jail; imagine how overcrowded our jail would be from people who didn’t pay their debt.

Doug Hoyes:  Yeah because pretty much everybody gets behind at some point. And the way I always explain that to people is there are two different kinds of courts in Canada, there's criminal court and civil court. Criminal court is if you commit a crime, you kill somebody, you steal well that's a criminal offence and yes, you can go to jail if you're convicted of a serious criminal offence.

But not paying your debts is a civil offence, that goes to civil court. And the penalty isn’t going to jail, the penalty would be you have your wages garnisheed, you have a lien put on your house, something like that. So, you're not going to jail for not paying your debts. If you kill someone, yes you're going to go to jail but it's not paying your debts isn’t something that lands you in jail. You know, it's a great line for a collection agent to use because it's scary, it just simply isn’t true. So, what's the -

Rebecca Martyn: That's exactly right, it scares people, right?

Doug Hoyes:  Yeah and that's why they're doing it. So, what's the takeaway message here then for dealing with this kind of situation if somebody is faced with it?

Rebecca Martyn: So, I think the takeaway situation is so if you're getting calls for a family member or a friend about the debt, just be polite on the phone say thank you for the information, I'll pass it along. But don’t let the collector intimidate you into thinking that something else is going to happen that can't happen. And it's the same thing that we mentioned with the other scary story is that if you owe the debt, work out a payment plan and then just again, realize that you're right. Like you mentioned, you're not going to go to jail just because you have an outstanding balance on your Visa, that's not what jail is there for.

Doug Hoyes:   And even if you were going to go to jail I don’t think they'd be putting you in jail in ten seconds. It's not like it's going to happen by the end of the day. It's just ridiculous. So, yes if you want to help somebody out, that's great if you have the money to do so, fine, give that money to the person and let them deal with it then. But to be wiring money to somebody you don’t even know, who you just heard of, is obviously the wrong approach.

So, those are two very good and scary stories thanks very much for joining me today, Rebecca. We'll take a quick break and I'll be back with the next segment right here on Debt Free in 30.

Doug Hoyes: It's time for the Let's Get Started segment here on Debt Free in 30. It's our special Halloween edition and I've asked my guests to tell me scary stories about debt. In this segment we've got two scary stories, but the main point of the Let's Get Started segment is to give practical advice as well, so that's what we're going to do.

In the first segment Nicole Olsen, a credit counsellor with Financial Fitness in Windsor told us two stories. One was about Jeremy, a young man who made the mistake of giving his bank card and pin to his best friend with scary results. The other story was about a young woman who got caught up with a very high interest finance loan. Those were both stories about younger people.

So, I asked Nicole if she had any stories she could tell me about seniors. Frequent listeners to this show will know that seniors are the fastest growing segment of the population that we help. With low interest rates and fixed incomes, it's growing ever more common for seniors to get into debt. So, I asked Nicole whether or not she's also seeing a lot of seniors with debt problems and here's what she said.

Story #7

Nicole Olsen: Yeah I think that would be our largest growing demographic right now that we're seeing a lot of seniors coming in with debt. A very familiar story would be the story of Jackie and Frank. They've been retired for quite a few years, about 10 years. And they're in their 70's, they're enjoying their retirement. Both Frank and Jackie worked during their careers so they have good pensions.

But Frank had a really hard time adjusting to his new retirement income 'cause we all know, when you're working, it's maybe weekly or maybe bi-weekly pay, but when you retire it's once a month and that seems to be the hardest one to budget for. So, he's used his credit cards to kind of pay for the extras in his retirement. So, his golfing and all of the outings that he wants to do, going out for lunch with his friends. So, eventually what happened is 'cause he had such a good credit rating throughout his working career, he was able to accumulate over $70,000 worth of credit debt, within a 10 year period of time.

So, they came into see me, we looked at their options. But because Jackie and Frank own their home outright, they really don’t have a lot of options. Because for the most part the creditors are going to say sell your house and pay your debts. So, we had to really work with Jackie and Frank to see what we could do because they really didn’t want to sell their dream home. They had worked their whole lives to pay off this house and now they just had to deal with this debt.

Doug Hoyes: Wow, yeah and you're right, when you're retired, your life changes; getting a paycheque every two weeks is a bit different than getting a pension cheque every month. And if you get a little bit behind when you're working you can work some overtime, maybe pick up a part-time job. Once you're retired, well there's no such thing as overtime. So, you've really got to go into retirement with no debt.

But then I guess the other piece of advice you'd be giving is yeah you've also got to make sure your expenses shrink to whatever your new reduced income is if your pension income is lower than what you were making. That's really the mistake they made I guess.

Nicole Olsen: Uh huh and having to finance all that debt as well was costing a significant amount of money, for the minimum payments that they were having to make. And Jackie didn’t know about Frank's debt. So, that was another part of it that caused a lot of problems. There has to be open lines of communication between two people in a marriage.

Story #8

Doug Hoyes: And that certainly becomes a scary story that's for sure. So, tell me one more. Have you got any stories about a typical couple then? We've looked at the younger people, the older people, have you got any stories about someone right in the middle?

Nicole Olsen: Yeah Mike and Kelly would be our typical clients that we would see that are in their 30's and 40's. Mike would be working full-time and maybe Kelly is staying home with the kids. And Mike, like many Windsorites that we see, is getting laid off and he's jumping from job to job. So, what's happening is they're getting behind. They're getting behind on a lot of their utilities, sometimes they get behind on their property taxes and the city or town is starting to talk about foreclosure on the home. So, they've eaten up all of their savings if they had any. They're behind on all of their bills and now they're having to take out payday loans just to buy groceries and take care of their basic necessities. And so, at this point they're in crisis mode.

Doug Hoyes: And once you're in crisis mode, your options are really limited.

Nicole Olsen: Yeah it can be very challenging to figure out what we can do 'cause we just need to stop the bleeding. So, sometimes it could be looking at re-evaluating the budget, sometimes it could be leaving the home, finding a new rental that's more in their price range. First and foremost, it's finding steady income, which sometimes can be challenging.

Doug Hoyes:  So, I guess your advice in really all these situations we talk about is you've got to be proactive. If you're in an industry or in an economy where you know there's a good chance you're going to be laid off in the future, you've really got to be planning for that. And I guess the best way to do that is to stay out of debt, but also to have some savings as well.

Nicole Olsen: Having savings yep and looking for skills that are transferable. So, really in the employment market you want to be in a career or in a job that you can take those skills and easily convert it to another position so that you're not out of work for a longer period of time. Being really on top of the E.I process, so the unemployment insurance process, making sure that you have your Service Canada account open, so, that every single time that you go on lay off you can reactivate that claim and you're not having to wait so long to receive your first cheque from unemployment.

Doug Hoyes: That's good advice. So, being proactive and making sure that the government programs that are available to you are easily accessible. You don’t want to be having a time lag on that. Well, that's great. Those are some excellent scary stories and some great advice to back them up. Thanks very much, Nicole.

Nicole Olsen: Oh thank you.

Doug Hoyes: That's the Let's Get Started segment here on this special Halloween edition. I'll be right back to wrap it up right here on Debt Free in 30.

Doug Hoyes:  Welcome back, it's time for the 30 second recap of what we discussed today. On today's show we heard many scary stories about debt from trustees, a credit counsellor and even a collection agent. That's the 30 second recap of what we discussed today.

Of course debt doesn’t have to be scary. There are options for eliminating debt, so, for full details please go to our website at hoyes.com, that's ho-y-e-s-dot-com, for all the options to make your debt a lot less scary. Thanks for listening, until next week I'm Doug Hoyes, that was Debt Free in 30.