Stelco, one of Hamilton's largest employers, announced on January 29, 2004 that it is seeking protection from its creditors. A copy of the Stelco press release is available on the Stelco web site.
Unfortunately bankruptcy may be a necessary solution when dealing with debt, whether you are a large corporation, or an individual.
Stelco has not gone bankrupt. They have obtained a court order to "hold off" their creditors for a period of time, until they can present a plan to deal with their debts.
Stelco's plan is similar to a plan that an individual person would file, called a consumer proposal.
Seeking bankruptcy protection will cause a great deal of stress for Stelco's employees and suppliers. Our fear is that when the company alludes to their "high cost structure" and "deteriorating cash position" job losses or cut backs in hours may result.
Unlike a generation ago, it is almost unheard of for someone to work for the same company for their entire working life. We changes jobs many times during our working lives, perhaps because we want to change, and perhaps because our employer goes out of business.
At Hoyes, Michalos & Associates Inc.,
we recommend that everyone create a plan to deal with job loss.
This does not mean you should be a pessimist and expect to lose
your job. However, you should devise a plan now to deal with job
loss if it does occur. Here are some simple strategies that will help you deal with job loss in case it happen:.
Make a personal budget. To determine how long you can survive a job loss, start personal budget planning. What does it cost you to live each month? Your personal budget will show you your living costs, so you can follow the next steps
below.
Reduce your
expenses. The most common financial mistake made by Canadians
today is to spend more than they earn. Start now by reducing your
expenses so that you can save money each month.
Save Money.
If you reduce your expenses, you may be able to start saving money.
Build a "Nest
Egg". Ask yourself this simple question: "Would I
rather lose my job when I have $5,000 cash in the bank, or when
I have $5,000 in debts?" The answer is simple. If you do lose
your job, it is easy to survive if you have cash in the bank, so
start today to build a "nest egg" to see you through the
tough times ahead. Again, your budget will tell
you what it costs to live each month. If your living expenses are
$1,000 each month, and you will be out of work for three months,
you need a $3,000 nest egg.
Reduce your
debt. If you are currently carrying a lot of debt, you can't
start saving a nest egg. You must first reduce your debt. Based
on your by budget, determine how much you
can pay towards your debts each month, and then after your minimum
payments are made, pay your highest interest rate debts first.
Get help. If have more debt than you can afford to pay, don't wait until you
lose your job. GET HELP NOW! Call one of our bankruptcy offices in Ontario and arrange for a free initial consultation or, to get answers to your bankruptcy questions, contact a bankruptcy trustee by e-mail today. We will review your situation and determine
which strategy will work best to deal with your debts.
Worries about job loss are a significant
cause of stress for Canadians today. By making a plan to deal with job loss ahead, you can
minimize the stress level, and plan for tomorrow.