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Ever heard of the saying, the only things in life that are certain are death and taxes? Well, we can add a new one to the list– Debt.  Whether you are young or retired, single or married, you are never exempt from the threat of debt.

It could stem from a marriage breakdown, the death of a loved one, or an eviction due to unpaid rent; debt can bubble up faster than one would expect, causing stress and possible financial chaos.

As a responsible family lawyer, whatever your client require your expertise for, your goal is to ensure your clients are protected from any emotional and/or financial jeopardy that such life turns can cause.

Your responsibilities may involve:

  • Division of marital assets including their debt;
  • Facilitating finances for a recently deceased;
  • Small Claims cases involving landlords suing tenants for missed rent payments;
  • Aiding a family who take charge of an elderly family members care; or
  • Facilitate a child’s custody case.

All of the above can have a crippling financial impact in a person or a family’s life; such that it can easily grow to a devastating mountain of debt. Unsettled debt is best dealt with promptly and cleanly, to avoid legal settlement proceedings being dragged out. Here are some questions you can pose to your clients who have unsettled debt:

  • Are they from credit cards, lines of credit or loans?
  • Is each spouse or family member involved aware of all debts?
  • Are the debts shared, or is one or more in one person’s name only?
  • How much is the outstanding balance of each debt?
  • What is the interest rate attached to each debt?
  • Is there a threat of bankruptcy?

It is highly recommended to order a credit report from one of Canada’s trusted Credit Bureaus, like Equifax or TransUnion. In the case of a couple requesting a divorce, a joint credit report should be ordered. Only then can an accurate account of all of debts be attained.

It is then your client’s responsibility to go through all of their credit cards to see what cards are active, in which name they are in, and how much debt is owed on each. Once this has been determined, you should strongly advise your clients to STOP making purchases on these cards. Continued purchasing on cards these will only complicate matters in the settlement process. A good idea is to advise your clients to apply for an entirely new credit card in their own individual name from a different credit provider.

Now comes the fun part. Who is going to pay the debt? This will depend on the situation for which you are facilitating. Whether your client is going through a divorce or has recently experienced a death in the family, they will need to determine who will pay the unsettled debt.

A professional credit counselor or debt relief firm will assist your clients in resolving unsettled debt in a swift and manageable process. A reputable firm will offer your client’s a free financial assessment, in order to tailor a repayment plan that suits their financial needs.

The goal of all debt relief firms should be to ensure your client has the money to secure:

  • The roof over their head;
  • Food for the family;
  • Legal fees;
  • Rent; and of course
  • Unsettled debt!

At any given time, a person’s world can be turned upside that leads to a path of disastrous debt. By focusing on resolving financial stress promptly, a person has the ability to move forward in a positive direction..

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