How to Manage Debt During a Health Crisis

Posted on 12 June 2020

In recent months, Canadians have been facing health crises in unprecedented numbers, on top of the other pandemic currently affecting our nation: the debt crisis.

Facing a health crisis is difficult. Managing the growing debts from expensive medical costs doesn’t make it any easier. Despite the universal healthcare system in Canada being generous, the cost of medicine is not always covered (especially for serious illnesses, like cancer). Some cancer medications can cost upwards of $8,000 per month.

Naturally, when someone becomes seriously ill, his/her ability to pay bills and manage debt is limited while in recovery. If they are not able to go to work and earn an income, this can make money management more complicated than usual – figuring out which expenses to cover, how to pay credit card debts, and (most importantly) determining which financial decisions will support a return to full health ASAP.

Not an easy feat, given that financial stress impacts our health negatively in a variety of ways ranging from heart disease to depression. Thus, financial stress can prolong both the healing process and one’s return to the work force. This keeps sick people in a vicious cycle of debt and illness for long periods of time.

Ask for Help to Pay Bills and Manage Expenses

Money management is especially important during times of illness make it financially and physically challenging to pay bills.Complex internal feelings, such as misplaced guilt or shame, can lead people to take on the task of conquering both debt and illness by themselves.

One Canadian woman, named Resty, found herself speaking to collection agencies more often than her doctor when diagnosed with cancer in 2015. Faced with mounting debt, angry calls from shady unauthorized lenders, and feeling forced to keep both her illness and financial situation a secret from her family was almost too much to bear.

No one should have to face these battles alone.

During a health crisis, it is more important than ever to reach out to your community, friends, and family for support – and, possibly, in new ways.

Borrowing money from family and friends to pay bills may not be an option for everyone, let alone a long-term solution. It may actually cause more stress and strain if those friends and family have to manage debt of their own too.

Financial Assistance Doesn’t Have to Be in The Form of Money

There are many ways trusted friends and family members can help you free up the time and energy needed for the challenge that lies ahead. Including:

  • Managing your paperwork
  • Filing insurance claims
  • Researching your options for financial assistance and submitting applications
  • Tracking your spending and reviewing your budgets with you
  • Submit bill payments online
  • Picking up and delivering your groceries
  • Making food
  • Providing afterschool care for your children
  • Assisting with housecleaning or mowing the lawn

Asking for help is not a sign of weakness.

If you are worried about becoming a burden, only ask for one form of help from each person. This allows you to divide and conquer your recovery powerfully and also makes each ask for help feel less heavy (because the big tasks are chunked into smaller asks).

Money Management While Sick

The key to all money management (and stopping stressful collection calls) is increasing revenue and decreasing expenses. Government benefit/credit programs are a great place to start supplementing or increasing income during a health crisis.

Drug Benefits

There are various provincial plans available to help citizens cover the cost of medicine and pay bills associated with prescription drug costs. In Ontario, for example, there are many forms of assistance in the Ontario Drug Benefit program. Depending on where you work, you may even be entitled to statutory sick pay.

Insurance Benefits

Review all of your insurance policies to see what benefits you can claim while you’re on sick leave. This When unable to pay credit card debts, bankruptcy may be your best solution. includes life insurance policies, mortgage payment protection, and income protection insurance. You might be surprised by what benefits you qualify for when you pay credit card debt. Do the math, though. Depending on your illness, your pay outs may be higher and decrease the amount of government benefits you receive.

Social Assistance

Well-known social assistance programs, like long-term disability, are also readily available to Canadians in need. Though, the onboarding process is not instantaneous. Also, these payments alone are often not enough to cover all of an applicant’s living expenses, health care costs, or mounting debt liabilities. So, use the government Benefits Finder to ensure you apply for all of the benefits and credits you can.

For those affected by COVID-19, the CERB is quick and easy to qualify for. The offer is only a limited monthly amount for a short period of time, though. It also doesn’t take into account what your true costs of living and healing are.

Run for YOUR Cure!

Consider running your own crowdfunding campaign to raise the money you’ll need for your treatments and medical bills. People run for this-and-that cure all the time – surely, some of them would be willing to do the same for someone they know and care about in their own community.

Seek Debt Help

When traditional methods aren’t enough, more robust strategies are necessary to help manage the high-interest debts incurred from skyrocketing health bills and reduced income. In some cases, bankruptcy may be the only way to ensure a full recovery (financially and otherwise). A consumer proposal is a popular alternative.

Using a Consumer Proposal to Manage Debt

Without the burden of past debts, patients are free to focus on healing, re-entering the workforce, and rebuilding their future. If you are looking for an empowered way to get through a short or long-term illness financially, but are struggling to manage debt, a consumer proposal may be your best option.

Consumer proposal services from a Licensed Insolvency Trustee have helped thousands of Canadians deal with debt during family health challenges. Proposals are administered by a Licensed Insolvency Trustee (LIT) who negotiates with your creditors on your behalf. The process reduces your total amount of debt owed by up to 80% and, in turn, alleviates the stress of unpaid bills, growing interest, and large minimum payments.

Unlike bankruptcy, proposals allow you to keep your assets. You pay credit card debt and all other debts back with one single (and much lower) monthly payment until the agreed upon amount is paid in full. Also, the collection calls stop – immediately (which makes money management a more peaceful experience).

A Licensed Insolvency Trustee Can Help During a Health Crisis

If you or your loved one are experiencing a health crisis or long-term illness and struggling to pay bills or manage debt, explore all your options. Our team can walk you through the pros and cons of bankruptcy and determine if a consumer proposal is suitable to your unique situation.

You can speak with a Spergel Licensed Insolvency Trustee from the comfort and safety of your home in the following ways:

Our commitment to you during lock-downs: Our LITs have been and will continue working remotely and provide all consultation and counseling sessions virtually for the safety of our staff and clients, while also ensuring our standards of client confidentiality and care continue to be maintained.

Our experienced trustees have been helping hundreds of thousands of Canadians with money management and debt relief solutions for over 30 years.

Don’t let your financial worries impede your recovery.

Contact us today to discuss your options.

Helpful starting information:

What to Bring to an Appointment

To get the debt help that you need, please bring a list of who you owe and how much to each, a list of everything you own and your monthly household budget. Don’t have everything right away? Don’t worry – We will guide you through each step.

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Your Information

We’ll walk you through our application process. But, if you want to prepare for your debt free assessment consultation in advance, download our information form and fill in what you can.

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Calculate Your Debt Repayment Options

How can you compare your debt repayment options if you don’t know how much they will cost you? Your solution will become much clearer when you are able to compare costs.

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Ready to Be Debt-Free?

If you’re ready to be debt free, it’s time to meet with one of our knowledgeable Licensed Insolvency Trustees at your convenience and get started

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