Why Debt is Not Your Fault

^{By Bromwich+Smith Staff | 600 words | Reading Time: 3 minutes | Date: 2022/06/21}

There are a number of personal finance personalities, on the radio and TV, who like to tell you  that you have too much debt because you spend too much. However, let's think about this, are all of our financial problems entirely our fault? Or are there other factors that lead to debt?

While we need to take responsibility for our actions, there are circumstances that are beyond our control and unfortunately lead to debt challenges. Preparation for unforeseen circumstances with an emergency fund can be very helpful but even if you do everything right, things can happen that will impact you financially. Rather than placing blame, it’s always better to learn from any situation and take corrective steps to repair our future rather than dwell on the past.  

Some of the challenges that can cause debt:

1. Aggressive and sophisticated marketing ‘selling’ debt as good

One of the most aggressive, and often effective, marketing activities is direct solicitation. Financial institutions of all types send pre approved credit applications in the mail. Your current lender may notify you that they have automatically increased your credit limit without seeking your permission. Walk into almost any major retailer and there is likely a friendly person at the front asking if you want to apply for their credit card in exchange for a free gift. These are all common tactics, and can be very difficult to resist. 

2. Job loss makes it difficult to pay off debt

More than half of all bankruptcies and consumer proposals filed in Canada are caused primarily by a reduction in income, and in many cases that’s caused by job loss. If you lose your job it can be very difficult to keep up with existing debt payments and worse, you may use debt to survive until you find another job.

3. Illness and time off work can create more debt

Illness, injury, and health related problems are another primary cause of bankruptcy in Canada despite our public healthcare system. If you have a full health plan at work you may be able to afford your medications, but it is often the time off work, with reduced or no pay, that causes people to resort to debt to survive.

4. Divorce can lead to problems repaying joint debt

Many Canadians face debt because of a relationship breakdown, separation or divorce. More than a quarter of people filing bankruptcy are divorced or separated at the time they file.

5. Student loans are getting harder to repay

Sadly, in too many cases, the cost of getting a higher education for most young people today requires taking on large amounts of student debt. It’s almost impossible for a student to earn enough money during the summer or with a part time job to cover tuition, residence, books and all the other costs of going to school. 

In the end, even though these scenarios can make debt not your fault we do need to be responsible for our debt and the choices we make. Before situations arise that feel out of your control, try to predict how you can support yourself to not incur more debt. We have many resources and blogs at your disposal that can support you in planning for unexpected financial challenges. 

At the same time, if you are experiencing debt you're not alone. Bromwich+Smith has a number of debt relief strategies to help you regain control of your finances and get your life back on track. Reach out today for a free, confidential, no obligation consultation. Bromwich+Smith’s Debt Relief Specialists are available by phone at 1.855.884.9243, or request a call back at contact us page. We want to see you flourish!