Q: I’m so worried and can’t sleep. My husband and I always worked a lot so that we had enough money to send home to my family. But right now we have almost no money left because the hotels we work at are closed. I feel very lucky that I married a good man who helps my family in my country, but now I’m so worried that we can’t pay our bills. My brother back home told me that I can go to jail and said to stop sending them money. I don’t know what to do because my family has not enough money to live if we don’t support them. But without our jobs we don’t have enough money to live. I don’t know what to do and I’m scared to tell my husband that we could go to jail because of helping my family. What can I do? ~Jasmine
A: These are very stressful times not only here in Canada, but around the world. Our stress is only made worse if we are worrying about our families overseas where there is less government and community support available. For many households in Canada, sending money back home is absolutely necessary. Our families rely on this financial support to pay for safe housing, buy enough food, obtain health care and education, and support family members who are not working or retired. Many countries have no way to provide the social support we are so fortunate to have here in Canada.
But our life here comes at a cost and you are faced with a challenging situation. The survival and well-being of your family back home might even depend on the money you send them. This is a compelling reason to help, and you may feel morally obliged to do so. However, the financial support you provide must be balanced against the needs and well-being of your family here in Canada.
There is no jail time for debt
Let me start by putting your biggest worry to rest: In Canada, people do not go to jail for having debt that they can’t repay. That’s not to say there aren’t any consequences; there are, but jail is not one of them. And while there are legal consequences when you’re in debt, some of the biggest consequences are due to the stress you’re under when you don’t have enough income to make ends meet.
The unknown can make you sick with worry
Worrying about debt and unpaid bills is stressful, and when you don’t know what may or may not happen when you can’t repay what you owe, that only compounds the stress. Furthermore, when you’ve lost most of your income, despite wanting to take care of your obligations, that’s not the time to start trying to repay your debts. You simply can’t repay debt with no money .
It’s important to remember that when your income is drastically reduced, you need to spend whatever you can afford to keep yourselves as healthy as possible so that you can return to work when the time comes to do that. Before you send any money home, make sure that you’ve got at least your basic necessities covered, or that you’ve got an alternate way to cover the necessities, e.g. community support with meals or daycare.
How Can I Help if My Friend is Having Money Problems?
Consequences when you’re in debt
During this time of the coronavirus pandemic, many creditors have changed their approach with how they work with their customers who have recently fallen behind with their payments, but as workplaces reopen this will change. If you’re able to resume a former level of income fairly quickly, you may only receive reminder letters or past-due notices. If your debt is such that you’re either unable to catch up or interest and fees make it impossible to get back on track in a reasonable amount of time, your creditors will turn to other means in order to try and compel you to pay.
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If proactive steps aren’t taken and you’re unable to pay your rent or mortgage, you may face eviction or foreclosure . Household utilities may be disconnected. Your income and/or bank account may be garnished. You may no longer be able to use any available credit on credit cards, lines of credit or overdraft. If you fall behind on your car loan, your vehicle may be repossessed. To make matters worse, many families borrow from any available source to send money back home, on top of what they have already sent. This can ultimately force them to declare bankruptcy if they’re in too far over their heads.
The stress that comes from dealing with debt can interfere with your performance at work or could cause you to become so ill that you can no longer work. Worrying yourself sick won’t help anyone, so it’s important to understand that there are ways to deal with debt and places to get help before it gets any worse.
How to deal with debt
When we’re stressed and don’t know what to do about what we owe, it can be tempting to try and ignore the situation. I would caution you against this. As hard as it may be, the longer you wait to deal with your debts, the worse the situation will get.
Start by taking stock of where you’re at — create an emergency budget if you’ve lost your income. Or if you’re back to work, use an interactive budgeting tool to create a realistic budget . One of our credit counsellors would be happy to help you with this if you’re not sure where to start. They’ll also be able to give you information and guidance so that you can find a good option to get back on track . If you’re unable to pay your debts and bills at all, the counsellor will explain how to communicate with your creditors effectively so that they’re aware of your situation.
A budget is crucial because it will help you see where you stand and what debt payments are possible. With a budget you’ll also be able to determine what you can afford to send home and still meet your needs and obligations in Canada. If your family knows that you’ll be sending less money home in the future, they can take steps to prepare themselves.
The bottom line on helping family and dealing with debt
Near or far, no one likes to see their loved ones struggle. While your family back home depends on your help, they may not understand that life in Canada is more expensive than where they live. They might not even realize that you’re sending them more money than you can afford to send. Finding a way to ensure the well-being of your family at home, while maintaining a reasonable standard of living for yourselves here with a plan to deal with your debts, will give you peace of mind.
Related reading:
What to Do When You Receive a Notice of Claim
How to Create Your Own Windfall When Luck Comes Up Short
Choose the Right Debt Consolidation Plan for You
Scott Hannah is president of the Credit Counselling Society, a non-profit organization. For more information about managing your money or debt, contact Scott by email , check nomoredebts.org or call 1-888-527-8999.
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