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What Sunburn Can Teach Us About Bankruptcy in Canada

I am a bankruptcy trustee in Canada, so every week I meet with many people in financial trouble. This past week was an interesting week, because I met with many people who had obviously spent too much time in the sun. Literally.

In Ontario, and in many parts of Canada, we have had a run of unusually warm weather. Many people spent a lot of time outdoors for the first time since last fall. The sun was shining, and many people have arrived in my office with sunburn. I’m not being critical of these people; I’ve spent the last week nursing my own sunburn as well. What’s most amazing to me is that we all know better. We have all had sunburn before. We know that we should wear sunscreen, and wear a hat, and avoid the sun, but we forget our sunscreen, don’t wear a hat, and then go outside in the sun, and we are amazed that we get sunburn!My theory is that if we haven’t experienced the consequences of our actions recently, we forget the result. We’ve all heard the expression that “if a mother remembered the pain of childbirth, no woman would ever have more than one child.” Not being a woman I don’t know if that’s true or not, but it does illustrate the point.

Sunburn is the same. If we haven’t had sunburn for six months, we forget the pain of sunburn. We assume it won’t happen to us. We go outside, and are so happy to be out in the sun, we ignore the consequences.

So why am I talking about sunburn on a web site about bankruptcy in Canada? Because debt is like the sun. In small amounts, debt won’t hurt. But excessive exposure to debt, like excessive exposure to the sun, is very painful.

Over the last few years, while the Canadian economy was booming, many of us took on a lot of debt. We borrowed to buy a bigger house, a new car, and then we kept borrowing to furnish our home, to go on vacations, and to keep on spending. If your income continues to increase, that’s not a problem, but when your income drops, or when you forget to wear a hat in the sun, you get burned.

So what’s the solution? To avoid sunburn, stay out of the sun. To avoid excessive debt, only borrow when absolutely necessary. A mortgage on a small house may be fine if you can make the payments; a mortgage on a huge house, and two car loans, and carrying balances on credit cards is probably a recipe for disaster.

If you already have sunburn, drink lots of fluids, and talk to your pharmacist or doctor about what to put on it.

If you already have more debt than you can handle, talk to a bankruptcy trustee. There are many possible solutions, including filing bankruptcy in Canada. or a consumer proposal; your specific circumstances will determine the correct solution.

And stay out of the sun.