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How Bankruptcy Saved One Single Mom’s Life & Gave Her A Fresh Start

This past weekend the CBC’s The Sunday Edition With Michael Enright ran a thought-provoking and sensitive essay by single mom, Kyla Hanington. This is an extremely interesting and emotional story about someone who went through tough financial times before discovering a solution that altered and dramatically improved her life. Just when she thought there was no hope, a credit counselor referred her to a Trustee – a decision that (in her own words) “set her free”. We would like to thank and acknowledge the CBC for bringing this important issue to the public’s attention.

Her detailed story follows below:

Kyla had tried to work with her creditors numerous times to reduce the interest rates she was being charged on her credit cards, to no avail.  She describes the hoops she had to jump through with her creditors:   “Seven times in the preceding two years I had approached the bank that held the lion’s share of my credit card debt and asked them to reduce the interest from 20 percent to something more manageable, something more like 10. I explained that I had been laid off, that I was now not only a single mom but a full-time student, living on student loans. I explained that I was trying my best to pay it off but I couldn’t even make a dent in it with interest that high. Seven times they turned me down. The last time I met with a bank officer, she told me to make all my payments on time for a year and then come back and she’d consider it. I shuffled off, head bowed. Just when Kyla thought things might start to improve, her mortgage company foreclosed on her home, the home she shared with her two young children:  “And then the mortgage company told me they were calling the mortgage – a forty-year-mortgage with no money down, made back in the day when you could still do that. I have paid nearly sixty thousand dollars towards that mortgage. Nearly five years in, I have yet to touch the principal. Get a new lender, they told me or come up with the pay-out amount, the same amount of money I borrowed initially. Impossible. I cried.” Kyla didn’t know what to do, or where to turn.  She was distraught and ashamed.  At the end of her rope, she spoke to her employer about her financial nightmare.  Her employer sent her to a local credit counselor, who ended up referring her to a Licensed Insolvency Trustee:  “For a week I walked around numb, as though everything I had been fighting for, so hard for so long, had just collapsed. Vanished. As though I had lost my children their home. I couldn’t believe, I told my boss, sobbing, that after all that effort, everything had all fallen apart in the end. I told her I had always been afraid I was going to die alone and be eaten by dogs and here I was – losing the house. I can’t believe, I said, I can’t believe it ended this way.”  “My boss held up her hand. “Hold on,” she said. “The dogs haven’t gotten you yet.” Meeting with her Insolvency Trustee is a decision which Kyla considers one of the best things she ever did:  “And with that I entered into a long period of stillness, and when I emerged I went to a credit counseling place, where they took one look at all my debts and my non-existent assets and went straight to suggesting I declare bankruptcy. And then I went to a licensed insolvency trustee who suggested exactly the same thing. He reviewed what that would mean for me.” The Trustee patiently explained Kyla’s options to her, and outlined for her just how easy it would be to rid herself of her debts forever.   She was incredulous and realized just how long she’d been struggling to pay down her debts, without even making a dent in the principal amounts owing.  Now the Trustee was going to help make all of her debts go away: “I have been paying a thousand dollars a month in credit card debt,” I said, “for more years than I can count, and I haven’t even made a dent in what I owe, never mind that I’ve paid the debt some four times over. And you’re telling me that I can pay less than that, a lot less than that, for 21 months – and then this is over?” He nodded. “Do you just make people happy all day long?” I sniffled through the tears. He said, “If it feels this good to you, you know it’s the right thing to do.” Kyla was just like many of us; always hopeful we can dig ourselves out from our debt-load and scared to admit that maybe a little help from a professional like an Insolvency Trustee could help us clean up our debts quickly and professionally:   “I keep thinking I should have done this two years ago. But I kept going, kept borrowing, kept paying, kept trying, month after month. And I kept doing that for two reasons. For one, it’s the right thing to do, isn’t it? You borrow money, you pay it back. For two, there was shame. To admit defeat would be to admit failure, would be to announce to myself and the world that I couldn’t cut it. Now I feel like, hey. I accumulated that debt to take care of my family, and I am grateful for it. And I paid that credit card debt four times over. The bank is NOT getting ripped off here. They’ve done just fine by me. Kyla soon discovered there was life after debt, and that a fresh start was the very best thing she ever could have done.  Luckily she met with a Trustee and was able to reach the point where she was debt-free at last:  “Eight years ago, I grabbed my kids and carried them through a whirlwind of challenge and uncertainty. I got us to solid ground. The tidal wave may have crashed over us, but all it did was wash away the wreckage of the past. We are on terra firma. And we are free.” Kyla discovered something that thousands of other Ontarians have also discovered: Working with a Trustee means freedom from debt. Kyla chose bankruptcy protection as her path as it was the right choice for her circumstances.  But there are a number of options available to you. In fact, when you visit one of our offices and meet with one of our licensed Trustees you will hear about bankruptcy protection AND the benefits of a consumer proposal, too. Consumer Proposals are an alternative to bankruptcy and our website will provide you with a wealth of material on how they work and how they can benefit you right now. Contact us today so we can get you started immediately with a permanent solution to your debt problems.