How Reaching Out for Debt Assistance Can Help Single ParentsApr 08, 2016
The increased need for debt assistance is a growing concern in Canada. Consumer proposal and bankruptcy levels have surged in parts of Canada as Canadians continue to borrow, despite monumental debt levels. Families have been hit hard by rising costs of living and real estate inflation. They often feel like they have no option but to use debt to fill in the gaps in household income. Diapers, clothing, groceries and utilities are the basic necessities for a household with young children, but the cost of these basic items are becoming unaffordable to many families. Food Banks Canada report that 850,000 Canadians use the services of a food bank each month and more than a third are children and youth. This illustrates the growing number of households who must choose between food and shelter each month.
Single parent families with only one income to support them are often especially affected by rising costs. In Canada, single parent families account for 12.8 per cent of the population, and 80 per cent of lone parent families are headed by the mother. This can make employment difficult for mothers with small children and can drastically limit the family’s earning power. On a single income, saving can be difficult when income is limited and money needs to stretch. This is when conditions cause single parents to turn to debt to fill in the gaps. A Stats Canada report in 2012 shows that single parents have significantly higher rates of debt at $100,800 compared to single Canadians without kids at $63,200, yet single parent families don’t have the income to service heavy debt.
Debt assistance comes in many forms
When financial health is failing, it is time to evaluate your situation. A financial health test can help you identify the areas of concern within your budget. From here, you can create a clear and accurate budget which details all your expenses-including debt. Calculate your income or average paycheque amount and deduct current monthly expenses.
You may need to seek out debt assistance if debt payments are taking up your paycheques and leaving you with little left each month. Credit consolidation options can include:
- Researching debt help resources and detailing your own family debt relief strategy. The Financial Consumer Agency of Canada website is a great source for tools and resources geared towards dealing with debt.
- Debt counseling services can provide advice about which method of repayment suits your needs.
- Speaking to a lender or financial advisor about qualifying for a debt consolidation loan which combines consumer debts into an affordable monthly payment at a lower interest rate.
- Speaking with a Licensed Insolvency Trustee to discuss a consumer proposal or bankruptcy. Consumer proposals can be an effective option for large debt loads and individuals who have the ability to repay some of their debt.
Look to your local community for debt assistance resources
Debt relief for single parents does not only mean implementing a debt repayment plan. The Sault Ste. Marie community offers numerous resources for families – from free child care to parenting classes. Some of these include:
- Algoma Family Services offers community resources and support for families which includes, parental counselling, parenting classes, child and youth anxiety help and summer day camps.
- Ontario Aboriginal Head Start Association offers free child care in a safe, learning environment. The nursery school provides nutritional meals for children and day trips.
- Once Upon A Child sells gently used children’s clothing and gear at a reduced cost.
Are you a single parent? Share your triumphs and challenges on Twitter with other single parents by searching #BDOdebtrelief and #LetsTalkDebt.