July 10, 2018

Trevor’s Financial Success: Breaking the Alberta Payday Loan Cycle

Due to lack of budgeting skills, Trevor struggled with finances early in life. Despite his efforts working two jobs in hopes to keep up with his debt, he slowly succumbed to the temptation of payday loans—a vicious cycle that eventually led him to over $60,000 in debt.

“I eventually got myself into payday loans and that was a never-ending cycle, and I just got to the point where I couldn’t get myself out.”

Stressed out by the endless amounts of bill payments, Trevor started to feel under pressure from the CRA with outstanding tax payments owed to the Government of Canada.

Debt Counselling and Free Credit Assessment

During this period, Trevor’s life was falling apart with a series of unfortunate events. Due to unaffordable rent, Trevor eventually lost his apartment, adding another $2400 onto his debt. Meanwhile, he also suffered the loss of his father and was let go from his job around the same time, creating a trifecta for the perfect storm.

Desperate to seek financial guidance, he found his answer online with Money Mentors.

After meeting with his debt counsellor for a free credit assessment, Trevor was enrolled into the Orderly Payment of Debts (OPD) program, a debt consolidation alternative to bankruptcy. During the process of a credit assessment, counsellors assess all existing debts with their clients to come up with a repayment plan with a realistic budget.

Due to unforeseeable circumstances and the sudden decrease in income, Trevor reached out to his counsellor, Dolores, seeking guidance on the repayment plan to creditors while he was job searching.

“Dolores and Money Mentors were able to help me cut my repayment to creditors to $90/month for six months.”

Repayment of taxes to the CRA

Shortly after being on the OPD program, Trevor started to see the numbers shifting from the negatives. From drowning in debt to having a full-time job, Trevor began to receive tax refunds from the CRA for the first time in years.

Determined to reach his financial goals, he redirected his extra income to repay his debt, a source to repay his creditors sooner.

“It was money I didn’t have originally,” Trevor said. “Last year, I ended up getting $4,000 back!”

Utilizing the tax return to pay off what he previously owed the government, this put him one step closer to regaining financial freedom. His discipline with money eventually helped him pay off the remainder of his debt under the OPD program.

“This year the CRA said I would be receiving a $300 tax credit and when I got that, I turned it into paying off the rest of OPD!”

Budgeting skills and financial responsibility

Enjoying a new stage in life living debt-free, he reflected on his first meeting with his counsellor.

“My first meeting was great. I left feeling relaxed, not judged. It was one of the few times where I felt like I have a handle on this debt!”

He recalled a piece of money coaching advice from his counsellor that he still uses to this day, and which he now uses to teach his children about financial responsibility: “Put everything into perspective. If I were to go buy something, I would have to put in how many hours to get it?”

With the education received through his counsellor, he is able to resolve his financial crisis and move towards a new stage in life.

Since this interview, Trevor paid off the entirety of his debt in early June. He is currently embarking on a new financial journey with the goal to purchase a house for his family.

 


Money Mentors would like to thank Trevor for sharing his story. Congratulations on becoming debt-free!

If you would like to share your story, please contact our Marketing Manager.

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