How To Manage Your Debt When Disaster Strikes

By – Cameron Don, founder of CrediFIX Inc. and Vertex Credit Solutions

It’s been said that when disaster strikes, it brings out the very best in humanity – and the Alberta floods of 2013 are a perfect example. People from every facet of the community worked side-by-side to clean up and repair damages, Merchants and non-profits donated cash and essential items while countless others selflessly opened up their homes to evacuated families and their pets.

Unfortunately it’s also true that disaster can embolden the dark side of our society. Victims of a flood or other natural disaster are a perfect target for criminal opportunists who prey on people when they are at their most vulnerable. City police investigate complaints of fake charities that work their scam door-to-door in broad daylight or sham construction/repair companies that take your up-front deposit and disappear into the night. Disaster victims should always be wary of these outright criminals.

People affected by a major crisis such as a flood are often confused, exhausted, injured, scared, angry and feeling like they are right at the end of their rope. They are forced to make dozens or even hundreds of choices about family, health, safety, property, job, possessions and their money – all at a time when they are least mentally prepared to do so.

When you’re in a disaster situation and you’ve got your physical and mental energies stretched to the limit, you need to know how to avoid something much more common and therefore probably even more dangerous: making bad decisions. My area of expertise is dealing with debt so I’m going to go into detail on that right after I give you a few tips on good financial decision making in general.


Good Financial Decision Making 101

  • Clarify your goal, determine between needs and wants
  • Explore your options.
  • Make a budget.
  • Don’t get tunnel vision; look for solutions with both short and long term benefits.
  • Separate your emotions from the decision.
  • Sleep on it.

Now that you’ve got that knowledge in mind, I have to tell you that even if you make all the right decisions, unless you happen to be part of the richest 1% of the population: debt happens, it’s just a fact of life. Unfortunately in the debt business we also deal with unscrupulous companies that prey on uninformed consumers on a daily basis. In situations like this disaster, businesses pop up or move in from the US and other parts of Canada, to take advantage of the situation. Although Alberta has some of the best consumer protection rules in the country, this current situation of desperation will just compound the problem.

Some companies make outrageous promises, charge fees upfront and in the end either can’t provide the services they have promised, or disappear with the deposit. Outside of these criminal activities, there are many situations where totally legitimate companies offer you choices that are ultimately just bad for you. In all cases, your best strategy is to use your head.

I’m going to share with you some insights I have gained from years of experience in the debt counseling industry but you should never take anyone’s words for the whole truth, even mine. Always do your own research, think critically and make your own decision.

Bad Choices When Managing Your Debt


Guaranteed Discounts
Settlement companies offering to settle debts for a fee upfront for a seemingly guaranteed discounted rate, have no actual ability to guarantee anyone any rate. Creditors do not have a guaranteed discounted rate, each case is reviewed on a case by case basis & the rate settled for is not determined until we’ve spoken and negotiated with the creditor. (i.e. $ 0.45 / on the $1.00).

Consent To Judgement
Non for Profit companies clients have to sign a “Consent to Judgement” which means you sign away your right to defend yourself in court at a Payment Hearing, where you can stand before a judge with your budget and asset list in hand that can force creditors to accept reasonable payment amounts and not just blindly have the right to garnishee wages.

Trustee’s will, or at least should, tell you that they do not work for you the consumer. When making an assignment into Bankruptcy some of your assets will be exempt (you can keep them) and some are not. Trustee companies will have you sign over all un-exempt assets for the benefit of all creditors.

Short-term High-Interest Paycheque Loans
A reminder here, that short term paycheque loan companies charge the equivalent of between 450% and 500% interest. Many times people take short term loan thinking they can pay them back next pay day. Once payday rolls around and the loan is paid back the consumer is forced to take out another, larger loan to cover the short fall from their paycheque thus having a snowball effect.

First opportunity
Under these circumstances, people are tired, frustrated with their insurance companies, and they just want their situation dealt with. In many instances the first “sounds good” opportunity that comes along, and appears on the surface to be the solution to their problem, people jump at and they are taken advantage of.

Where To Go For Help With Debt

Here at CrediFIX Inc. we strive to educate consumers and assist in making good choices. We are licensed and bonded by the Alberta Government to work on behalf of you, the consumer, to assist with your debt management. We at are located right here in southern Alberta providing Albertans with a wide range of options that other companies can’t. We empathize with all Albertans affected either directly or indirectly by this historic flood. People have lost their homes, their belongings, their rental properties, their businesses, their jobs and livelihoods and our heartfelt thoughts & prayers continue to all our neighbours in Calgary & surrounding communities.

We offer a free consultation, in person or on the phone, contact us so that we can explain all of the options you have to deal with your debt.


Free Debt Assessment