A Debt-Free Christmas

The Best Gift Under Your Tree

When the only thing you can think about as the holidays approach is, “How am I going to pay for it all?” it might be time to start thinking about lowering your personal debt. Debt is one of the major contributors to stress and anxiety. You might even be thinking about looking for debt consolidation services.

The fact is, the greatest gift you can give to yourself and your family is the peace of mind that financial stability brings.

What are the Most Common Debt Problems?

Many people who face financial difficulties typically share the same debt problems. Every time that a major purchase was made, a new credit card was added to the collection. Over the years the balance carried from month to month grew until it became impossible to pay down the balance as late fees and interest rates grew. Debt across multiple credit cards turned into a failing juggling act.

The other common major debt problem happens when the mortgage or car payment is deferred in order to cover an emergency expense. When the paycheck finally arrives, it disappears into the groceries, heating bill, and daily trips for coffee. Finally, the lender demands repayment in full or threatens to take the property.

Identifying Personal Debt Problems

Before it is possible to get rid of the mountain of debt and avoid bankruptcy, it is necessary to identify where all the money is owed. Small loans are often perceived as no threat to financial stability, but when the credit cards and accounts are totalled, it becomes clear it is an amount that cannot be paid down quickly or if at all. Tracking the small purchases made all month long may highlight spending habits that are out of control.

It is time to create an honest list of reasonable monthly expenses and figure out how to pay down the overwhelming debt.

Advice and Strategies for Dealing with Debt

A licensed financial advisor can help bring a healthy point of view to the table and put the client on the path towards economic stability. It doesn’t happen overnight, but with a shared commitment it is possible to minimize the debt and start to look forward to the future.

Consider Debt Counselling For a Professional Perspective

Baker Tilly Ottawa Ltd., a Licensed Insolvency Trustee, will help create a debt management plan that will help stop interest from accruing and substantially reduce the principal balances owed. Principal reductions of 60% to 70% are very common. The professional debt counselling approach will offer hard numbers and a timeline for success. Time will be spent to create a budget that not only provides for all the necessities of life, but leaves room for a little entertainment, and to greatly reduce the overall debt you owe.

Debt Consolidation is Available for Extreme Cases

When the collection calls don’t stop, wages are being garnished, and the amount of the debt is beyond the ability to ever pay it back, it might be time to consider debt consolidation or a consumer proposal. It is possible to negotiate lower interest rates and create a payment plan the creditors will accept. It does affect credit ratings and commits the client to a long-range payment plan. However, it can give hope and a path forward while avoiding bankruptcy.

How Much Does a Canadian Christmas Cost?

According to a recent survey, the average Canadian will spend $570 on Christmas gifts, with parents spending another $150 on top of that. Most people use credit cards and many say they will go into debt for the holidays. For a person who is facing severe personal debt problems, the added expense simply adds to the stress of the season.

Tips for Saving and Staying out of Debt During the Holidays

In order to start down the path of financial stability, make the most of the holiday season this year while reducing the money spent on gifts and extravagant decorations. If you’re not sure where to start, here are a few tips to help:

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  • Santa had it right! Make a list and budget before you head out to the stores and stick to it.
  • Use cash where possible and leave the credit cards at home
  • Make use of lay-away programs where offered—they don’t add to credit card balances and don’t charge interest
  • Spend time on homemade gifts–they are often more appreciated compared to gift cards
  • Host a party instead of buying gifts for friends and neighbors
  • Play games with the kids instead of purchasing expensive electronics
  • Create new traditions and decorate using stored treasures instead of buying new ones
  • Shop during the day when stores are less crowded, and you are not pressured into impulse purchases


After the last bottle of champagne is opened in the New Year, it will be liberating to realize that your holiday celebrations did not contribute to your debt and that you have taken steps to return your entire family to a financially stable position by creating a debt management plan. What better gift could there be?

Baker Tilly Ottawa Ltd., a federally-licensed Insolvency Trustee, is highly experienced in assisting individuals to escape financial stress. Many of our clients file a consumer proposal to substantially reduce debt principal that is owed, and to then have a single affordable monthly payment to pay off this reduced amount.