This is the true story of a man who lost his business and fell deep into debt. We asked him to tell his story. These are his words which we’ve left unedited.
This is an on-going story. You can read month one here.
In March, I had to close my advertising agency and let all my staff go. My business debts were too significant to proceed. I went through a spectacular two meltdown as a result.
It was July now and I had managed to secure a position working at one of the other major marketing companies in town, so money began to slowly trickle in to cover off the day-to-day expenses and bills that had been long neglected. I was back to eating regular meals again and the sound of the telephone ringing or a knock on the door no longer sent me scurrying for cover.
More importantly for me, July was the month where Benjy (my specialist at the Victoria BC 4 Pillars office) helped me file my Consumer Proposal with the bankruptcy trustee. I had spent the previous few months begging and borrowing from anyone I thought could spare some cash, so I could offer my creditors a lump sum payment on my debt, rather than spread out the payments over several years.
The purpose in paying it off at the outset was to increase my chances of the Proposal being accepted and to speed up the process of rehabilitating my credit rating.
I had reconciled myself to the impact a poor credit rating would have on my life. Tied to my business’s debt, I was going to feel the repercussions for several years.
I was nearly 4 months clear of the day when I had to let all my staff go and inform my clients and my community that my business had run aground. I was no longer experiencing the crippling anxiety that had characterized the first few months after the closure. I still weighed under 150 lbs, but it was no longer from a lack of appetite but from a lack of time to eat.
One day towards the end of this month, Benjy called me to let me know the Proposal had been sent to my creditors and they had a few weeks to vote for or against it. A non-vote would register as acceptance of the terms. I sweated out those days, as I imagined my guaranteed creditors, including 3 banks, would push back.
Miraculously, there was no push back and my Consumer Proposal was accepted.
How did I feel? I felt relieved, naturally. And I felt guilty too.
The relief is easy to imagine. I was financially exhausted but my debts had been resolved according to the law, and my creditors had no further claim over me.
But there was a sense of shame as well because I had walked away from a number of unsecured creditors, small businesses like myself who were out of pocket the debts my company owed them but was unable to pay.
Several of my creditors called me up to officially forgive my debt to them. That touched me enormously. A few others continued to email me looking for compensation.
One would do so for over a year, despite the lack of any legal claim. And I can’t say I blame him. I might have felt the same way had I not had the experience I did. When a business in debt goes down, many people suffer. That’s not something my Consumer Proposal could eliminate.
However, with my Proposal accepted and my debt legally resolved, a new process was about to begin: rebuilding my credit rating and my reputation.
Both were going to take time, focus and making the right decisions. After 4 months of unrelenting negativity, it was time at last to move ahead.
I felt ready for the new challenge.
An update . . .
We’ve checked back in with James (real name removed for privacy) and he is happy to report that things have gotten a lot better.
He is busy running a marketing consultancy and has survived his debt crisis. Debt not only changed his life, it reworked how he thinks about his business. He has started a new company that is much leaner and offers an innovative business model.
His new business was recently featured in a local magazine as an example of a successful agile creative business.
