Consumer proposal process for a lottery winner? Why?
Here’s a headline I’m sure you all remember – Three winners of the $1.586 billion Powerball jackpot. Here’s a headline you may have missed – The odds are that the US$1.5 billion Powerball winner will end up bankrupt (and if a Canadian, possibly a consumer proposal process).
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As unbelievable as it sounds, it’s very likely that these mega-winners will blow through their money and end up either in a consumer proposal process or become bankrupt like so many of the rich and famous. You can read some of their stories in our blogs.
- Bankruptcy Alternative: The Clinton Portis List For Turning $40 Million Into a Bankruptcy
- Famous Celebrity Bankruptcies Happen Too
- Is Canada’s 1% Immune From Insolvency or Bankruptcy?
- David Cassidy Partridge Family Tour Better Start Soon
- High Earners Living Paycheque to Paycheque
Millions were seduced by lottery fever, even though the odds of winning were infinitesimal – 1 in 292 million, making you 250 times more likely to be hit by lightning.
Why the need for a consumer proposal process?
Studies have shown that instead of getting people out of financial trouble, winning the lottery got people into more trouble. In fact the bankruptcy rates soared for lottery winners three to five years after winning.
Research from the National Endowment for Financial Education estimates that 70% of people who had unexpectedly come into large sums of money ended up broke within seven years. Never-the-less we love buying lottery tickets. According to Statistics Canada:
- The average Canadians spends nearly $500 per year on lottery tickets
- Lower-income Canadians spend about $235 per year (which makes up a considerably larger percentage of their income)
- 25% of Canadians play the lottery weekly. The odds of winning the lottery in Canada are about 1 in 13 million
Relying on a lottery win to avoid a consumer proposal process?
Why do we throw out our hard earning money on a losing proposition? According to a 2012 survey by Capital One Canada and Credit Canada Debt Solutions, 33% of Canadians are banking on a huge jackpot as part of their long-term plan for financial success. Clearly we’ve taken leave of our senses and retreated into fantasy-land.
The reality is that it’s highly unlikely you’ll ever be a lottery winner. The sooner you get rid of the notion that a huge jackpot is part of your long-term financial success, the better off you’ll be.
Waiting for a financial windfall won’t solve your financial problems. Sound advice from a professional trustee and a financial plan for moving forward is the way to a debt free life. Contact Ira Smith Trustee & Receiver Inc. today and take your first step toward financial freedom Starting Over, Starting Now.
If you’re experiencing serious debt issues contact a professional trustee for a free, no obligation consultation. The Ira Smith Team will evaluate your situation within the existing statutes, and help you to arrive at the best possible solution for your problems, whether that solution is a bankruptcy alternative like credit counselling, debt consolidation or a consumer proposal process, or perhaps bankruptcy is inevitable. Starting Over, Starting Now you can be debt free with the help of a professional, licensed trustee in bankruptcy. Contact us today.
