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YOU’RE RICHER THAN YOU THINK: CULTIVATING HEALTHY FINANCIAL HABITS TO OVERCOME MONEY DYSMORPHIA

you're richer than you think
you're richer than you think

You’re Richer Than You Think: What Is Money Dysmorphia?

You’re richer than you think is a slogan used by The Bank of Nova Scotia for its ScotiaBank consumer financial products advertisements. It is normal for Canadians to be concerned about their finances and whether they will have enough to pay bills, pay for their children’s education and save for retirement. Many times we feel that we won’t have enough. That is all normal. But sometimes, the rational can become irrational.

In the present era of digital advancements, social media has emerged as a major contributor to the exacerbation of money dysmorphia, particularly affecting Generation Z and millennials. This irrational unease regarding one’s financial status can result in feelings of inadequacy and financial strain. Here, we explore expert advice on reclaiming command over your financial health.

In this Brandon’s Blog, I discuss how money dysmorphia, influenced by social media comparisons, leads to financial stress. Overcoming it requires setting clear goals, seeking professional guidance, and cultivating healthy financial habits. The reality is, for most people, you’re richer than you think.

Definition of money dysmorphia

Money dysmorphia is a term that resonates deeply in today’s society. It is a psychological condition characterized by the irrational anxiety individuals experience about their financial status. Money dysmorphia can be felt by anyone, regardless of their actual wealth or income. The effects of this phenomenon are very detrimental.

Money dysmorphia is a distorted perception of one’s financial situation. Individuals with money dysmorphia may experience intense feelings of inadequacy or dissatisfaction with their financial status. This condition can lead to compulsive spending, hoarding, or other maladaptive behaviours related to money management.

Individuals with money dysmorphia may also have difficulty accurately assessing their financial resources and may engage in risky financial decisions as a result. It is important for individuals experiencing symptoms of money dysmorphia to seek professional help. Financial therapy, behavioural therapy or financial counselling, to address and manage their symptoms effectively are all avenues to consider to get help.

Who is affected by money dysmorphia?

Money dysmorphia can affect individuals from all walks of life, regardless of their socioeconomic status. It creates a significant impact on their financial well-being, relationships, and overall quality of life. While anyone can be susceptible to money dysmorphia, certain factors such as childhood experiences, societal pressures, and personal insecurities may increase the likelihood of developing this disorder.

The FP Canada’s 2024 Financial Stress Index, reveal a concerning trend of heightened financial worries, particularly among younger demographics like Generation Z and millennials. Factors like rising inflation, escalating housing costs, and the overall economic landscape contribute to this growing sense of financial insecurity. A study by Credit Karma shows similar results.

You’re Richer Than You Think: Causes of money dysmorphia

The causes of money dysmorphia can be complex and multifaceted, but some potential contributing factors include:

Cultural and societal influences

  • Societal pressure to consume and keep up with material possessions can contribute to an unhealthy relationship with money.
  • Limited understanding of personal finance and money management can lead to feelings of uncertainty and anxiety.
  • Exposure to social media may foster unrealistic expectations and comparisons, potentially resulting in feelings of inadequacy and discontentment with one’s financial circumstances.
  • Environmental factors such as poverty, economic instability, or financial insecurity can contribute to money dysmorphia.

Personal experiences and traumas

  • Childhood experiences of financial stress, poverty, or neglect can lead to a distorted relationship with money.
  • .Chronic financial stress can lead to feelings of anxiety, guilt, and shame.
  • Family members’ financial behaviour, attitudes, and values can influence an individual’s relationship with money.
  • Major life events, such as job loss, divorce, or illness, have the potential to trigger or worsen distortions in perception and reality.
  • Limited financial literacy can lead to feelings of uncertainty and anxiety.
  • Low self-esteem or self-worth can lead to an unhealthy relationship with money, as individuals may use money as a means to compensate for feelings of inadequacy.

Mental health conditions

Various mental health conditions, including anxiety, depression, and obsessive-compulsive disorder, have been identified as potential factors contributing to the development of unhealthy attitudes towards money. An individual’s values and beliefs regarding financial matters, such as the perceived importance of material possessions or the necessity of saving, can significantly influence their relationship with money.

Research indicates a possible correlation between these attitudes and abnormalities in brain regions associated with emotional processing, such as the anterior cingulate cortex. Additionally, specific personality traits like perfectionism, rigidity, or impulsivity may heighten one’s susceptibility to developing problematic financial behaviours.

Setting unrealistic or unattainable financial objectives can lead to feelings of frustration and disappointment, ultimately exacerbating the condition known as money dysmorphia.

It’s essential to note that money dysmorphia is a complex condition, and multiple factors may contribute to its development. If you’re struggling with money dysmorphia, it’s crucial to seek professional help from a mental health expert or a financial advisor to address the underlying issues and develop a healthier relationship with money.

you're richer than you think
you’re richer than you think

You’re Richer Than You Think: Impact of Social Media on Financial Well-Being

The comparison trap on social media platforms has become a prevalent issue, especially among younger generations like Generation Z and millennials.

When scrolling through social media feeds, it’s easy to fall into the trap of comparing one’s financial status to the seemingly perfect lives portrayed online. This constant exposure to curated content can fuel feelings of inadequacy and financial stress, creating a flawed perception of reality.

Social media is pivotal in perpetuating financial insecurities, creating a platform where comparisons run rampant. The carefully curated highlight reels and seemingly flawless lives showcased on social platforms can distort perceptions of reality, leading individuals to question their financial standing. This constant exposure to unrealistic standards can fuel feelings of inadequacy and breed a culture of comparison.

It is imperative to comprehend the impact of social media on shaping financial attitudes and behaviours in addressing issues related to money dysmorphia. Acknowledging that online depictions often present a curated and exaggerated representation of reality enables individuals to liberate themselves from the comparison trap. It is essential to foster a mindset that prioritizes personal growth over seeking external approval, concentrating on individual financial objectives and ambitions rather than external standards.

You’re Richer Than You Think: Who is most affected by money dysmorphia?

Money dysmorphia, also known as financial anxiety disorder, can affect anyone who has a distorted perception of money and financial reality. However, certain groups may be more prone to experiencing money dysmorphia due to various factors.

Young adults and millennials

People in their 20s and 30s may be more susceptible to money dysmorphia. Let’s explore these and other factors more closely:

  • Career establishment: This age group is often in the process of establishing their careers, which can be a significant source of stress. The pressure to secure a job, climb the corporate ladder, and achieve professional success can lead to financial anxiety and a distorted view of money.
  • Student loan debt: Many individuals in this age group are still paying off student loans, which can be a significant financial burden. The pressure to manage debt, make timely payments, and avoid default can contribute to financial stress and anxiety.
  • Building a financial foundation: This age group is often expected to establish a financial foundation, including building an emergency fund, paying off debt, and starting to save for retirement. The pressure to achieve these financial milestones can lead to feelings of inadequacy and financial anxiety.
  • The impact of social media: Platforms such as Instagram and Facebook frequently portray the idealized lives of others, complete with their financial achievements. This can cultivate unattainable standards and feelings of inadequacy, prompting financial distress and a distorted perception of wealth.
  • Changing financial priorities: As people enter their 20s and 30s, their financial priorities often shift from living expenses to long-term goals, such as buying a home, starting a family, or achieving financial independence. This shift can be overwhelming and lead to financial anxiety.
  • Growing financial commitments: As individuals transition into their 20s and 30s, they often assume additional financial obligations, which may include providing for dependents, covering healthcare expenses, and overseeing household finances. These augmented financial responsibilities can lead to heightened levels of financial strain and anxiety.
  • Insufficient financial education: Individuals within this demographic may have not been equipped with sufficient financial education or guidance, resulting in feelings of uncertainty and anxiety regarding their financial status.
  • Social comparison pressure: The societal expectation to align with the lifestyles of peers, coworkers, and social media figures can result in sentiments of insufficiency and economic distress. Individuals may perceive a need to conform to current fashions, acquire the latest technologies, or engage in extravagant travel experiences to uphold a desired social standing.
  • The phenomenon known as the fear of missing out (FOMO): Pertains to apprehensions about missing out on financial prospects, career advancements, or life experiences, which can give rise to financial stress and a skewed perspective on money.
  • Lack of financial self-assurance: Individuals in their 20s and 30s may exhibit a lack of financial self-assurance, leading to feelings of doubt and anxiety regarding their financial circumstances.

Individuals with low self-esteem or a history of a history of trauma

Individuals with low self-esteem or a history of trauma may be more susceptible to money dysmorphia due to the following reasons:

  • Negative self-talk: People with low self-esteem may have a negative inner dialogue that can manifest in their financial decisions. They may believe they are not worthy of financial success or that they don’t deserve to have money. This negative self-talk can lead to financial anxiety, fear, and a distorted view of money.
  • Fear of rejection: Individuals with a history of trauma may have a deep-seated fear of rejection, which can manifest in their financial decisions. They may be overly cautious with their finances, hoarding money or avoiding financial risks, due to a fear of being rejected or abandoned.
  • Low self-esteem: Individuals who have experienced trauma may encounter challenges related to shame, guilt, and self-blame, resulting in diminished self-worth. This may influence their financial behaviour, as they may perceive themselves as undeserving of wealth or lacking in worthiness to attain financial prosperity.
  • Hyper-vigilance: Individuals with a history of trauma may be in a state of hyper-vigilance, always on the lookout for potential threats or dangers. This can manifest in their financial decisions, as they may be overly cautious or risk-averse, leading to a distorted view of money.
  • Challenges with establishing boundaries: Individuals who have experienced trauma may encounter difficulties in setting and upholding appropriate boundaries, potentially impacting their financial well-being. They may find it challenging to assertively decline financial demands or regulate their expenses, resulting in heightened financial strain and distress.
  • Emotional regulation: Individuals with low self-esteem or a history of trauma may struggle with emotional regulation, leading to intense emotional responses to financial stress or anxiety. This can lead to impulsive financial decisions or a distorted view of money.
  • Fear of loss: Trauma survivors may have a deep-seated fear of loss, which can manifest in their financial decisions. They may be overly attached to their money or possessions, leading to a distorted view of money and financial anxiety.
  • Difficulty with self-care: Individuals with low self-esteem or a history of trauma may struggle with self-care, including taking care of their physical and emotional needs. This can lead to financial decisions that prioritize others’ needs over their own, leading to financial stress and anxiety.
  • Lack of financial education: Trauma survivors may have a lack of financial education or guidance, leading to financial anxiety and a distorted view of money.
  • Individuals with a history of trauma or low self-esteem: Such people may encounter challenges with trust, which can extend to trusting themselves, others, or financial institutions. This difficulty may result in financial choices influenced by fear or mistrust, rather than logical decision-making.

Those with a history of financial difficulties

People with a history of financial difficulties may be more prone to money dysmorphia due to the following reasons:

  • Fear of financial instability: Individuals who have experienced financial difficulties in the past may be more anxious about their financial situation and more likely to develop a distorted view of money.
  • Trauma and stress: Financial difficulties can be a traumatic experience, leading to stress, anxiety, and feelings of shame or guilt. This trauma can lead to a distorted view of money and a fear of financial instability.
  • Lack of financial confidence: Individuals who have faced financial challenges, possibly due to past poor decisions, may experience a lack of confidence in their financial management capabilities. This can result in a skewed perception of money and a heightened fear of making further financial errors.
  • Fear of debt: Individuals who have struggled with debt may be more anxious about debt and more likely to develop a distorted view of money.
  • Fear of financial loss: People who have experienced financial loss, such as a job loss or a financial setback, may be more anxious about financial loss and more likely to develop a distorted view of money.
  • Difficulty with financial planning: Individuals who have struggled with financial difficulties may have difficulty planning for the future, leading to a distorted view of money and a fear of financial instability.
  • Fear of financial judgment: People who have struggled with financial difficulties may fear being judged by others for their financial situation, leading to a distorted view of money and a fear of financial instability.
  • Difficulty with financial decision-making: Individuals who have struggled with financial difficulties due to having made poor decisions in the past may have difficulty making financial decisions, leading to a distorted view of money and a fear of financial instability.
  • Fear of financial vulnerability: People who have struggled with financial difficulties may fear being vulnerable to financial exploitation or taking financial risks, leading to a distorted view of money and a fear of financial instability.
  • Difficulty with financial forgiveness: Individuals who have struggled with financial difficulties may have difficulty forgiving themselves for past financial mistakes, leading to a distorted view of money and a fear of financial instability.

It is crucial to acknowledge that money dysmorphia can serve as a symptom of deeper financial trauma or challenges. Engaging with professional support, such as therapy or financial counselling, offers an effective approach to addressing these underlying issues and cultivating a more positive relationship with finances.

you're richer than you think
you’re richer than you think

You’re Richer Than You Think: How money dysmorphia affects financial habits

Overspending and impulse buying

Excessive spending and impulsive purchasing are prevalent outcomes of financial dysmorphia. The subsequent delineation illustrates how financial dysmorphia may precipitate increased expenditure and impulsive buying behaviour:

Overspending:

  • Compensatory spending: Individuals with money dysmorphia may overspend as a way to compensate for perceived financial shortcomings or to alleviate feelings of financial anxiety.
  • Emotional spending: A phenomenon that involves individuals turning to shopping as a coping mechanism for managing negative emotions like stress, anxiety, or boredom.
  • Keeping up appearances: Money dysmorphia can lead to a desire to keep up appearances, which can result in overspending on luxuries or status symbols.
  • Fear of financial loss: Individuals with money dysmorphia may overspend as a way to avoid feelings of financial loss or to maintain a sense of financial security.
  • Lack of financial boundaries: Money dysmorphia can lead to a lack of financial boundaries, making it difficult for individuals to say no to financial requests or to prioritize their own financial needs.

Impulse buying:

  • Emotional triggers: Money dysmorphia can lead to emotional triggers, such as stress, anxiety, or boredom, which can cause individuals to make impulsive financial decisions.
  • Lack of self-control: Individuals with money dysmorphia may struggle with self-control, leading to impulsive buying decisions.
  • Fear of missing out (FOMO): Money dysmorphia can lead to FOMO, causing individuals to make impulsive buying decisions to avoid feeling left out or to keep up with others.
  • Inadequate financial planning: The presence of money dysmorphia may result in a deficiency in financial planning, creating challenges for individuals in effectively prioritizing their financial objectives or making well-informed financial choices.

Hoarding and fear of spending

Hoarding and fear of spending are common consequences of money dysmorphia. Here are some ways in which money dysmorphia can lead to hoarding and fear of spending:

Hoarding:

  • Fear of financial loss: Individuals with money dysmorphia may hoard money or resources as a way to avoid feelings of financial loss or to maintain a sense of financial security.
  • Fear of scarcity: Hoarding can be a response to a perceived scarcity of resources, leading individuals to accumulate and hoard as a way to ensure their financial survival.
  • Emotional attachment: Money dysmorphia can lead to an emotional attachment to money or resources, making it difficult for individuals to part with them.
  • Fear of financial vulnerability: Hoarding can be a way to avoid feelings of financial vulnerability, as individuals may feel that by accumulating and hoarding, they are protecting themselves from financial uncertainty.
  • Lack of financial planning: Hoarding can be a result of a lack of financial planning, as individuals may not have a clear understanding of their financial needs or goals.

Fear of spending:

  • Fear of financial loss: Individuals with money dysmorphia may fear spending as a way to avoid feelings of financial loss or to maintain a sense of financial security.
  • Fear of financial vulnerability: Fear of spending can be a way to avoid feelings of financial vulnerability, as individuals may feel that by not spending, they are protecting themselves from financial uncertainty.
  • Fear of debt: Fear of spending can be a result of a fear of debt, as individuals may feel that by not spending, they are avoiding debt and financial obligations.
  • Fear of financial judgment: Fear of spending can be a result of a fear of financial judgment, as individuals may feel that by not spending, they are avoiding criticism or judgment from others.
  • Lack of financial confidence: Fear of spending can be a result of a lack of financial confidence, as individuals may feel that they are not financially prepared or capable of making financial decisions.

Constant comparison and dissatisfaction

Money dysmorphia can lead to constant comparison and dissatisfaction in several ways:

  • Unrealistic expectations: Money dysmorphia can create unrealistic expectations about what one should have or be able to afford. This can lead to constant comparison with others who seem to have more or better things.
  • Focus on material possessions: Money dysmorphia can lead to a focus on material possessions as a measure of financial stability or happiness. This can lead to constant comparison with others who have more or better possessions.
  • Fear of missing out (FOMO): Money dysmorphia can create a sense of FOMO, where one feels like they are missing out on experiences or opportunities because they don’t have enough money.
  • Perfectionism: Money dysmorphia can lead to perfectionism, where one feels like they need to have the perfect job, the perfect partner, the perfect home, etc. This can lead to constant comparison with others who seem to have it all together.
  • Lack of self-acceptance: Money dysmorphia can lead to a lack of self-acceptance, where one feels like they are not good enough or worthy of happiness because of their financial situation.
  • Comparison to others’ highlight reels: Social media can create a false sense of reality, where one compares their life to the highlight reels of others. This can lead to constant dissatisfaction and comparison. Fear of being judged: Money dysmorphia can create a fear of being judged by others for one’s financial situation. This can lead to constant comparison and dissatisfaction.
  • Unrealistic standards: Money dysmorphia can create unrealistic standards for oneself and others. This can lead to constant comparison and dissatisfaction.
  • Lack of gratitude: Money dysmorphia can lead to a lack of gratitude for what one already has. This can lead to constant comparison and dissatisfaction.
  • Constant striving: Money dysmorphia can create a constant sense of striving for more, which can lead to constant comparison and dissatisfaction.

You’re Richer Than You Think: Strategies to Overcome Money Dysmorphia

Navigating the intricacies of money dysmorphia and its implications on financial wellness underscores the importance of establishing clear financial objectives. Setting tangible goals and monitoring their progress serves as a foundational element in regaining a sense of agency in managing one’s finances. This proactive strategy not only cultivates empowerment but also nurtures a positive rapport with money, facilitating a more informed understanding of one’s financial standing.

Here are some practical strategies that you can use to maintain a healthy relationship with money and your financial needs:

Build financial literacy

Financial literacy plays a vital role in addressing money-related challenges and fostering financial empowerment. Elevating one’s understanding of personal finance, seeking guidance from financial experts, and engaging in constructive dialogues about financial matters are fundamental steps in establishing a strong financial footing. By arming oneself with the requisite knowledge and skills, individuals can make well-informed decisions and confidently navigate the financial landscape.

Financial literacy and planning are indispensable components of effective money management and ensuring a secure financial future. In the contemporary, fast-paced environment where social media can influence our perceptions of wealth and success, it is imperative to educate ourselves on personal finance and cultivate sound financial practices for sustained prosperity.

Self-education on personal finance serves as a potent tool in addressing money-related anxieties, including money dysmorphia, which refers to the irrational distress individuals experience about their financial standing, often exacerbated by comparisons with others.

Seek professional help

In the face of societal pressures and financial uncertainties, it is essential to seek guidance from reliable sources. Engaging in candid discussions regarding financial worries with trusted individuals such as family, friends, or financial experts can provide valuable advice and direction. Building a supportive network can empower individuals to confront financial obstacles with resilience and determination.

Consulting with financial planners and advisors can offer specialized insights and expertise for navigating the intricacies of personal finance. These professionals can offer a realistic assessment of one’s financial standing, identify areas for enhancement, and devise a roadmap toward financial security. By leveraging their proficiency and experience, informed decisions can be made to bolster long-term financial well-being.

Create a monthly budget

A critical aspect of addressing financial challenges such as money dysmorphia involves establishing clear financial objectives that align with our fundamental values. This process commences with a thorough assessment of our monthly income and expenses, followed by the development of a financial strategy that ensures our expenditures do not exceed our earnings.

By articulating our financial aspirations in harmony with our core principles, we can construct a comprehensive framework that informs our financial decisions and behaviours. Whether our objectives involve saving for a significant trip, purchasing a property, or investing in further education, linking our financial goals with our values instills a sense of purpose and direction.

Effective budgeting relies on the diligent tracking of income and expenses. By monitoring the sources of our monthly income, as well as our expenditures and their destinations, we can gain valuable insights into our spending patterns and identify opportunities to reduce expenses or enhance savings. Formulating and adhering to a budget fosters accountability and empowers us to progress toward our financial objectives, whether they are short-term initiatives like saving for a vacation or longer-term goals.

you're richer than you think
you’re richer than you think

You’re Richer Than You Think: Conclusion

Money dysmorphia, influenced by social media comparisons, leads to financial stress. Overcoming it requires setting clear goals, seeking professional guidance, and cultivating healthy financial habits.

I hope you enjoyed this you’re richer than you think Brandon’s Blog. Do you or your company have too much debt? Are you or your company in need of financial restructuring? The financial restructuring process is complex. The Ira Smith Team understands how to do a complex restructuring. However, more importantly, we understand the needs of the entrepreneur or someone with too much personal debt.

You are worried because you are facing significant financial challenges. It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief freedom.

The stress placed upon you is huge. We understand your pain points. We look at your entire situation and devise a strategy that is as unique as you and your problems; financial and emotional. The way we take the load off of your shoulders and devise a plan, we know that we can help you.

We know that people facing financial problems need a realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team.

That is why we can develop a restructuring process as unique as the financial problems and pain you are facing. If any of this sounds familiar to you and you are serious about finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.

Call us now for a free consultation. We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

The information provided in this Brandon’s Blog is intended for educational purposes only. It is not intended to constitute legal, financial, or professional advice. Readers are encouraged to seek professional advice regarding their specific situations. The content of this Brandon’s Blog should not be relied upon as a substitute for professional guidance or consultation. The author, Ira Smith Trustee & Receiver Inc. as well as any contributors to this Brandon’s Blog, do not assume any liability for any loss or damage resulting from reliance on the information provided herein.

you're richer than you think
you’re richer than you think

Categories
Brandon Blog Post

THE HIDDEN EFFECTS OF FINANCIAL STRESS: WHAT YOU NEED TO KNOW

financial stress
finacial stress

Definition of financial stress

Are you feeling weighed down by money worries? Is your quality of life disintegrating before your very eyes? You’re not alone. Financial stress is a common problem that affects many people. It’s defined as a feeling of unease or worry caused by the lack of financial resources or the belief that you don’t have enough money. It can be caused by both happy and troubling events. Whether it’s an unexpected expense, a lost job, a major purchase such as a home or just the everyday stress of trying to make ends meet, it can take a toll on your well-being.

In this Brandon’s Blog, I will discuss financial stress and how a person can take control of it. I will give actionable tips to relieve stress and improve your financial well-being. Don’t let money worries overwhelm you – take the steps needed to reduce your financial stress.

Understanding the causes of financial stress

Do you know someone dealing with financial stress? You’re not the only one! Money stress from financial concerns can be a major source of stress. The most common causes of financial stress are:

  • trying to cover all your expenses;
  • feeling overwhelmed by debt;
  • having no savings;
  • housing insecurity;
  • unexpected costs;we
  • living pay cheque to pay cheque; and
  • an ever-growing debt load.

It can feel like you’re stuck in a never-ending cycle. But don’t worry – there’s always a way to get back on track! Taking the right steps can make a huge difference.

financial stress

Financial stress and its impacts

Consequences of financial stress on your physical and mental well-being

The burden of financial stress can take a serious toll on your well-being emotionally and physically. Those dealing with money worries are twice as likely to suffer from poor health and four times as likely to experience sleeping troubles, aches, withdrawal from social life and social integration and more. Furthermore, financial stress can cause depression and anxiety symptoms and can be a major contributor to heart issues. Not to mention, it can also cause fractures in relationships and make it increasingly difficult to stay on top of finances and other obligations.F

How it can affect your work

Financial pressures can take a toll on any individual, and that strain can seep into their work lives. Struggling to make ends meet can result in a drop in job performance, more days off, or worse – a potential job loss. Additionally, it can bring about emotional and physical health issues, reducing productivity and contentment with their work. In addition, it can generate a decrease in morale, job satisfaction and a greater sense of unease.

Financial tensions leading to emotional tension can significantly negatively affect an employee’s job performance. It is essential that employers are aware of the impact this can have on their staff, offering resources to manage their financial situation, and minimize the effect of financial stress in the workplace.

The outcomes of financial stress on human wellbeing

Financial challenges leading to financial stress can be a soul-sucking burden on physical and personal health and cause mental health issues, manifesting in everything from physical symptoms, hypertension (high blood pressure), heart disease and depression to strained relationships and unhealthy sleep and eating patterns. It’s an environment of negativity that can be hard to escape. But there’s hope! Acknowledge the stress and make a plan to overcome it. Start by budgeting, tracking spending, setting up an emergency fund, and if possible, looking for ways to increase income. Life can be so much brighter when you take control of your finances.

Prevalence of Financial Stress

Financial stress is a growing problem in North America, with millions struggling with financial issues to make ends meet and cover essential expenses. The burden of financial stress is even larger when considering its ripple effect on families, relationships, and overall well-being, not just your financial health.

As already stated above, it is well documented in studies that financial stress can negatively impact mental health and lead to physical health problems. Financial stress is pervasive across all socihealtho-economic levels and particularly burdens minority and low-income populations.

Financial stress can be a significant issue for everyone regardless of their financial standing, educational background, or occupation. Financial stress will most certainly lead to greater financial dilemmas if not managed properly.

Many people don’t realize that anyone can experience financial stress at any point in their lives. It is not something that only affects those who have little to no money or cannot balance a chequebook. Everyone should understand that financial stress can upspring from unexpected costs, inadequate savings, poor budgeting strategies, or job loss. Financial stress does not discriminate amongst people who may find themselves in a difficult financial situation due to illness, divorce, or other unplanned circumstances. It is not your fault.

Therefore, it is important to recognize the above-noted signs and symptoms of financial stress and understand how to manage it.

financial stress

Coping strategies for financial stress

Knowing Your Money

It’s time to take charge of your finances! Having a grip on your money and a comprehensive understanding of what’s going in and out of your accounts every month is vital for making savvy financial choices. Crafting a budget to stay on top of your source of income is a great way to use your funds in the most effective way possible. Additionally, it’s a smart move to look into ways to reduce your monthly financial expenses to ensure you have a financial buffer for those unexpected expenditures and can build up your savings.

Taking stock of your finances

Assessing your financial situation is an essential step to gaining control of your finances and improving your financial well-being. To do this, you should create an itemized list or record of your financial resources and debts, specifying the interest rate and outstanding balance.

Having this knowledge can give you a better understanding of your finances and enable you to make more informed decisions. Taking the time to reflect on your financial circumstances can be the first step toward financial stability.

Talking to someone

Financial stress can be overwhelming and it is not something that should be borne alone. Seeking out support from trusted sources can make a world of difference in managing stress and making progress toward finding a resolution. Engaging in dialogue with another person can be beneficial when addressing financial anxiety.

Whether it is a family member, friend, or support group, the act of just talking to someone can help lessen the burden of financial stress. It can be intimidating to open up about financial worries, but talking to someone can be an important source of support and guidance.

Overcoming financial stress by engaging in self-care

This third strategy of self-care as a means of dealing with financial stress deserves its own section. Common methods of self-care which deal mainly with both the physical and the mental stress aspects are:

Exercise

Physical activity is a great way to de-stress and look after your well-being! High-intensity exercises like running, elliptical, and cycling are known to lessen overall stress levels, regulate your mood, enhance your sleeping pattern, and bolster your self-confidence. Even just a short five minutes of cardio can have a calming effect on your stress levels.

Diet

It’s vital to maintain a wholesome diet to keep your well-being in check, and it can even help reduce worry. Nosh on nourishing meals, drink plenty of fluids and dodge caffeine and sugar to elevate your spirits, energy, and focus – all of which can assist you in tackling financial stress.

Relaxation Techniques

Using relaxation methods like deep breathing exercises, meditation, or yoga can be a great way to combat stress and promote mental health. Implementing just a few minutes of relaxation practices daily can help you better tackle financial stressors and improve your overall health and well-being.

Time for yourself

Finding time for yourself can be a vital part of managing financial stress. Taking a break from your daily responsibilities can help to restore and rejuvenate your mental and emotional energy.

Consider activities such as reading, taking a stroll, or napping as a means of giving yourself a much-needed break. Rest and relaxation can be important parts of maintaining your financial wellness.

financial stress

Seeking professional mental health Help

It is recommended to seek professional help for mental health issues as mental health professionals can provide guidance in overcoming challenges, changing negative behaviours, understanding and healing from past trauma, setting goals and building self-confidence, all with the aim of improving your quality of life. There are many resources and services available to those seeking help for themselves, friends or family members. In the case of suicidal symptoms, professional help is essential and should be sought immediately.

Final Thoughts on Financial Stress

I hope you enjoyed this financial stress Brandon’s Blog. I hope that it has helped you to discover the impact that financial stress can have on a person’s mental and physical health and has provided some tips on how to prevent and overcome the negative effects of stress.

You may also wish to read my February 28, 2022, Brandon’s Blog, WHAT PERCENTAGE OF ILLNESSES ARE DIRECTLY OR INDIRECTLY CAUSED BY FINANCIAL STRESS? FINANCIAL STRESS IS THE MOST COMMON OF ALL TRIGGERS.

Revenue and cash flow shortages are critical issues facing entrepreneurs and their companies and businesses. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind. Coming out of the pandemic, we are also now worried about the economic effects of inflation and a potential recession.

The Ira Smith Team understands these concerns. More significantly, we know the requirements of the business owner or the individual that has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

It is not your fault you can’t fix this problem on your own. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy. We can get you debt relief now.

We have helped many entrepreneurs and their insolvent companies who thought that consulting with a trustee and receiver meant their company would go bankrupt. On the contrary. We helped turn their companies around through financial restructuring.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

We understand that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.

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DAMAGES FOR MENTAL DISTRESS CANADA: DAYLAN HEIDEL ORDERED TO PAY $160K TO REVENGE PORN VICTIM

damages for mental distress
damages for mental distress canada

Damages for mental distress in Canada: What are psychological injuries?

In Canada, there are a number of different options available to those who have suffered from psychological injuries. These include a civil lawsuit for damages for mental distress, which can help to cover the costs of treatment and other related expenses.

There are a variety of factors that will be considered when determining the available damages. These include the severity of the injuries, the impact on the victim’s life, and if this type of bodily harm was inflicted on purpose.

Earlier this year, a Saskatchewan court ordered a man to pay $160,000 in damages to a victim of revenge pornography abusive conduct. This is a significant decision that could have far-reaching implications for other victims of this heinous crime. The man’s lawyer said that his client will never be able to afford to pay off this claim and may have to file for personal bankruptcy in order to get released from this debt. This really piqued my interest.

In this Brandon’s Blog, I describe the decision of damages for mental distress in Canada awarded against the man, Daylan Heidel.

Damages for mental distress in Canada: Can you sue for emotional damage or mental suffering in Canada?

Mental impairments or mental distress describes the suffering caused by an accident, injury, or any kind of distressing experience. People who have experienced a traumatic event, including those who may have witnessed the event and also family members of the sufferers, can file a civil legal action claiming mental distress or psychological suffering. It affects all of these people’s quality of life and produces catastrophic injuries to a person’s psyche.

Usually, in our society, psychological distress, mental health issues or mental suffering are typically minimized or even considered inconsequential health conditions contrasted to physical harm. The truth is that medical evidence has shown that psychological injuries like emotional distress are just as real an injury as physical ones. Unlike a physical injury, it can last for a long period of time and could lead to long-term emotional damage. This is often ignored. The victim could have various symptoms from the traumatic experience. These include post-traumatic stress disorder or other symptoms, including sleep disorders, huge mood swings and loss of dignity long after the stressful event.

Nevertheless, you may be able to start a lawsuit against the party that is the source of your emotional distress. You might also be qualified for payment according to your legal rights. If you have the ability to collect on the award, that cash can go for spending on the treatment that you need.

Canadian courts are showing that they are willing to give awards for damages for mental distress in Canada.

damages for mental distress
damages for mental distress canada

Damages for mental distress in Canada: Mental distress damages awarded in the Saskatchewan court case

Daylan Heidel was scorned by his ex-lover. He thought that he would get even by uploading nude pics and videos of her to various internet sites. He didn’t just post her intimate images without her consent, but also published her name and personal details. The Judge awarded her $160,000 in general and aggravated damages for mental distress in Canada.

Heidel had already served some jail time a while back. He was convicted of distributing images of six women without their consent. One of them got a lawyer and sued Heidel for violating her privacy. A video of her has 1.5 million views. So every time somebody accesses that material, it’s another violation of her. She was able to sue for those continuing violations.

Since the federal government criminalized the non-consensual distribution of nude pics and videos in 2015, several provinces, including Saskatchewan, have amended privacy laws to make it easier for victims to take civil action and sue perpetrators for compensation. This is a form of sexual abuse. Although there have been only a few cases so far, this shows that the law is working and that victims now have a way to stand up for their rights, which can have a huge psychological benefit for the aggrieved party.

A Court of King’s Bench for Saskatchewan Judge has found that Heidel’s actions were malicious, flagrant, and intentionally inflicted mental distress. This is a significant ruling, as civil suits for an award for damages for mental distress in Canada are still not common.

This is the largest sum awarded thus far for damages for mental distress in Canada arising from the distribution of intimate photos without the person’s consent. This decision is good news for supporters of victims of sexual violence. In our culture, we tend to put a price on things, and so this decision values the lives of sexual assault victims.

The defence lawyer for Heidel stated that his client may appeal the decision or file for bankruptcy, even though he accepts responsibility for his actions and regrets them deeply. The lawyers went on to say that this case should serve as a warning that sharing intimate images without consent can have severe consequences.

Heidel’s defence lawyer’s lack of appreciation for the nuances of Canadian bankruptcy law is evident. It is obvious that he is not an experienced lawyer for bankruptcy and insolvency matters.

Damages for mental distress in Canada and bankruptcy

The defence lawyer for Heidel believes that his client can file for bankruptcy and avoid liability for the court award. However, given the wording the Judge used, this is incorrect. As stated in numerous previous blogs on personal bankruptcy, it is the discharge from bankruptcy that eliminates the person’s debts.

However, according to section 178(1) of the Bankruptcy and Insolvency Act (Canada) (BIA), there is a class of debts that are not discharged when the bankrupt receives their absolute discharge from bankruptcy.

Specifically, part of section 178 (1) states:

“178 (1) An order of discharge does not release the bankrupt from

(a) any fine, penalty, restitution order or other order similar in nature to a fine, penalty or restitution order, imposed by a court in respect of an offence, or any debt arising out of a recognizance or bail;

(a.1) any award of damages by a court in civil proceedings in respect of

(i) bodily harm intentionally inflicted, or sexual assault, …”

The court found that the defendant’s actions constituted intentional infliction of mental distress. The plaintiff was able to demonstrate that the defendant’s conduct was extreme and outrageous, intentionally or recklessly causing the plaintiff emotional distress. The plaintiff also established that she incurred a visible and demonstrable injury as a result of the defendant’s actions. Courts in Canada have held that mental distress intentionally inflicted is bodily harm, a personal injury claim.

Further, the Judge having chosen the words “malicious, flagrant, and intentionally inflicted mental distress” in awarding the damages for mental distress in Canada in this sexual assault case, has recognized the defendant’s outrageous conduct and puts the award squarely within the scope of BIA section 178(1)(a.1)(i).

That means that Heidel will never be able to eliminate this debt with a discharge from bankruptcy if he ever chooses to file. This debt will follow him forever.

damages for mental distress
damages for mental distress canada

Damages for mental distress in Canada: Is there a need to review your situation?

I hope you enjoyed the damages for mental distress in Canada Brandon’s Blog.

Income and cash flow shortages are critical issues facing Canadians, be they employees, entrepreneurs or companies and businesses. Are you now worried about just how you or your business are going to survive? Those concerns are obviously on your mind. Coming out of the pandemic, we are now worried about its economic effects of inflation and a potential recession.

The Ira Smith Team understands these concerns. More significantly, we know the requirements of the business owner or the individual that has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

It is not your fault you can’t fix this problem on your own. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy. We can get you debt relief now.

We have helped many entrepreneurs and their insolvent companies who thought that consulting with a trustee and receiver meant their company would go bankrupt. On the contrary. We helped turn their companies around through financial restructuring.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

We understand that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.

damages for mental distress
damages for mental distress canada
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Brandon Blog Post

WHAT PERCENTAGE OF ILLNESSES ARE DIRECTLY OR INDIRECTLY CAUSED BY FINANCIAL STRESS? FINANCIAL STRESS IS THE MOST COMMON OF ALL TRIGGERS

what percentage of illnesses are directly or indirectly caused by financial stress

As the COVID-19 pandemic continues, we hope that you, your family, and your friends are safe, healthy, and secure. Ira Smith Trustee & Receiver Inc. is fully operational, and both Ira and Brandon Smith are readily available for phone or video consultations.

What percentage of illnesses are directly or indirectly caused by financial stress: Financial stress and its impacts

Canadians are more stressed by money (38%) than by their personal health (25%), work (21%), and relationships (16%). The biggest source of chronic stress for a majority of Canadians is stress about money, according to a recent study. This study, and others, do not quantify what percentage of illnesses are directly or indirectly caused by financial stress. However, as you will read below about the financial stress research, financial stress statistics shows that it is the number one cause of stress in the lives of many Canadians.

Money, health, relationships, and work are deeply intertwined; stress in any one of them can exacerbate issues in others. These facts have led me to wonder what percentage of illnesses are directly or indirectly caused by financial stress?

Financial stress is a huge issue for a lot of people. There are a lot of people who are financially stressed, and it has a serious effect on their lives. It causes them to make poor decisions, not be able to invest in their future, and many other problems. The finance industry is a very fast-paced industry, and people always want to make a lot of money in a short amount of time. That is why financial stress is so large in today’s society.

Stress related to money is one of the leading causes of health issues, both physical and mental including anxiety disorders and mood disorder (and has been for a very long time). You can experience very harmful changes to your immune system and digestive system when you are stressed out. Stress releases cortisol, a hormone that is released when we are under stress. The stress hormone cortisol suppresses the immune system and makes it easier for diseases like cancer to spread. Furthermore, study results have shown that when a person is under financial stress, the body releases stress hormones which can be just as harmful to your health as the financial stress itself.

People today are seeking to protect themselves from the dangers posed by financial uncertainty and to avoid the risks they face as a result. Financial stress has been on the rise for decades. This has a direct correlation with the rise in financial stress-related illnesses. As financial stress increases, the strain on mental and physical health increases as well. This ultimately leads to financial stress-related illnesses.

Financial stress is the commonest of all triggers. But, what exactly is financial stress? This Brandon Blog will explore the role financial stress plays in the development of many health problems, from tension headaches to cancer. We will try to answer the following question: what percentage of illnesses are directly or indirectly caused by financial stress?

What percentage of illnesses are directly or indirectly caused by financial stress: Impact of financial stress on your physical and mental health and mental disorders

What is financial stress and what causes financial stress? In general, stress is defined as a process in which environmental demands strain an organism’s adaptive capacity, resulting in both psychological demands as well as the occurrence of illnesses. There are three kinds of stress; environmental stress, psychological stress, and biological stress.

Several factors influence susceptibility to stress, including genetic vulnerability, coping style, personality type, and social support. Stress increases catecholamine levels and suppressor T cells, which suppress the immune system.

Research has shown that short-term stress boosts the immune system, but chronic stress can have a significant effect on the immune system that manifests itself as illness. Chronic stress can also cause plaque buildup in the arteries (atherosclerosis), particularly when combined with a high-fat diet and sedentary lifestyle.

The strongest link between stress and psychiatric illness is found between neuroses, depression, and schizophrenia. Researchers have also discovered a link between stress, tumour development, and suppression of natural killer (NK) cells, which help prevent metastasis and destroy small metastases.

Both external and internal factors are involved in asthma; however, psychological stressors have the greatest acute effect on the internal factor.

Money-related stress may cause anxiety, fear, sadness, anger, fatigue, and even the common cold. This is true. Often, we underestimate how much stress money, or the lack of it, can cause.

Examples of physical and mental disorders caused by signs of financial stress include:

  • poor general physical health twice as often as those who are not under financial stress;
  • there is a fourfold increase in sleep problems, headaches, and other illnesses;
  • interpersonal relationships are more likely to be strained; and
  • other health problems include obesity, high blood pressure, and heart disease.

    what percentage of illnesses are directly or indirectly caused by financial stress
    what percentage of illnesses are directly or indirectly caused by financial stress

What percentage of illnesses are directly or indirectly caused by financial stress: Impact of financial stress on your work

You may experience a significant amount of physical and mental health stress if you are under a lot of financial stress in life. Your mental health can also be affected, as can your work. As an example, if you are stressed out about money, you will be less productive and perform poorly at work.

In almost half of the cases studied, stress related to personal finances affected a person’s work performance. It is normal to feel stressed to some extent, but prolonged exposure to high levels of stress has been associated with mental disorders such as depression and anxiety. A lack of workplace engagement and distraction are also common symptoms of chronic financial stress.

Over 500,000 Canadians miss work each week, and 30% of disability claims and 70% of disability costs are attributed to mental illness. And those are just the reported impacts.

What percentage of illnesses are directly or indirectly caused by financial stress: Financial stress & mental health & physical health

A well-documented fact is that poor financial health causing acute stress can negatively affect mental health and contribute to depression and other mood disorders. According to an article published in the journal Social Science & Medicine in August 2013, being economically insecure physically hurts. Migraines, cardiovascular disease, insomnia, and absences from work have been linked to financial stress. The findings show that having healthy finances can directly benefit your physical and mental health. Financial stress not only affects a person’s ability to function and avoid negative habits, but it also affects his or her ability to think clearly.

Financial stress can be a real problem, especially when it’s linked to mental illness, stress, and anxiety. When we’re feeling depressed, anxious, stressed out or in a panic, we’re more likely to eat badly and skip our appointments. That’s because worrying about money takes up a lot of our time and energy. And when we’re stressed out, we tend to eat more junk foods and less nutritious foods.

what percentage of illnesses are directly or indirectly caused by financial stress
what percentage of illnesses are directly or indirectly caused by financial stress

What percentage of illnesses are directly or indirectly caused by financial stress: The uncertainty of COVID

The Financial Stress Survey was conducted in May 2020 by Leger for FP Canada and shows that roughly the same number of Canadians still struggle with poor financial health, stress, and job instability despite the COVID-19 pandemic having added economic strain. Despite the financial stress, personal health concerns are becoming more important to Canadians. Finances are the biggest stressor, but personal health is becoming ever more important.

Despite the economic impacts of the COVID-19 pandemic, which brought the unemployment rate to an all-time high, the same number of Canadians (49%) are worried about bills and job instability. Four in ten Canadians believe that paying down or off debt would reduce financial stress, and another 36 percent believe that saving more would ease financial difficulties. Furthermore, 25 percent cite personal health as what stresses them out the most, compared to 22 percent and 19 percent in 2018 ( financial planning standards council, “omni report: financial stress,” 2018) and 2014, respectively.

Financial stress is significantly more common among younger Canadians (35 vs. 35+) and those without a financial planner (vs. those who use a financial planner). Those who believe the COVID-19 pandemic has impacted their financial stress are twice as likely to name money as the main stressor in their lives.

According to the survey, 19.5% of Canadians suffered from moderate-to-severe anxiety, 26.6% have consumed alcohol binge-style, and 21% feel lonely. These feelings lead to unresolved chronic stress. In unresolved chronic stress, the body’s immune system is suppressed, resulting in illness. If regular stress persists and the body is unable to cope, it is likely to lead to a breakdown in its infrastructure.

What percentage of illnesses are directly or indirectly caused by financial stress: Financial planning is linked to lower stress

Using the same FP Canada study, we can try to figure out how to reduce financial stress. Knowledge coupled with action seems to be the best defense against financial stress. Researchers found that:

  • Almost 80% of those surveyed and reported lower financial stress have taken some steps to reduce their financial stress. Those under age 35 and those experiencing financial stress due to the COVID-19 pandemic are significantly more likely to have done so. 35% of respondents track their expenses, 34% paid down debt, and 32% increased their savings. A greater percentage of people who have used the services of a financial professional (vs. those who did not) say they have built an emergency fund, gotten professional advice, and built a financial plan.
  • In addition, almost 80% of the FP Canada survey participants who believed debt repayment, saving, and budgeting would reduce financial stress actually took action. Yet only 21% of respondents have taken steps to build an emergency fund, although 32% think that having one can reduce financial strain. Despite the fact that only 19% of people believed this could help them, 35% of them actually did it to reduce their financial stress.

These simple steps are ones that I have been advocating for anyone experiencing money worries and financial stress, pandemic, or no pandemic. Understanding where you are at is the first step in building a proper financial plan to get to where you want to be.

It is the same if you recognize that you have too much debt and no amount of cost-cutting, budgeting, or saving will get rid of it. A professional who specializes in assisting people and companies in safely eliminating their debt can be of great help to you. Insolvency trustees are such professionals.

what percentage of illnesses are directly or indirectly caused by financial stress
what percentage of illnesses are directly or indirectly caused by financial stress

What percentage of illnesses are directly or indirectly caused by financial stress: Money remains the number one cause of stress

Money remains the number one cause of stressful situations. Chronic ongoing stress can cause a high percentage of illnesses either directly or indirectly.

I hope you found this what percentage of illnesses are directly or indirectly caused by financial stress Brandon Blog informative. Although nothing is guaranteed, managing your debt in a way that will allow you or your company to be able to afford it, will lead to your financial success. It will also give you the best shot at having a financially stress-free life.

Are you or your company in financial distress and a debt crisis? Are you embroiled in costly litigation or a crushing debt load and need a time out in order to restructure? Do you not have adequate funds to pay your financial obligations as they come due? Are your credit cards maxed out? Are you worried about what will happen to you? Do you need to search out easy-to-understand debt solutions and realistic ones for your family debt problems? Is your company in financial hot water?

Call the Ira Smith Team today. We have decades and generations of experience assisting people looking for life-changing debt solutions through a debt settlement plan and AVOID the bankruptcy process.

As licensed insolvency professionals, we are the only people accredited, acknowledged and supervised by the federal government to provide insolvency advice and to implement approaches to help you remain out of personal bankruptcy while eliminating your debts. A consumer proposal is a Government of Canada-approved debt settlement plan to do that. It is an alternative to bankruptcy. We will help you decide on what is best for you between a consumer proposal vs bankruptcy.

Call the Ira Smith Team today so you can eliminate the stress, anxiety, and pain from your life that your financial problems have caused. With the one-of-a-kind roadmap, we develop just for you, we will immediately return you right into a healthy balanced problem-free life.

You can have a no-cost analysis so we can help you fix your troubles.

Call the Ira Smith Team today. This will allow you to go back to a new healthy and balanced life, Starting Over Starting Now.

As the COVID-19 pandemic continues, we hope that you, your family, and your friends are safe, healthy, and secure. Ira Smith Trustee & Receiver Inc. is fully operational, and both Ira and Brandon Smith are readily available for phone or video consultations.

what percentage of illnesses are directly or indirectly caused by financial stress
what percentage of illnesses are directly or indirectly caused by financial stress
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FILING FOR BANKRUPTCY IN CANADA: INTENSE MENTAL HEALTH & DISCHARGED BANKRUPTCY

anthony bourdain

Filing for bankruptcy in Canada: Introduction

With filing for bankruptcy in Canada, if a person’s discharge is opposed, there must be a court hearing. At the hearing, the court will decide if the discharge will occur. Once the discharge is granted, the person will be relieved of his or her debts as of the day he or she filed for bankruptcy (with certain exceptions) and will be free to start rebuilding his or her credit rating and financial future.

Filing for bankruptcy in Canada: Court of Appeal for Ontario decision

The purpose of my blog is to describe a March 2018 Court of Appeal for Ontario decision, Kuczera (Re), 2018 ONCA 322 (CanLII). This is an important decision in how mental health issues intersect with the bankruptcy discharge process.

Mr. Kuczera’s financial problems began with a costly and hotly contested divorce proceedings. With his debts mounting and the divorce proceedings continuing, Mr. Kuczera filed a consumer proposal. As a result of the ongoing family law battle, his mental health deteriorated and he became clinically depressed. He was no longer able to cope with life and was unable to work.

Filing for bankruptcy in Canada: Defaulting on the consumer proposal

Up to this point, he was making the consumer proposal payments. His default in the consumer proposal caused it to be annulled. The consumer proposal was his attempt to get out of bankruptcy, as he first used filing for bankruptcy in Canada with an assignment in bankruptcy first. So, Mr. Kuczera now remained an undischarged bankrupt.

filing for bankruptcy in canada

Filing for bankruptcy in Canada: The bankruptcy discharge hearing

Mr. Kuczera represented himself in Bankruptcy Court on his discharge hearing. He tried to show the Registrar in Bankruptcy that he tried his best to live up to all of his bankruptcy obligations to the licensed insolvency trustee, but due to his mental health issues, he could not. Unfortunately, his evidence was only a basic report from his psychiatrist.

The Registrar did not grant an absolute discharge. Rather, based on the evidence in front of her, she ordered that a discharge be granted only after payment of the outstanding balance under the consumer proposal, and one other minor condition. The Registrar went on to state that he was held responsible for his situation.

Filing for bankruptcy in Canada: Appeal of the Registrar’s decision

Mr. Kuczera was able to hire a lawyer to appeal the Registrar’s decision to a Judge sitting in Bankruptcy Court. The Judge refused to consider fresh evidence in the form of more descriptive psychiatric reports supporting the summary findings presented at the original discharge hearing. The Judge dismissed Mr. Kuczera’s appeal.

Filing for bankruptcy in Canada: Appeal of the Judge’s decision

He now had his lawyer appeal the Judge’s decision to the Court of Appeal for Ontario. The Court of Appeal disagreed with the approach of the appeal judge. The Court of Appeal could not understand why the appeal judge would not allow the more detailed reports from Mr. Kuczera’s treating psychiatrist. These new detailed reports were further to the summary report provided to the Registrar.

The Court of Appeal went on to say that neither the Registrar nor the appeal judge gave proper weight to the psychiatric evidence. It also went on to say that a discharge condition requiring Mr. Kuczera to pay the payments due under the consumer proposal would not be “difficult”, as described by the Registrar. Rather, the Court of Appeal said that it would be “crushing”.

filing for bankruptcy in canada

Filing for bankruptcy in Canada: What the Court of Appeal found

So the Court of Appeal found that:

  • the appeal judge erred by not considering the fresh psychiatric report evidence;
  • The need for the bankrupt to pay the balance of the consumer proposal payments would be crushing; and
  • The fresh psychiatric evidence was compelling.

Given the length of time that Mr. Kuczera remained in bankruptcy, and considering the above factors, the three-judge panel in the Court of Appeal for Ontario unanimously agreed that Mr. Kuczera gets his absolute discharge from bankruptcy.

Filing for bankruptcy in Canada: Mental health issues

Mental health issues are at the forefront of the news. Most recently, both Kate Spade and Anthony Bourdain committed suicide because of mental health issues. I believe that as society recognizes mental health issues as a legitimate illness or disability, you will see it influencing Bankruptcy Court decisions. That certainly was the case for Mr. Kuczera.

Filing for bankruptcy in Canada: Debt after your bankruptcy discharge

After receiving your bankruptcy discharge, NOBODY can try to collect this debt again. Discharged debt cannot appear on your credit report as anything other than a zero balance. Sometimes collection agencies report a discharged debt to the credit bureaus, hoping you will pay off the debt and not correct the information with the credit bureaus. The debt will still incorrectly appear on your credit report.

Filing for bankruptcy in Canada: Discharged debt and your credit report


When discharged debt re-appears on your credit reports, it affects your credit score and can result in higher interest rates or credit denials. Sometimes debt collectors buy discharged debt, knowing they can’t collect on it, but hoping you don’t know that.

These debt collectors may tell you that the discharge doesn’t apply to them because they are not the original creditor. Don’t be fooled. Creditors who attempt to collect a discharged debt are violating a court order. The court can stop them, and they may even have to pay damages.

Discharged debt should not show on your credit report except as a zero balance – Monitor your credit report and be proactive. A discharged debt is not valid and is not collectible.

Filing for bankruptcy in Canada: Do you have too much debt?

I hope that you have found this information helpful. Bankruptcy is the last thing we try to do for a person in financial difficulty. If caught early enough, we can get involved in a debt settlement restructuring program for you.

The Ira Smith Team knows that you are worried because you are facing significant financial challenges. The stress placed upon you is enormous. We understand your pain points.

Contact the Ira Smith Team today. We know how to solve your financial challenges, remove your pain and put things back on a healthy path. Contact us today for your free consultation so that we can save your life, Starting Over Starting Now.filing for bankruptcy in canada

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