Recognizing long ago that excruciating debt underlies so many of the crises driving people to seek its help, Jewish Family Services (JFS) undertook to find a financial services professional who would volunteer to counsel members of the community in the most desperate financial straits. For the past decade, Mayer Diamond, a Montreal trustee, has been graciously giving of his time and professional expertise for this purpose. “When meeting credit card payments, or servicing a loan means you can’t afford groceries or your rent, you have a very serious problem that must be redressed,” he said in reference to the most extreme cases that he sees.

Diamond has proven to be indispensable to JFS, helping countless people to cope with the challenge of revamping how they manage their money, changing the lifestyle that was responsible for getting them into trouble, and perhaps going so far as to declare bankruptcy.

“My first task is to reassure the person that a financial set-back is no cause for shame and to emphasize that I’m only there to help them,” Diamond explained. “Contemplating bankruptcy is a very traumatic experience for some people, whose mentality is that they absolutely must pay their debts.”

In many instances, a solution short of bankruptcy can be devised. Diamond recalls the shop owner whose sales had gradually dwindled to the point where he was losing money on a daily basis. Reluctant to give up his life’s work, he continued to invest in what an objective outside observer could clearly see was a losing venture. Diamond’s role was, in essence, to do the math and show the man how a business that robbed him of the ability to pay for food, as opposed to feeding his family, was not serving his interests.
In this case, following several months of consultation and convincing, Diamond succeeded in mapping out a liquidation strategy that enabled the owner to dispose of his inventory without declaring bankruptcy. Freed from the albatross of a money-losing venture, he was able to re-evaluate his situation and find a job that put his financial house back in order.

Particularly among many whose self-esteem is inseparable from their jobs, there is a stigma attached to a financial setback which they cannot reconcile with their image of themselves. Bankruptcy is obviously the most extreme way out of a problem, but it is a vehicle that was created specifically so that people wouldn’t be irrecoverably suffocated by debt.

“The whole idea behind the Bankruptcy Act is to give people a second chance,” said Diamond. “It’s an opportunity to correct the practices or behaviour that got the person into trouble. Many don’t understand this. Often, the first question I get is, ‘Am I going to jail?’ Of course, they aren’t.”
For some who are brought to Diamond by JFS, easy access to personal credit is the root of their problems. People whose attitude is not that they have to avoid credit card debt, but need only meet minimum monthly payments are heading for disaster.

“It’s a warning sign when you have to rely on credit cards to pay for groceries,” he said.
Diamond gives a wake-up call to those with whom he consults. Unless they change their spending patterns, they won’t be able to get out of debt. If they do, however, they can learn from the experience and develop a healthier approach to money management. “I educate clients on how to avoid the traps they’ve fallen into,” he said. “Once I manage to get through to them, and show them the way out, they can avoid them in the future.”

 

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