S7 E06: Talking About Debt

So when I came to Canada, picked up on what I knew, requalified as a CPA, and worked for one of the three large practices. And back in the last recession, I got involved with what we call insolvency. So that's both individuals and businesses that were struggling with their debt due to the recession.

So I spent some time doing what we call corporate insolvency, so receiverships, corporate bankruptcies, and very quickly realized that during that time, I was really only helping the professionals, and the business owner was losing his business. The employees would lose their jobs. The creditors wouldn't get paid and so on. So no one chooses this job on purpose. It falls in by accident. I accidentally fell into what we call consumer insolvency.

So now, I spend every day helping individuals who find themselves in too much debt. So there's licensed insolvency trustee, and there's about 1,000 licenses in Canada. We help individuals basically become debt-free by applying resolutions under the-- what's called a bankruptcy [INAUDIBLE],, which is a federal act, which allows people to basically work through a debt and become debt-free at the end of a journey, which is either a bankruptcy, or what's more common now is a consumer proposal.

So what I was doing is I was looking at their credit, and I'm like, you know, why are they getting declined here? And I found myself in a position where I was teaching financial literacy to them. And while I was doing that, I felt this big kind of feeling of injustice. Like, why don't people know this? And so I opened up a financial literacy education company. I worked with teenagers. I worked with young adults. Then I started consulting with financial technology companies.

And while I had this great career in financial education, my finances were not so great. I was racking up credit card debt. I was underearning. I was underspending. I was filing my taxes late. And it was like, how is it that I thought the reason originally I was doing these things was because I didn't have enough financial literacy, but not only do I have financial literacy-- I'm teaching it, and I still have these behaviors. And that led me to get on a path of trying to understand this.

So I started studying addiction recovery, behavioral economics, community economic development, trauma recovery, and all of these different modalities, the psychology of scarcity. And what I wanted to do is I wanted to bring them together to have them talk to each other. And that was really the birth of Trauma of Money was to create some connection between the mental health space and the finance space. DORETTA THOMPSON: That is fascinating.

The two of you met at CK Canada's Financial Literacy Conference in November. I saw you in conversation several times, and I'm really curious about what connected you. What did you find in common that really led you to want to keep exploring the sort of financial literacy from your two different perspectives? Chantel, maybe you could start.

So, of course, I wanted to talk with him more about what he was seeing, and I've been so excited for this conversation because at the conference, we only got little pockets to talk. But now we get to go deep, and I'm very excited to get into conversation with Jeff and you, too, Doretta. DORETTA THOMPSON: Jeff, I did see you in some of these quick conversations with Chantel. And how did her insights really kind of twig your interest?

But for them, it's brand new, and they've never been to see a trustee before. They've never confronted their debt issues before. So when we're talking to these people, in order to put ourselves in their shoes so we can advise them, perhaps, in a way they can understand. How are they thinking? What's going through their mind when they're talking to a professional-- and really laying out all their secrets, all their financial secrets on the table with someone they've just met.

So the way that Chantel has drilled into it and has analyzed people's thought processes and their mental states have been when they get into debt is, for me, it's fascinating.

And, you know, I'll give them advice, and we don't always steer them down the road of a solution that's legally regulated. Sometimes it's just, this is what you should, perhaps, be doing. Look at your budget. Look at the way you're spending money. Think about money differently. And sometimes they'll go away, and they'll try and work it out. But sometimes they come back, and they need help later on because they haven't been successful in, perhaps, what we suggested that they do.

So we know that when people come and see us, they've absolutely tried every single avenue to clear their debts up by themselves because people try and help themselves. They generally don't want help. So you'll go to your bank. You'll try and refinance your debt. That doesn't generally work too well if your credit rating is bad, and banks don't tend to like financing other banks' debt. They'll sell assets without any assets. They'll talk to friends. They'll talk to family.

They'll rely on high interest debt, what we call predatory lenders. And we see people with stacks of credit cards. Well, generally speaking, we really only need one credit card in life. But when you're financially distraught, you will go and take on more credit cards, so you can start moving credit around and moving those payments around, so using credit to pay credit. Call it kiting.

And when you can't access anymore credit, and you're literally at the bottom end of the-- the bottom rung on the ladder, that's when you go and see a trustee. So we know when people sit in front of us, they don't want to be there, but it absolutely needs to be there because this is their last resort. It's a very powerful thing, and I never take it for granted that when someone's coming to see me, they're putting huge trust in that person, so-- to ask for help.

You had to go through that process in order to get to the point where you are now, right? It's a journey. And I say to people, I say to people, well, you know, everyone meets me for the same reason-- because they have too much unsecured debt. But their journey getting there for everybody is unique and different.

It could be I'm carrying shame because I-- maybe the fact that I have debt means I'm horrible with money. And then I like to unpack, what is shame, actually? And we know that shame can basically become like an identity. It's not like, oh, I've got credit card debt, but I'm really great at money over here. It's like a whole blanket statement identity. And what is that feeling of shame-- what does that actually mean to us?

And we know that shame is the feeling of, I'm going to potentially be abandoned. So we say it's like the terror of abandonment. It's a massive feeling for folks, and this idea of being abandoned really allows that isolating narrative to seep through. And that's why Jeff says that so many people are kind of going through the same thing, but they believe that they're the only one. They carry so much shame. They're in this vacuum of isolation. And what happens is they blame themselves for it.

And so a lot of the work that we do in The Trauma of Money is we work, first and foremost, with shame. There's quite a bit of shame that exists within our financial world, and we help folks depersonalize that shameful narrative that they carry. So we ask this question, like, whose shame is this? Whose shame is it that I'm bad with money because I have debt, or people are going to think I'm a loser or stupid because I have this debt. And we ask, like, where does that come from?

Because we're trying to get them to depersonalize that identity, the narrative around shame-- and once they can depersonalize that and move out of isolation, they can get to a place where they can take action on what Jeff is going to try and share with them to do. And to get there, we call this a pro-social shame ladder. So step one is radical honesty. And it's not just like, I'm honest. You have to be received with acceptance and belonging because that's the opposite of abandonment.

So when I say that the folks that do the work that Jeff does are mental health practitioners, I mean it because they hold the role of acceptance and belonging. Someone goes in and says, radical honesty-- this is so hard for me to say, but this is going on. And that trustee is sitting there saying, you're still worthy. You're still a valuable human being. In that moment, that terror of abandonment-- it gets smaller, and then they can take the course of action that will help them get out of debt.

Does that resonate with you, Jeff? Is that how you feel, or is that how you see your clients? Do you see them lighten up under the burden of shame?

They lose their job through an accident or redundancy or an illness, or their expenses go up, they get divorced, perhaps, right? And their income stays the same, but their expenses double. So sometimes it's not any fault of anyone's own. It's just what happens through life. But because of the way they've been, perhaps, going through life financially and not been able to build up any cash reserves or anything to fall back on, then it does have a very big effect.

And I've had so many people over the years that have said to me, you know, I never thought I'd be in front of a trustee. And a year ago, I was riding high. I had assets. I had a house. I was married. And now the fall from grace is sometimes very, very sudden. So we do see a lot of shame. I can tell you a story.

I had someone in my office last week, a gentleman who was in his 60s, not quite retired, but divorced, had an older son who was looking after his son, and had a very, very large tax debt because of something he did in the past, and we filed him into a bankruptcy. And he was absolutely broken, this man. And I say to him, I said, this is the government helping you make a fresh start. And you know, he said it was the end. It's not the end.

It's actually the beginning because now you're going to go forward, and, in fact, in nine months, you're going to be debt-free of all this. And it was well over $1,000,000 of tax debt. So I think it's a mental journey. He said to me, I'm going to be OK. I'm going to have to get my head around it and think about it. But by and large, when you're talking to people and you're understanding-- because I always say to people, tell me-- tell me why you're here. Tell me your journey to get here.

And they come in, and their shoulders are on the floor, and you can see the weight of the world on them. But as they start to talk to you-- and we let people talk and tell us their story-- you can see them opening up. And then we come in and say, well, here's what I think we can do. Here's the advice.

And you can see the joy that spreads across their face that there's actually a solution, and they've met this person that's not judging them and that will talk to them as a real human being and is there to help them. And I think the biggest issue, frankly, at the moment is people don't know where to turn when they're in trouble. They don't know what help's available. And I think that's the biggest problem because if people knew the options available to them, they would get help earlier.

And I think we need to do a better job of that, frankly, because the longer you worry about money, the longer you stress about money, the worse effect it takes on your health, toll on your health. And I often say to people, I can fix your debt. You have to fix everything else in your life, but this will be a big change for you, right? This will improve your health.

And that's the most important thing because without health, as we know, you can be a multi-billionaire-- it doesn't mean anything if you're not healthy, right? So I love what I do for that reason, that you can change lives and show people a fresh-- give them a fresh start, really, in ways they didn't think was possible.

It reminds me of when I was researching financial psychology and money disorders, and one of the money disorders that I came across was overspending. And I was like, oh, that's interesting. Overspending is a money disorder-- makes sense. What is it? You spend more money than you make. But the way it was being framed is it was a disorder, which implies that something's wrong with the individual that's doing it.

And I noticed nowhere did it address that some people overspend because they live in poverty, and minimum wage is really low. Some people can't afford to live in the cities that they live in, and they're in a position where they have to access high interest debt. Some people don't even have access to bank accounts. They're under bank, and then they pay 10% of their income just to access regular banking.

And why do we call this-- like, the way it's framed, even in financial psychology, is this is a money disorder. This is a problem within you.

And I think, well, can we actually provide some of the nuances around that and separate that out and say, no, let's acknowledge that it's very challenging for you right here, or let's acknowledge, like Jeff said, you went through this situation, and there was a divorce, and this is what happened, and let's start normalizing that, because once we can start normalizing that, we can normalize the pathways to recovery.

And then the next thing that comes up-- and this is something, when Jeff said it, I was like, yeah, it's so true-- there's not a lot of awareness around the recovery pathway. Like, what I hear most of the time is just shame around bankruptcy or doing any type of reaching out for credit recovery support. There's just shame. There's not that education. There's not the reframing of looking at it as, like, maybe you have an addiction, and you go and get rehabilitation support.

Like, why don't we look at it like that? DORETTA THOMPSON: Recovery pathway-- that's such a succinct way of putting it. Jeff, when somebody comes in-- they've never been in this situation before, where they've reached out for help-- can you just give us a quick overview of what happens when you are in a position where you have to file for bankruptcy? How do you take people through that experience? What are their options? What does it look like?

They just talk, so they ask a question, let them talk, give them their story, and then I can drill it down fairly quickly into facts, into OK, these are your debts, these are your assets, and very quickly, provide solutions to people. And bankruptcy is one of the solutions under the insolvency. It is also what's called a consumer proposal, which is now more common in Canada than a bankruptcy, and for good reason. It's a much softer approach to dealing with your debt.

And I ask people to pay back a percentage of their debt according to their ability to pay. So they're avoiding bankruptcy, but mostly getting the same protection from their creditors. And really saying to them, where do you see yourself-- where do you see yourself in two, three, four, five years? What are you aspirations? What are your long term goals? And really, Doretta, it starts with budgeting because it's a really interesting fact that very few people can actually sit down and do a budget.

When I'm talking about doing a budget, I don't mean sitting and thinking about what you spent last night when you went out for dinner. I mean really sitting down and planning your finances and planning them short term, your monthly budget, planning your long term goals, your retirement goals, planning your short term, medium term goals. Perhaps you want to change-- buy an asset, buy a vehicle-- really sitting down and planning.

And I say to people, would you leave home-- and, of course, we never used to have Google Maps, right-- so would you leave home without a map to get somewhere where you didn't know where it was? And people would say, no, of course I wouldn't. Well, if you're doing the same with your finances, you don't have a road map for your finances, how do you expect to get where you want to be in a certain number of years time? So I say to people, well, you're behind the zero line. Now you're in debt.

Let's get you back to that zero line, and then what I want to suggest is that when we've helped you, and you're debt-free, then you go and see someone that can help you to get above that line and to progress financially in the future. And I've said to people in the past, if you woke up tomorrow, and you didn't have any debt, how would you feel? And they're like, well, it'd be amazing.

Well, this is what's going to happen, because you can go along for the next five years, and you can be paying interest-- by the way, interest in Canada can go up to 60% legally. Not sure if you knew that, so when you're paying interest at 30%, 20%, sometimes 40% is fairly common, you pay back more interest than you're actually repaying the debt. And people say, well, I've had this loan for two years, but I haven't paid anything off the capital because you've only been paying interest, right?

So let's reduce that payment. Let's get you in a position where, in five years, all your debt's gone. And they can suddenly see this light at the end of the tunnel. And it doesn't make any sense not to do it sometimes for people. I see some people towards retirement. Filing an insolvency coming up to retirement is one of the biggest things I've seen at the moment because people get to their 60s.

They've been carrying debt for the last 10 years maybe, maybe even longer, and they suddenly realize, well, in five years, I'm going to be retired, and I'm going to retire with debt. And so I haven't managed to get myself ahead, so what do I do? OK, here's a plan for you. We also see people in their 20s. We see young people between the ages of 20 and 30, again, with too much debt. But they've realized at an early age, this isn't a good idea, and I need to get rid of this to be successful.

And I say to them, well, in a few years, that debt will be gone, and you're going to be very successful in life, but you're doing the right thing now. So everyone's got a different story.

They're all at different stages in life, but the end result is what-- I call it financial freedom, where you get to that ground zero level, and then you can start to build your future wealth because the last thing you want to do is go through life and end up after working for 30 years, really, with the same positions when you started and struggle in your retirement years. DORETTA THOMPSON: One of my colleagues describes budgets in a way that I love.

She says, really, budgets are what help you make your dreams come true because it's about setting your priorities and lining them up that way according to what you really want to achieve. It is. Yeah, it is. But before you do a budget, you have to do a financial plan. So you have to set goals. So we talk about short term, medium term, and long term goals. So a short term goal may be I want to go on vacation in 12 months. Medium term goal-- perhaps they want to get married maybe in five years.

Plan for that. Long term goal is, obviously, retirement and that type of thing or buying a property. But it's not complicated. If you say to someone, well, they said, I want to go on holiday in 12 months, and how much is holiday going to cost you? I don't know-- $1,200. OK? OK, so you've got, now, 12 months before you go. How much do you have to save every month to get to that financial goal? We3ll, it's simple math, right? $100 a month-- in 12 months, you've got the cash in the bank.

You can pay and go on holiday. That's what I mean by financial goals. And it's not really rocket science. It's just simple math, but you have to put it together into a plan that's unique for you that makes sense for you. So we teach budgeting all day long. I mean, there's so many apps out there. There's so many things on people's phones that can help them budget. There really is no excuse anymore not to budget.

But whether you're earning $100 a month or $1,000 or even more, $10,000, it doesn't matter how much you earn. You still need to do a budget.

And I'll tell you something I have learned over the years is that what I've noticed is that individuals on lower monthly incomes save more as a percentage of their income than if you were you on a higher income because the higher income earners seem to have the attitude that, well, I have a lot of debt-- and we find that the bigger the income, the bigger the debt, by the way-- I have a lot of debt, but I can afford to pay it off because I'm earning more money tomorrow.

Well, if you're actually on a limited income, you're more concerned about money, and you're actually budgeting more on your limited income, but you'll actually be more successful at it. So being successful in life doesn't mean you're good at budgeting.

So they start getting like anxiety in the chest, and they just want to fall asleep. Or maybe they go into fight or flight, where they just-- they have to shut it down, and they can't even do it, and they feel nauseous. And so if that's happening, what we need to do is we have to work with that a little bit before they can get in the position where they can actually budget.

And another thing is within this psychology of scarcity, if someone is in financial scarcity, it impacts their ability to set long term goals so that the financial planning piece, and then mapping out a one-year budget is very hard. So what you have to do is you have to work within the scarcity tunnel in that situation. So what that means is in the tunnel of scarcity, you have to put out the immediate fire that's present. So if someone's like, yeah, I've got all this debt.

It's going to take five years to pay it off, but I can't even pay my rent. So what you're going to want to address is, how can we put out that immediate fire? And then what you're going to do is you're going to create some space in the brain, so they can actually work on those longer term goals. And that is one of the roles that Jeff and the folks that work in the space he does is they create plans for you within your scarcity tunnel.

So after you get outside of that scarcity tunnel, you can go into those bigger dreams and look even further ahead. And another thing, too, is when we're in that state of scarcity, we're more likely to act out on temptations because the nervous system is always going to look for ways to soothe pain, essentially. And so if we're in scarcity around money-- and what Jeff said is very true. Folks who are in financial scarcity or who have less, they budget all day long in their head.

They're very good at budgeting because they have to. They have to be in tradeoff thinking because they're in survival. That's essentially kind of what budgeting is for them. But they're also more likely to act out on a temptation when they're in that state because they become so cognitively exhausted, and they're essentially suffering. So they're going to want to reach out to something to soothe the pain.

This is why someone who's just about to go bankrupt is going to go and buy a new pair of shoes or go eat the chocolate cake or whatever it may be, because we're wanting to soothe ourselves. So budgeting, yes, all day long, but supported budgeting. Like, acknowledge the nervous system that's there. What do you need to be able to go do that budget? Is it making sure you have a nice cup of tea? And maybe you tell yourself, the first time I sit down, I'm only going to do this for five minutes.

And then you step outside. You sandwich it with support for your nervous system. And a big support for the nervous system is getting help with a professional.

Call one envelope "rent," one "gas," one "groceries," and so on and so on. So when you have to physically go and buy some gas for your vehicle, you take the cash out of the gas envelope, right? Let's say you get halfway through the month, and the gas envelope is empty because you've overspent on gas or you didn't budget enough. So where is the money going to come from? OK, I'll take it from my grocery budget. OK, now I'm going to go hungry. OK, so what am I going to do?

I'll take the grocery budget. I'll take it from something else. So you can see the way you push money around when it's a finite resource. And I think if people can do that, maybe it'd make more sense to a lot of people that where your money is actually going because when you pull out your credit card-- and by the way, credit sounds good, right? If you call a credit card a debt card, how many people would actually have a debt card?

So when you pull out your plastic card, and you pay for something electronically, it doesn't seem like you're spending real money.

CHANTEL CHAPMAN: Yeah, absolutely, and I'm glad you're asking that because that was one of the important points that I wanted to make but I forgot was that part of the compassion is to have this lens of empathy, understanding that someone doesn't just wake up and decide to get in-- become a gambler and get into bankruptcy or to be in these situations. There's something that happened to them that resulted in them needing to use their money in a way to survive or to soothe their nervous system.

And some examples of this would be relational trauma. So this is taking a look at the environment that a child grew up in with their family and the relational figures in their life and looking at maybe, was there any attachment challenges for that child? Did that child grow up in an environment where they had to have an overdeveloped sense of responsibility to survive or to people please to survive?

Did they grow up in an environment where there was a divorce, and one parent showed affection with money? Or was there scarcity in the environment? Another example would be generational trauma and intergenerational trauma, so looking at the ancestral lineage. Did the ancestral lineage experience scarcity? Did they experience any sort of trauma?

I mean, there's many communities of people here in Canada who's experienced a lot of generational trauma through colonization, which is directly linked to capitalism and money. And so it would make sense that through this generational trauma, it could impact the future relationship with money. Another example is societal trauma, so just looking at some of the messages that we receive from the society that we grew up in. So for example, what are some of the gender messages?

For men, men have been told, you have to be good at money, and your worth is very much tied to how much you earn. Now, the amount of shame that that narrative creates for a man who's in a position to go into bankruptcy is massive to the point where they may resort to suicide. And then look at the gender-based narratives around women. Women couldn't get access to a credit card until, like, 1970-something. So there's a narrative, like, women aren't smart enough to manage their own money.

And now think of the shame that comes with that when a woman says, yeah, I'm in a position where I might need to go bankrupt. So these are some sources of societal trauma. And then there's the entire looking at the lens of racism and the impacts of colonization. And then the last one is systemic trauma that we explore and just looking at some of the systems, especially in the financial space, that have been created in toxic societies that elevate some and marginalize many others.

So these are kind of the layers that we look at the relationship with money through. And Jeff, does any of that kind of resonate with your practice? Do you see that people are struggling with some of these issues? And are they different? I mean, do you see, for example, a difference between men and women, for example, or people dealing with some of the other issues that Chantel's raised?

So if your parents were good with money, by and large, I think the children may be successful-- I'll put that in quotes-- financially because they've learned early on some good money traits because I don't think-- I'm not sure if they teach it in schools anymore, but teaching financial literacy in schools obviously would be a huge benefit to everybody.

But, by and large, if people go through low income-- a life of low income and poverty, maybe because that's how they were brought up, and that's how they lived growing up. And it's very hard for them to break out of that. So we talk about the idea of a trustee is that they help people once. So people say to me, Jeff, I like you, but I never want to see you again, which is true, because if we're doing our job properly, we should never see that person again.

We should help them once, and they're going to be successful. But we do see people that have to see a trustee twice, sometimes even three times. So a third bankruptcy is not uncommon for people, a third proposal. And what I've noticed is that over the years, so 10 years is really-- is-- what happens in 10 years? So typically, 10 years apart would be people get back into debt, sometimes for different reasons. Sometimes it's the same reason. They just can't manage their money.

I mean, I saw someone last week, who didn't have much debt at all. And I said to this chap, I said, you don't really need a trustee. You can really budget through this and pay it off yourself because you have a fairly good income. And he said, I can't. I cannot do it. He said, I can't. I don't have that fortitude to do it. I need your help. And it didn't make-- logically, it makes no sense, but that person cannot manage their finances for whatever reason and needs the help of a trustee.

So I spend a lot of time, really, every day I'm educating people on what's available to them, what assistance they can get. But we never start with a formal filings. Always, what's a self-help thing you can do? There's lots of things you can do to help yourself first. And we've come across it before. We've [INAUDIBLE] again, budgeting, right? Now, if you can learn to budget through your debt and pay it off, then there's different ways to do it. There's the snowball method, the avalanche method.

Whatever works for you, try and get yourself a plan to become debt-free. But a lot of people, whether they come back to see a trustee once, or they're multiple offenders-- they just can't get their finances straight for any reason-- it does come down, I think, to the way you head's wired and the way-- your relationship with money, I think, stems from, like anything, from when you were a child, what you've seen your parents doing.

My parents had one credit card when I was growing up, one credit card. And it stayed in the drawer. They never even took it out. It stayed in the drawer, and it was there for an emergency. I think now, credit's become-- I think we live in a society where people don't want to wait for anything. They want something now. It's self-gratification, and they don't worry about what it's costing. They can go and get it because they have a credit card.

So people have said to me, well, I've still got some money left. I say, what are you talking about-- you've got money left? They say, I've got some room on my credit card. I haven't used all the credit yet. So they think of that as their money. No, it's not your money. It's someone else's money that you're borrowing. And they don't see that. I mean, I told you, I see people in their 20s that come to see me, and they've come in with a stack of 10 credit cards. These are young 20s.

I say, where did you get these credit cards? Well, they've got them at school, and they give out these credit cards with a small maybe $1,000 limit. They said, they never told me how to pay it back. And they just go out and spend it and think it's free money. Well, there's no free money in life, as we know. So again, I think it comes down to education, but the mental stigma of being in debt, it's very serious for some people.

And I mean, Chantel mentioned suicide, and at its extreme, yeah, the stress of money can cause it. And I've got stories of people that have seen me and have tried to commit suicide, and they told me they did. And they had no idea they were feeling like that. They were almost on autopilot. And so again, I say to people, you know, I can fix your money for you. I can fix your debt. This will help fix your mental health. That's the most important thing for you is to fix your mental health.

And before you do anything with debt, the first thing you have to do is balance your monthly budget, so you're not getting further into debt. So stabilize the ship. Make sure you're cutting your expenses according to your income, or you can get more income. You've got to balance your monthly expenditure. Then you can deal with your debt, and then you're on the road to success. But it is a very, very big mind shift for people.

DORETTA THOMPSON: Chantel, what do you think is beneath that issue of what Jeff referred to as the repeat offenders or people who maybe fight their way out of debt once or go through bankruptcy once, and then fall into it again and again? I suspect there's some pretty serious stuff going on under the surface there.

And part of that is our relationship with instant gratification. Now, we talk a lot about this in the program that we run, where we explore this very subtle message that we hear from consumerism. And that is that if you ever feel lonely, bored, tired, inadequate, anything but, like, that anticipatory excitement, the dopamine feeling, something's wrong with you. You are defective. And we have to fix that right away. And consumerism has positioned this fix as consuming something.

And we know, through the neuroscience and the research around dopamine, that dopamine is very addictive. And what ends up happening is people-- they call it a hedonic treadmill, where people will reach out to soothe their pain, and the increase of dopamine baseline will happen. But any time the dopamine baseline increases, in order for the brain and the body to balance out, it has to decrease. But the problem is we live in a world that says that if you feel low, something's wrong with you.

So we're going back on that cycle to get it up again. And the more we seek dopamine, that window of what gives us excitement or anticipation or pleasure, it starts to shrink. And so the things that are going to give us the dopamine increase are going to be more expensive or more risky.

And another thing that happens is studies have shown that when we do not delay gratification, so when we just swipe the card and get what we want right away, even though it's not our money-- it's the credit card money-- the prefrontal cortex in the brain can atrophy. Now, this is really important because the prefrontal cortex is the area of the brain that is associated with impulse control, executive decisioning, moving out of survival, this or that thinking.

Everything that we need for financial literacy and budgeting and planning, most likely, part of the prefrontal cortex needs to be lit up. So what it's saying is the more that you reach out for instant gratification, the less access you have to the part of the brain that helps you with decision-making and impulse control. And then it becomes this very, very vicious cycle, and this is why we see folks in-- it's like being in an addiction pattern. It's like the addiction to dopamine.

So logically, we could say, well, you shouldn't go bankrupt again because all of this pain. But the brain's like, I just need that neurochemical. In the research around dopamine-- so we often cite a dopamine researcher, Dr. Anna Lembke. And she works with folks who are in addiction recovery, but she goes to kind of the source of the addiction, and she kind of links it to like a dopamine addiction. And we see that often with overspending or gambling or even financial avoidance.

And one thing that she talks about is this strategy to put yourself on a path of recovery, something she called self-binding. And essentially, what this is is it's creating boundaries for your behaviors that you have around money. So I heard Jeff say a couple of these self-binding strategies, and they would be things like using cash and not using a credit card, so saying, OK, when I go out, I'm going to leave my credit card at home.

And I'm only going to take cash because I don't feel like I am in a place where I can trust myself to not use the card. So this is my self-binding strategy. Or if you constantly are in a space of chronic revolving credit, like line of credit or credit card debt, the self-binding strategy would be, you cannot have revolving credit. You cannot have something that you get to re-advance when you pay it down.

So looking for ways that we can create these little boundaries for ourselves, if we don't feel like our mindset is fully there. Another one she calls chronological self-binding, so this is using time. So I will only go and spend money on Saturdays, and it's only between the hours of 2:00 to 4:00 that I will engage in this behavior, and I have a limit of this.

Well, they're still depressed that I'm in debt, and I just need to get through this process, and because there's a very fast way. If you've never been bankrupt before, and you have an income below a certain guideline, then you can actually get out of debt fairly quickly relatively inexpensively. And some people just want to take that route and get through it quickly, so they can rehabilitate themselves mentally as well as financially.

And then there are some people that feel complete remorse, and they say, well, I never expected anyone to pay anything for me, so I want to pay back what I can. And we say, well, this is what, perhaps, we suggest you try and offer and pay back that you can afford. So some people would just want to get it done with, and there's others that want to take their-- we say the more ethical route, and say, you know, I'll pay back what I can. I mean, in the end today, you get to the same place.

As a trustee, it never ceases to amaze me that you can do this for people. And they walk in knowing that there's no hope and walk out with a plan. And you just can't put a price-- I mean, I've had more hugs, Doretta, from clients in this profession than anything else I've ever done because people are just so happy. They say, Jeff, can I give you a hug? And yeah. And I used to do-- so I started my career doing corporate insolvencies. That's when you close businesses down.

And I said to you, in that situation, no one really wins. This is the most gratifying thing I think I've ever found to do as a job. And I tell people, you don't jump out of bed when you're 18 or 20 and say, I want to be an insolvency trustee. The job finds you. DORETTA THOMPSON: One of the things-- I wonder if we can talk a little bit about maybe some healthy habits for people, where inflation is rising again. We're seeing interest rates going up.

People are becoming very squeezed on mortgages, et cetera. Do you have any advice to share healthy habits that people can do to stay on top of their finances to avoid needing your help and hugs? Yeah, absolutely. I do a monthly radio show, and we spoke about this recently. You have to talk to your family. I mean, I did one on Valentine's Day, believe it or not, about family debt.

And you would be shocked, maybe shocked at the number of husbands and wives that don't tell each other their financial full picture, if you like. You have to tell your partner. Talk to your partner. Get a plan together. Work together. And then confront your own situation. So look at your income. Look at your monthly payments. Look at your budget. And just try-- there's easy ways to help. There's easy ways to fix. People come in and see me, and their budget's offside.

I say, well, why are you spending that much on entertainment, or could you cut this down? Or your cell phone bill's $200 a month. Maybe you should only be spending $100, for example. So there's lots of ways to sit down and self-help yourself. And if you talk about debt rehabilitation and getting a healthy credit score and so on, there's metrics you should be following. Don't miss credit card payments. Don't apply for too much credit. Don't utilize your credit more than 30%.

So let's say you have a credit card for $1,000. Don't owe more than $300. And by the way, if you go into debt on your credit card, pay it off. Don't put money on there that you can't afford to pay off. So get into some healthy habits, and part of the process with a trustee is-- and this is government-mandated, by the way-- is mandatory credit counseling. So there's an education component to this because the government wants the people that they help to go forward and be financially successful.

So there's two sessions they have to do, and they learn about money management, budgeting, the warning signs of being in debt, so to avoid being in debt in the future, and have to be successful financially because it doesn't make sense to cure the issue without curing the problem. DORETTA THOMPSON: And Chantel, can you share some tactics with us for people who are facing this sort of mental stress and financial stress about debt, things that they can do to take control back?

So what's happening with my money that I find unhelpful? I'm carrying a lot of debt right now, and I feel like I'm in financial scarcity. Now, what is the belief around that? So I'm not smart with money. I'm not good enough. I'm a failure, and I have a lot of shame. So we're acknowledging the narratives that are present, and then we ask this question, like, whose shame is this? So we start to map where we first started hearing these narratives.

And so this might be like, if you're a woman, you might say, well, you know, I grew up in a world where I was told I'm not good enough with money. And in my household growing up, my mom and dad always fought about money. So you start to depersonalize some of this. And then, while you're doing that, you acknowledge the nervous system.

So what you're going to do is you're going to do something that is going to provide some nourishment to the nervous system as you're exploring some of these narratives. So that might be like, go outside and have a walk, or call a friend and have a laugh, making yourself a cup of tea, doing some intentional mindful breathing, cold water therapy, anything that can somatically support the body and the nervous system to move you into-- we call it the window of resilience.

That place, it's like the eye of the storm. It's the calm place within the stressful situation. And then once you're there, you then go into phase two, which we call the vision phase. So this is when you start going into the space of, what are my financial goals? What's really important to me? What are some of my values? How do I want to-- what type of life do I want to live?

Because we find that when you're more in alignment with some of your values and your visions, it becomes the motivation to pay off the debt or to do whatever the thing is that you want to do, rather than just taking the focus of, your bad-- you have to pay off this debt. It's like, well, why do I want to pay off this debt? You know, let's move to the place of hope. It's like, well, one time I dream of owning a home and maybe having a horse. I don't know.

And so it's like, what is the motivation there behind that, rather than making it a fear motivation? And then after that, the next phase we call the inventory phase. So this is where we're going to collect inventory of what we need to do to move into a helpful space with our money.

So if you are in a position where you've got quite a bit of debt that feels unmanageable, your inventory phase would be to do some research on what type of support is available for this and to call Jeff's organization and maybe have a consultation. Just-- all you're doing-- you're not making a decision. You're just collecting inventory. And when we look at it like that, it kind of takes some of the pressure off, and it allows people to move into that space of exploration.

And then from there, you feel way more supported to take action.

Please note, the views expressed by our guests are theirs alone and not necessarily the views of CPA Canada. This is a recorded podcast. The information presented is current as of the date of recording. New and changing government legislation and programs may have come into effect since the recording date. Please seek additional professional advice or information before acting on any podcast information.

Be well, be kind, and remember, managing debt is within your power when you're informed, prepared, and diligent.