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4 Pillars

4 Pillars Client's Debt Story - Month 1

There were many low points for me as I slowly accepted that my company, which I had managed for four years and owned for just one, was not going to survive. The worst was the moment when I realized it was going to drag me personally down with it.

The magnitude of my situation became clear to me through an email from my bank. My staff carried on a few feet away with business as usual, oblivious to my circumstances, as I read it. The bank, which provided me with my operating line-of-credit, informed me that I had until Friday to bring my account back in line, which meant an injection of $45,000. It was Wednesday. The consequence for not doing so meant my account would be suspended and my access to funds would disappear instantly. I was further informed that my account would be handed off to a special accounts manager in Calgary who would aggressively pursue repayment. "You won't like that experience," was how the email concluded.

Three months earlier I had taken out a second mortgage on my home to free up $70,000 in working capital. Then, by terrible coincidence, my two largest clients each deferred their spending by a full quarter. Rather than build the company's assets, my investment was needed to cover the shortfall instead. I had staff salaries to pay in 2 days. I had office rent to pay in 2 weeks. My accounts receivables were pretty much exhausted. I hadn't taken a salary myself in 3 months and, separated with an unemployed wife, I had 2 households to pay for.

As I stared out through my glass doors at my employees, a terrible sense of anxiety took hold of me. I knew my company was terminal. They didn't yet know it, and along with the financial disaster I was facing personally, I also realized I was about to send 8 other people out into unemployment. Not next month or even next week. It would happen tomorrow.

I foolishly thought this was rock bottom, that having to lose my company and lay off all my staff was the worst of it. But I had no idea how deep this hole actually went, and over the next few months I was to discover how much more miserable things could get for a businessman personally tied to his business.

I was going to lose my home. I was going to lose my reputation. I was going to lose my job and my income. I was going to lose my life savings, my daughter's education savings, my retirement plans. Worst of all, I was going to have to deal with the mountain of debt that had accumulated as I bankrolled my company through the poor months.

There was the 5-year office lease. The 6-figure accounts payables. The $90,000 line of credit. My mortgage, my wife's rent, my daughter's school fees. My hydro, Internet and cell phone bills. My credit card balance. There was major debt everywhere I looked and no respite in sight.

It was Wednesday. I was a successful marketer with a decent reputation, a well-known business, a lifetime of savings, a healthy outlook on life and a handle on my future. In 2 days, that would all be gone.

My staff would be laid off; the media would get wind of it and it would end up on the front page of the business section in the local paper; the bank would send their henchmen in; my creditors would start circling; my personal account would bleed out; I would be officially - and publicly - ruined.

I remember closing my office door and hiding out of view of my staff. I dropped to the ground and broke down. I was about to turn 50.

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