5 Myths About Debt Payments
Debt Payments Myths
If you want to get your life back on track with debt, then you need to make sure that you are doing everything you can to look at all of the options that are available.
That being said, it’s also important that you do your own research into advice providers as well, so you can find out if what you believe to be true, really is.
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Bankruptcy is an Easy Way out of Debt
Declaring bankruptcy is not an easy way for you to escape all of your financial problems.
It won’t fix your credit rating either.
When you decide to go ahead and file for bankruptcy, this will be recorded on your credit bureau report and it will stay there for a period of 6 years.
During this time, it can be very difficult for you to get any kind of credit.
The cost of bankruptcy isn’t just financial either, in fact, there is a huge emotional burden that comes with it as well.
The burden may stay with you long after your bankruptcy is removed from your credit report as well, so before you dive into this as an option, do your research and make sure that you are understanding of what bankruptcy actually entails.
Everyone Skips Payments from Time to Time
If you have ever skipped payments before then you might not think that it is a big deal and that everyone does it from time to time.
At the end of the day, skipping payments is a huge warning sign and it shows that you need to seek some help with your debt.
Every credit obligation will come with terms and agreements, and when you take out a loan, you agree to make those payments.
If you skip out on payments, then this will reflect very poorly on your credit report.
What a lot of people don’t know is that if you do not live up to your payment agreement then your lender has the chance to call in your loan.
This ultimately means that any other payment arrangements for the future are cancelled, and you will need to pay back the entire loan right away.
This would leave most people in a very dire situation because if you had the funds to pay back your loan then you wouldn’t have skipped out on them to begin with.
If this happens to you then your card will be blocked, and you will only be able to make payments to bring down your debt.
If you cannot make your payments, then contact your creditor and explain your situation.
You need to make sure that you are able to give them a realistic timeline as to when you expect to be caught up with your debt.
Anyone Can File for Bankruptcy
Public perception might be that anybody can go bankrupt and that it is a complete choice.
Sure, bankruptcy is a good option for a lot of people but there are some costs and fees involved.
It is not the right solution for everyone either.
If you want to get some help, then you need to make sure that you look at your level of income and you also need to make sure that you explore the idea of a consumer proposal.
Bankruptcy is the Only Option you Have when You’re Deep in Debt
This is not the case at all, as it’s possible for you to enrol in a debt management program if you don’t see a way out.
It’s also possible for you to look into orderly repayment of debt.
This is only available if you live in Nova Scotia, Saskatchewan and Alberta though.
You also have the option of debt consolidation, refinancing your home, consumer proposals and informal settlement proposals.
At the end of the day, there is no one-size-fits-all option here, so it is imperative that you explore your available choices so you can make the best decision overall.
My Lender won’t Give Me More than I Can Afford
When you apply to borrow any kind of money, your lender will calculate how much they are willing to lend you.
This will be based on your before-tax income.
This can be 30% higher than what you actually receive.
To make things even more dire, some lenders don’t even account for things like dental costs, childcare, medical bills, payday loans or anything else of the sort.
It is your responsibility as a borrower to make sure that you can afford whatever you are taking on, whether it is a mortgage, loan or anything else of the sort.
Bonus – What if you Stop Making Payments?
Never hide from the debt you owe.
Take charge and also make a plan for how you would like to tackle the situation.
If you ignore phone calls, bills or even notices then this will always make your situation worse.
If you think that ignoring the calls will make it go away, then it won’t, in fact, it will grow continually worse until you don’t see any kind of way out.
If you want to help yourself here, then you need to make sure that you contact a credit support agency.
They can then talk you through the options that are available, and they can also chat with the lenders on your behalf.
When they do this, you can then feel assured knowing that the situation is being handled properly.
If you are in a large amount of debt then Bankruptcy Canada can help.
When you come to us, we will work by your side to make sure that you are completely comfortable with the process and the route that you have decided to take.
It’s this level of care and attention that helps us to stand out as being one of the best and we are very proud to say that we will always negotiate with creditors on your behalf.
If you want to find out more then please do give us a call, or send us an email.
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