Guide on Becoming Debt Free In Toronto
Many people living in Toronto have high levels of debt.
As a whole, the city’s level of indebtedness is at record levels and climbing higher.
For this reason, it is becoming more difficult for the average person to weather financial storms, such as emergency home repairs and job loss.
An increasing proportion of residents are falling into unsustainable debt, often through no fault of their own.
When you owe creditors a substantial sum of money, it can be a stressful experience.
Fortunately, though, with a little guile, cunning and professional assistance, you can become debt-free and reset your financial life for the better.
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Strategy For Becoming Debt Free
Nobody wants to go into debt.
It is a drag on your financial and emotional resources, and it profoundly affects your quality of life.
Clearing your debts, therefore, is a priority.
Getting debt-free requires taking a two-pronged approach.
First, you need to assess your current ability to repay whatever money you owe.
Start by partitioning your expenses into “fixed” and discretionary.
A fixed expense is anything that you have to pay to remain in your present location.
These costs could include local taxes, mortgage payments, rent, utility bills and essential transport costs for getting to work.
Discretionary expenses are anything left over after you’ve paid for all your essential outgoings.
Restaurant meals and trips to the cinema, for instance, both fall under discretionary spending.
Next, compare your fixed expenses to the money that you receive in income for all sources every month.
Ideally, there should be a significant difference between your outgoings and the money you earn.
If there is, then you have the scope to slash your discretionary spending and focus on repaying the money you owe creditors.
You will need to make some sacrifices in the short term, but eventually, you’ll whittle down the debt and become debt-free.
If you slash your discretionary spending but still cannot repay the money you owe, however, you may need to investigate alternatives strategies.
Non-mortgage debt – such as credit card and personal loans – often carry high rates of interest.
You can frequently find yourself in a situation where you’re unable to pay the debt plus interest, and it can spiral out of control.
You do, however, still have options, even if you can’t make ends meet.
Common strategies include things like a consumer proposal, bankruptcy, debt settlement, counselling, and debt consolidation.
The purpose of all of these mechanisms is to write off the debt or reduce it so that it becomes more manageable.
Staying Debt Free In Toronto
It can be a challenge for many people living in Toronto to remain debt-free, but it is possible.
While the city is expensive, there are strategies that you can use to reduce your outgoings and live modestly.
Changing your accommodation and planning how you will spend your money each month can both help to secure your financial future.
Ultimately, the key to staying debt-free is to ensure that you do not spend more than you earn.
Over time, frugality will allow you to build up a financial cushion that protects you from unexpected bills.
Information on Consumer Proposals
Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
Canadian Bankruptcies
How to File for Bankruptcy
What is Bankruptcy?
Bankruptcy FAQs
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?
