Debt Relief Options for Getting Out of Debt
If you’re in debt, then you’re not alone.
Thousands of Canadians are currently experiencing debt, but the good news is that there are several ways out.
Read on to find out about debt relief options and how we can help you to get out of debt.
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Is your debt causing you problems?
Being direct about debt can be difficult, and many people choose to bury their heads in the sand rather than to confront the reality of their financial situation.
The truth is that debt rarely goes away on its own and the first step to starting a new life as debt-free is to confront your debt and to admit when you need help.
Here are some signs that you may need help with your debt, do any sound familiar?
You don’t actually know how much debt you owe
When it comes to debt, ignorance is not bliss.
If you have lost track of your debts or are avoiding them for fear of how much you could owe, then this will only cause you further problems later down the line.
Debt relief options can help you to get a grip on your debt so that you can take action.
You struggle to pay your bills or to make your minimum repayments
If you are regularly missing payment dates or are struggling to meet your minimum monthly repayments, then it’s important to act before you begin racking up late fees and penalties.
Debt relief options can help you to consolidate your payments and to cut them into more manageable amounts.
Your debt is keeping you up at night
Debt can be very stressful, keeping you awake at night, putting a strain on your relationships and negatively impacting your mental health.
If your health is being impacted by debt, then debt-relief services can help to provide you with some relief.
You are hiding your debt
It’s very common for people to feel ashamed of their debt and to hide it from their friends or loved ones.
Hiding debt doesn’t make it go away, debt-relief options can help you to manage your debt so that you no longer need to feel ashamed about your financial situation.
You are borrowing to pay what you owe
Borrowing to pay what you owe only worsens the cycle of debt.
Don’t let payday loan companies and loan sharks take advantage of you.
Debt relief services can help you to break the cycle of debt by consolidating what you owe and helping you to work out affordable ways to pay.
You are being harassed by your creditors
If you are struggling to pay your debts and have creditors calling you and visiting your home, then debt relief services can help to put a stop to this harassment.
If some of these situations sound a little too close to home, then don’t panic, there are a number of debt relief options available to you and we are here to help.
Debt relief options for Canadians
When you’re living with debt it can feel as though there is no way out, but this couldn’t be further from the truth.
Debt is a common problem in Canada, and so there is guidance and there are procedures in place to help get you out.
In Canada, there are multiple debt relief options to help get you out of debt, including:
Knowing which debt-relief option to choose
Debt is never a one-size-fits-all problem, which means there isn’t a one-size-fits-all answer.
The best way to find the debt relief option that best suits your personal financial situation is to speak with a licenced debt specialist called an Insolvency Trustee.
A Licensed Insolvency Trustee is someone who is registered and licenced by the federal government to inform and act on behalf of those in debt.
Licensed Insolvency Trustees may deal with bankruptcies but they will not force you down this route unless it is right for your financial situation.
A Licensed Insolvency Trustee will speak with you about all of the debt relief options available to you and will help you to make a decision based on your own financial situation while taking into consideration your preferences.
Unlike unlicensed debt relief specialists, Licensed Insolvency Trustees will always offer you a free consultation, with further free follow-ups provided if necessary.
It will cost you nothing to have a Licensed Insolvency Trustee review your financial situation and if you do decide to go ahead with one of their debt-relief options then their fee will be taken directly from the repayments you make to your creditors.
Credit counselling is a great first-step debt-relief option and will help you to get a hold of your financial situation.
A credit counsellor will help you to understand your debt and will also be able to provide you with guidance about money-management and ways that you can tackle your debts on your own.
If you have multiple debts or are struggling to pay a debt with a very high-interest rate, then your credit counsellor may be able to help you to consolidate your debts and to freeze your interest rates.
If you can’t keep up with the number of payments you need to make a month and find yourself missing deadlines then debt consolidation could be the answer.
Debt consolidation is designed to help you transform multiple debts into one, easy to track and often smaller, monthly repayment.
If you qualify for a debt consolidation loan, then it can be a great way to get a grip on your debt, and with lower interest rates, you’ll be able to make a dent in the remaining balance much faster.
If your debts cannot be consolidated, or you simply have too much debt to handle alone, then the next option to consider is filing a consumer proposal.
A Licensed Insolvency Trustee will work with you to calculate a monthly repayment that you can afford to repay over a set term of up to five years and will then write your consumer proposal on your behalf.
Once your Licensed Insolvency Trustee has put together your proposal, they will file it with the government and liaise with your creditors so that you no longer need to speak with them.
As soon as a consumer proposal is filed your creditors will no longer be able to demand money from you and you no longer need to worry about debt-collectors arriving at your door.
Your creditors have 45 days to accept or to reject your consumer proposal, but most will accept as they know that it is a more lucrative option than if you were to file for bankruptcy.
A consumer proposal is a good alternative to bankruptcy for those with a regular salary or for individuals that have a lot of assets that they do not wish to lose.
At the end of the agreed term outlined in your consumer proposal, so long as all the required payments have been made, any outstanding debts to your creditors will be cleared and you will be debt-free.
And finally, if you are insolvent and have no other way to pay off your debts then you may want to consider the final debt-relief option, bankruptcy.
Bankruptcy can seem scary, but your Licensed Insolvency Trustee will be with you at each step of the way.
During a personal bankruptcy, your viable assets will be realized in order to pay a proportion of the debts owed to your creditors, leaving you debt-free at the end of the process.
Contrary to popular belief, bankruptcy is not a punishment and you will not lose everything that you own.
The purpose of bankruptcy is to help those with unresolvable debts to start a new financial slate, you may get to keep more of your assets than you think and you can also still take home a salary and keep hold of some of your savings.
How to get out of debt
If you’re ready to turn over a new leaf and to work towards a life that is debt-free, then we at Bankruptcy Canada are here to help.
We can connect you with one of 430 Licensed Insolvency Trustees across Canada who will be able to provide you with a free and confidential consultation in which you can discuss your debt and the number of debt-relief options available to you.
We understand that debt can be scary, but you aren’t in it alone.
For more information, or to be partnered with one of our Licensed Insolvency Trustees, please call us on (877) 879-4770 or fill out our online form.
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?
How to File for Bankruptcy
What is Bankruptcy?
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?