How to Get Help with Debt
Are you lost in a confusion of debt?
Befuddled as to the best route out of your financial problems?
You are not alone, as this is how many people feel when they consider the debt relief options available.
In fact, to the uninitiated, the road to becoming debt-free can seem like a confusion of paths, all leading in different directions!
The good news is that there is a way that you can make sense of all the options—a way of mapping the right route to debt freedom.
However, before you can chart this map, you must ask yourself four key searching questions.
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The answers being used to point you in the best direction for your specific debt situation.
These questions are:
- How much debt have I got?
- Can I afford to repay the entire debt?
- What are the debt relief options open to me?
- Where can I go to find help and support with my debt?
You will also be pleased to find detailed explanations of these questions below.
Therefore allowing you to complete them as accurately as possible and so get on the right road out of debt.
How much debt have I got?
You may not want to, but sitting down and working out exactly how much money you owe is the essential first step in your road map out of debt.
The best thing to do here is to make a list of every creditor you have alongside the amounts you owe.
You can even create a simple spreadsheet that can be adjusted as you go along.
Also, be sure to record how much each minimum monthly payment is and the interest rates you are charged for each entry.
To complete this task, you will need to review your bank, credit card, and bill statements for the last 6-12 months.
Happily, this is not such a difficult task anymore because this information can be accessed instantly online, usually through an organisation’s app.
It is also well worth your time to find out what your credit score and credit report say at this current time.
You can do this easily by contacting one of the major Canadian credit unions.
This first step can indeed be emotionally challenging, but you need to know where you are before you can figure out the path that will lead you to where you want to be.
Don’t be too hard on yourself when you figure out the totality of your debts.
Remember, you are not the only person to have ever been in this situation, and there are routes out.
You have even taken the first step by working out the amount of debt you currently owe.
Can I afford to repay the entire debt?
This next signpost on the route out of debt is an important one.
The reason is that the options for debt relief available to you will differ depending on your answer.
Of course, if you can answer yes to this question, it’s good news!
Your path out of debt will be significantly shorter and less winding because all you will need to do is make adjustments to your monthly spending.
Then you can pay the debt off with what you save.
However, if you wish to make the road to repaying your debts as short as fast as possible, you must remember three crucial facts.
The first of these is that you need to always pay off more than the minimum payment amount each month.
Wherever possible, you should seek to pay as much as you can every month for two reasons.
Firstly, it will shrink your overall balance, and secondly, it means you will pay less interest over time as well.
The second is that the debt with the highest interest rate is the one that you may pay off first.
Even if it is not the account that you owe the most on.
This is because high interest means you are being charged more for merely owing the debt.
Therefore the faster you can pay it off, the less it will cost you over the long term.
Finally, the third fact is you need to keep a tight rein in your budget.
That is, your outgoing spending always needs to be less than your income.
The reason for this is by spending more than you make, you will only be falling back into debt and compounding your financial situation even further.
The good news is that if you can pay off your entire debt in this way, you can have two routes open to you.
The first is to work with a credit counseling agency to create a debt management plan.
While the second is to create a debt management plan yourself.
Of course, most people tend to opt for the latter because a formal debt management plan will impact your credit report.
What are the debt relief options open to me?
Unfortunately, many people find they cannot repay their entire debts.
However, if you find yourself in this situation, there is no need to panic.
This is because there are other routes to debt repayment to consider too.
One path that you may wish to walk down to get out of debt is a consumer proposal.
This is where you pay off only a part of the entire sum you owe, usually over 5 years.
Alternatively, you may wish to consider bankruptcy as a route out of debt.
In fact, bankruptcy can help you because it provides a clean financial slate on which to begin again.
Although it is worth noting that some of your assets may need to be surrendered to qualify.
Where can I go to find help and support with my debt?
If you are still wondering How to Get Help with Debt, and what path is right for you, the best thing to do is speak to an independent and objective expert.
Fortunately, our experienced and empathic advisors can answer all your questions, acting as your get out of debt ‘sat nav.’
Just drop us a line by filling in the form below, or call us on 1-877-879-4770 to discover your route to a debt-free life.
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?