How to Pay off Debt When You Have No Money
Even when you have a generous and regular income, staying in control of your debts can be difficult.
With different payments coming out of your account at different times and wildly differing rates of interest, it’s easy for debts to spiral out of control.
When your income is limited, or even non-existent, however, you may wonder how you’ll ever be able to escape your debts.
The good news, however, is that no matter how dire your circumstances, you always have options.
The trick is to be proactive.
The more you bury your head in the sand, the easier it is for your debts to get the better of you.
Here are some ways you can pay off your debts, even when your income is severely limited…
Make avoiding debt your first priority
An ounce of prevention is worth a pound of cure.
Unless you take steps to avoid incurring more debts, you’ll just keep on piling new debts on top of old.
And this will make it even harder to keep your debts under control.
Even when your income is limited, you should use a household budget template to track your spending and make the most of your income.
A few impulse purchases here and there every month can make it much harder to pay down your debts.
Learn the rules around debt collection in your province
There’s nothing worse than living in fear.
Learning the rules around debt collection in your province, however, will give you a better idea of what your creditors (or debt collectors they sell your debt on to) can and cannot do.
In some provinces they may use wage garnishment to recover payments directly from your employer.
In some territories, you can send debt collectors packing if you have disputed your debt in writing.
The more you know, the better positioned you are to take action.
Reach out to your creditors
Making contact with your creditors can be scary.
But it’s also the best way to renegotiate repayment terms and interest rates.
Most creditors may be amenable to a Debt Management Plan.
This will allow you to consolidate your debts across 2-3 creditors and significantly reduce your interest rates.
In some cases, you may be able to waive interest altogether.
This can significantly reduce the amount you spend on repaying your debts every month and give you access to more disposable income.
This can be used to save and budget more efficiently so you’ll be less reliant on credit in the future.
Still struggling? We can help
Not all creditors are amenable to a Debt Management Plan.
But with the help of a Licensed Insolvency Trustee, you can pursue other options that can get you debt-free in as little as 5 years.
A Consumer Proposal, for instance, might allow you to write off up to 80% of your principal debt as well as interest fees and additional charges.
To find out more, call us today on (877)879-4770, and we’ll arrange a risk-free, zero-obligation and completely confidential callback.