I’m In Financial Trouble, What’s the First Step?
If you’re in any kind of financial trouble, one of the most important things to remember is that you’re not alone.
In fact, almost 15% of the average Canadian household income is currently going toward debt payments.
But, that may not necessarily make you feel better if you’re struggling with your own debt or you’re not sure how to find financial freedom.
You may find yourself wondering what to do.
The real first step in taking charge of your finances is to recognize and accept that you’re in trouble.
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Some of the telltale signs include:
- Paying off credit with credit.
- Difficulty paying bills each month.
- You can only pay minimums on credit card balances.
- You think about your debt/finances all the time.
It’s not always easy to admit you need help.
But, doing so can set you on the right track.
Talking To an Expert
One of the best things you can do once you realize you’re in financial trouble is to talk to a professional about your options.
If you’re already in debt, talking to a Licensed Insolvency Trustee (LIT) is likely your best option.
A LIT will meet with you to discuss your current financial situation and go over any documentation you can provide.
It is then the job of a trustee to come up with viable solutions and options you can put into practice to get out of debt and take charge of your finances.
In many cases, that will mean filing a Consumer Proposal.
A Consumer Proposal is a negotiated and agreed-upon document between you and your creditors.
You will both agree on an amount to pay back over a period of time.
Once the creditors agree, they will not be able to come after you for your debts.
These proposals can only be done through a LIT, so don’t worry about having to handle it on your own.
What Not to Do
Almost as important as knowing the first step to take is understanding what you shouldn’t do if you’re in financial trouble.
Though it might seem harsh, try not to rely on the advice of friends or family if you’re struggling financially.
They may have your best interest at heart and they might mean well.
But, having a lot of debt is a serious problem that requires professional knowledge in order to climb out of it.
One piece of bad advice put into action could cause even more problems for your finances.
Don’t be afraid to take a deep breath, admit that you’re struggling, and seek out the help of a LIT as soon as possible to break free from your financial worries.
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?