Consolidating Debt Through a Consumer Proposal or Bankruptcy in Strathroy
Four Tips for Getting out of Debt
When you are in debt, it can sometimes feel like there is no escape. Debt can be overwhelming, especially when you’re unable to handle your monthly payments and you’re receiving calls from creditors. It can seem hopeless. However, for many people, that isn’t the case. There are things that you can do to get your debt under control and manage your debt. Here are a few tips that will help you get out of debt, improve your financial situation and maybe even help you avoid bankruptcy. One of the options would be to file a Consumer Proposal instead.
Know your Debt
You would think that this one is obvious, but when you have a lot of debt, it can be tough to keep track of. This means that many people end up missing payments or making payments late simply because they don’t remember how much they need to pay and when. It also means that people end up paying high interest charges since they’re unaware of the interest rates on their debt.
If you want to get out of debt, you need to understand your debt. Take the time to write down every debt you have and when you need to make payments. Then take a look at the various interest rates on your debt. Doing so can help you understand how much it’s costing you to miss payments or to only pay the minimum amount owing.
Once you know how much you owe and when you owe it, use whatever method you need to remember the dates that your bills are due. Write them on your calendar, add reminders in your smart phone, set up automatic payments with your bank or do whatever you need to do to pay these bills on time.
Make a Budget
Of course, you won’t be able to pay your bills if you don’t have enough money. This is where making a budget comes into play. At its most basic, a budget is a list of the money you have coming in and the money you have going out. The goal is to have the amount coming in and going out at least balance, though saving some money for emergencies and retirement is very strongly encouraged.
You’ve already written down all of your debts (see above), but you’ll need to know all of your total expenses in order to make a budget. This mean everything you spend money on in a month, from debt repayment and rent/mortgage to transportation costs, clothing, groceries and everything in between. Don’t forget any expenses and be as detailed as you can.
You’ll then need to compare this to your income. Can you afford to pay all of your bills and expenses on your current income? If you can’t, you’ll need to find areas where you can make cuts. There are a variety of different budgeting tools available online that can help you. Hopefully, you can reduce your expenses enough that you can afford to repay your debts and still afford your necessities.
Check your Credit Report
Most people aren’t aware of the fact that you can get a copy of your credit report for free by mail. You will need to contact the major credit bureaus in Canada (TransUnion and Equifax) in order to do this.
Checking your credit report is important for a number of reasons. One is that it shows you your financial health. If you have missed debt payments or made payments late, it’s a good idea to know how these actions have affected your credit report and your credit score. It’s also a good idea to check your report for errors and to get these errors corrected.
Once you understand your debt, know the information contained in your credit report and have made a budget, you can come up with a plan for how to get out of debt. For some people, this could involve cutting costs, trimming expenses and using the savings to pay back their debts. For others, it could include actions like getting a debt consolidation loan. For others still, you may be in a position where speaking with a licensed trustee in bankruptcy can help you. Each financial situation is unique and the solutions for getting out of debt will be different for each person.
If you are looking for a way to get out of debt, you’ll need to review your financial situation and make a choice for how you should proceed based on the information you have. Speaking with a licensed insolvency trustee could help you. A trustee will review your financial status and give you information on the available options so that you can make an informed decision for your future.
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