Owing Money and Problems making Payments
If you owe money and you are having problems making the payments, there are options before insolvency to help you deal with your financial situation.
Create and/or review your budget
A budget helps you track how much money is coming in versus how much is going out. You need track of all of your expenses including all the little items. Little expenses can add up quickly over time and impact your ability to pay your bills. Once your budget is started, you should ensure that you are paying your essential bills before anything else. For example, make sure your mortgage, rent, car payment, insurance and utilities are paid first. Budget an appropriate amount for food and other household necessities. Remaining money should be used to ensure that monthly payments are being made on your debts. Any extras should be used to make extra payments to bring the total debt down.
Be Careful with Debt Consolidation Options
While debt consolidation is an option, you do need to be careful regarding this. Debt consolidation should result in smaller monthly payment requirements by reducing the average interest rate you are paying. Only having one payment instead of numerous minimum payments each month. Make sure monthly payments on the consolidation loan is lower than the total payments you are currently making on all of your debts.
Consider reaching out to your creditors
Call your creditors and ask them if they can defer a monthly payment, or reduce your interest rate. Many times if you ask you creditor, they will do something to help you out. This option will not work if the creditor has already started collection action. You need to take this step as early as possible after you notice that you are having trouble making your payments.
Dealing with student loan debt
Canada’s repayment assistance plan is an option available for any that are having problems paying back their student loans. Repayment assistance may provide you with payment deferral and/or interest relief. Depending on whether your student loan is administered, Provincially or Federally, you will need to contact the appropriate student loan office. Contact them to find out more about this program and how to apply.
Sell some of your assets
You could consider selling an asset that has some monetary value. This could be an extra vehicle or electronic equipment for example. The proceeds from the sale should be used to pay down your debts and improve your financial situation
If you are still not able to deal with your financial situation you can look to schedule a free initial consultation with our office. We can look at your personal situation and help to determine what the best avenue is for you.