Dealing with Debt: Solutions to your Debt Problems
Is your debt becoming uncontrollable? Most debt issues are easy to solve, while others require the assistance of debt professionals to guide you towards your financial fresh start. The best advice we can give is to deal with your debt and financial problems now, before they spiral out of control.
Recognize the debt signs
You have a debt problem, or are going to have one, if:
- You continually spend more than your available income or you have to use your credit card to get by each month rather than a convenience;
- You are always borrowing money to make it from pay cheque to pay cheque;
- Your salary has been garnisheed to pay for outstanding debts;
- You can only pay service charges or make interest payments each month and you are unable to reduce your total debt from month to month;
- Creditors are pressuring you for payments, threatening to sue or repossess your automobile, furniture or TV, or hire a collection agency to recover the money for them; or
- Utility companies have cut off service or are threatening to cut off server because you are unable to make your payments.
When dealing with Debt, what are your options?
We recommend you to consider the following options when looking for a solution to your debt related problems:
Talk to your creditors
When dealing with debt, talking with your creditors to explain why you cannot currently make your payments might be the best option. You might be able to negotiate with the creditors to give you an extension, lower payments over a longer period of time and even lowering your interest rate. Many people are surprised to discover how willing creditors are to negotiate more favorable terms with customers who are willing to work with them.
Take Credit counseling
Another solution to your financial related problems could be credit counselling. If you have difficulties making a personal budget and adhering to it, counseling may help you. Many people find having the assistance of professional outside help to be a great benefit to getting their finances in order.
Talking out a debt consolidation loan
Debt Consolidation loans are a decent alternatives when dealing with debt from many different sources. Asking a bank or financial institution about combining or 'consolidating' your debts into one payment can bring you the necessary breathing room to start getting ahead. If approved for the debt consolidation loan, the bank or financial institution agrees to pay off all your debts and, in return, you make one monthly payment When dealing with debts in this way, make sure to do your research because interest rates and loan repayment terms are different with each financial institution. Once you have taking a consolidation loan it is very important to stop using credit. Continuing to use credit once your bills are consolidated will allow you to borrow even more money, digging yourself into a further into trouble.
You can make a proposal to your creditors to help alleviate you debt load. Meet with one of our professional advisors at Fresh Start BC who will work with you to determine what you can reasonably afford to pay each month. Once you have determined how much debt you can handle, you can then offer that repayment option to your creditors.
Bankruptcy is the last possible option. If all other options listed above cannot solve your debt problems, you may need to consider personal bankruptcy. Filing for bankruptcy should be a last alternative if you cannot file a reasonable consumer proposal.