Do you feel like your never-ending debt is running your life?
Many times, we end up in debt fully intending that it will be temporary, and that we will be able to pay loans back once the next cheque comes in. – And then life happens.
Debt can often accumulate silently, weaving its way into our financial lives without us even realizing it. Small, seemingly inconsequential purchases, coupled with interest rates and unforeseen expenses, can snowball over time, turning manageable debt into an overwhelming burden.
Feeling like you have never-ending debt can lead to feelings of anger, denial, and even depression. The good news is that there are many ways to reduce your debt. There are options available to help you regain control over your finances and by recognizing that you need help and guidance, is one of the first steps to becoming debt free.
Ask for Help
The first step in reducing your debt is to accept that you need help, and ask for it.
Sometimes family members and friends are eager to offer their support and have the financial means to pay some or all your debt for you. But this is only a temporary fix and now your family member or friend has become one of your creditors. This can put a strain on your relationships.
This is where a Licensed Insolvency Trustee (LIT) comes in. A LIT can look at your finances and help you determine the best course of action for your specific situation
Many people try to fix their financial problems on their own, waiting as long as possible to contact a debt professional for help. The better solution is to contact a LIT as soon as possible because the sooner you do so, the sooner they can help you find the right solution to your financial problems.
Understand Your Options
This is no charge or fee to meet with a Licensed Insolvency Trustee. The LIT will look at the amount of debt you have and go over your finances in detail. Once they have a clear picture of your situation, they can recommend various options.
You may be wondering how LITs get paid if they are providing advice for free? Their fees are paid from the payments made by you to your creditors in a Bankruptcy or Consumer Proposal, so no upfront fees at all. Once you file in one of the debt programs, all costs are included.
Options to consider when trying to improve your financial situation and get out of debt, include: – credit counselling, consumer proposals, and bankruptcy.
Try Credit Counselling
Credit counselling can help you find solutions to your never-ending debt problems. However, be warned that you must research this carefully, because credit counsellors in Canada aren’t required to meet any specific educational requirements.
Credit counselling agencies can be non-profit as well as fee-based so make sure you understand how the credit counsellor is getting paid before you agree to work with them.
Because most credit counsellors aren’t licensed, they cannot provide legal protection against your creditors and even though you may have a debt management plan in place with them, your creditors can still come after payments and/or garnish your wages.
Licensed Insolvency Trustees, however, are licensed credit counsellors and can help you create a debt management plan to consolidate your debt so that you are making one monthly payment instead of multiple. LIT’s are regulated by the government of Canada, so you know you’ll be receiving a quality solution for your financial problems when you work with them.
In this podcast, our Licensed Insolvency Trustee, Mark Marshall, delves into Bankruptcy and Consumer Proposals, two of the insolvency options mentioned below. Mark goes through the similarities and the differences between the two, and how both are able to resolve debt problems and provide legal protection from creditors.
Improve your Finances with a Consumer Proposal
A Consumer Proposal is a legally binding agreement where your LIT negotiates with your creditors on your behalf. The negotiation will result in you paying only a portion of the debt you owe while the remainder is wiped out. How much of your debt you end up re-paying depends on the agreement your LIT reaches with your creditors.
When you file a Consumer Proposal you put a stop to your mounting debt payments, and you become protected from your creditors.
A Consumer Proposal can help you take back control of your debt payments, allowing you to repay a portion of what you owe. This effectively stops the never-ending debt cycle.
Get Relief by Filing for Bankruptcy
Like a Consumer Proposal, filing for bankruptcy is a legal proceeding. Only an LIT can help you file for bankruptcy. The LIT you choose will guide you through the process and explain every step.
To file for bankruptcy, you will need to provide a list of all your creditors as well as a list of any assets you own. Once the bankruptcy has been filed, your creditors cannot take actions like garnishing your wages.
A bankruptcy officially stops the cycle of never-ending debt. It takes about nine months which means, after filing for bankruptcy, all your debts will be cancelled after nine months, and you can start rebuilding your credit.
You will be required to attend financial counselling sessions as part of your bankruptcy, and it will stay on your credit report for six years after the discharge date.
Stop the Never-Ending Cycle of Debt
Breaking free from the relentless cycle of debt often feels like a tough challenge, but seeking help can be the first step towards financial stability. There are options available to you.
You may seek advice from family and friends or credit counsellors, but a Licensed Insolvency Trustee is the only one who can legally put an end to your debt problems. Licensed by the Superintendent of Bankruptcy in Canada, LITs are the most highly trained debt consultants in Canada. Empowered with the right support, individuals can not only halt the cycle of debt but also build a sustainable path to financial freedom and peace of mind.
Once you stop the habit of going further and further in debt, you can start to rebuild your credit and even start saving for some of those fun things you’ve been wanting to buy. Doesn’t that sound like relief?
If you are struggling with a never-ending cycle of debt, Contact us today at Allan Marshall & Associates. We can help put you back on the right financial path. OR Call 1 (888) 371-8900 to set up your appointment to talk about your debt.
