Are you staring down a mountain of debt? Not sure what your options are?
The fact is, most Canadians face some amount of debt, with some surveys showing that at least two-thirds of the population are carrying some debt.
Blame it on the global pandemic or something else, financial experts say the reason why individual debts keep rising is due to the increased cost of living combined with a higher cost of borrowing and, of course, expenses now often exceeding the individual’s income.
Luckily, you have options when it comes to debt relief in Victoria. Here are four of the more common options:
Option 1: Debt Consolidation
This popular process involves consolidating all debts into one loan payment, allowing for easier tracking of payments. It typically leads to savings on interest charges, too. Are payments challenging due to high-interest debts? Or do you need help keeping track of all your bills? Those are among the reasons why this is a popular option for those in debt.
Option 2: Debt Settlement
Debt settlement is exactly what it sounds like: You negotiate with your creditors to pay part of your outstanding debt in exchange for forgiveness of some or all of it. This is a particularly popular option for those who want to avoid bankruptcy but can no longer repay all of their debts.
Option 3: Consumer Proposal
The Bankruptcy and Insolvency Act oversees this legal type of debt settlement. A Licensed Insolvency Trustee (LIT) will negotiate with your creditors to reduce your debt by up to 80 per cent. You can also keep our assets and provide a “stay of proceedings,” which prevents creditors and collection agencies from contacting you. This puts you on a monthly payment plan with your creditors, and all remaining debt is cleared.
Option 4: Credit Counselling and Debt Consultants
Debt counselling and consultants are invaluable assets; they don’t expect you to know everything about crawling out of debt. Learn how to create a more accurate budget and outlook, evaluate your credit report and devise a plan to reduce or eliminate your debt – these services will ensure you fully understand the options that best suit your particular financial situation.
