How to reduce your debts
CBC News is reporting that more Canadians than ever are worrying about their debts. The best way to reduce your debts is always to simply pay them off, but that is not easy for most people. Take a strategic approach to debt reduction by starting with a self analysis of budgetary wants and needs. Determine what expenses are necessary and which ones you can live without.
Cut out unnecessary expenses to free up money to pay down debts. Make debt repayment a priority. Never make only minimum monthly payments – if you are already only able to make minimum monthly payments that is s sure sign you are in trouble.
After cutting out spending on items such as eating out, alcohol, tobacco and other superfluous spending you need to stop, cold turkey, using credit cards, lines of credit and especially payday loans to cover ordinary household expenses.
Although it may seem important to see which creditors are getting the most interest, even low interest rates can mount up to massive amounts of interest if the debts are carried over longer terms – to facilitate paying higher interest creditors. Make sure all creditors get a fair pro-rated amount of money.
If you are not sure how to set up the prorate based on your available income call the office (at 519-646-2222) and arrange an appointment – we will help you at no charge. Stick with your plan – it will take months if not years to get caught up again.
Your credit rating may be preserved by this strategic approach but you may not be able to qualify for more debt because you already can’t afford to repay what you have. It might take years for you to get caught up to the point that you will qualify for new debt for a car loan or a mortgage.
Bankruptcy is the most immediate way of reducing debt to a manageable level and with a few years after finishing the proceeding you will find that credit becomes available at almost normal levels. Quite often, people who file bankruptcy after struggling to make minimum payments find that their credit is restored far more quickly than if they struggled for years to pay nothing but interest and fee payments.
There are several other options for reducing debt to manageable levels and we can help both with advice and administering the process to make your life more comfortable.