The best way to get out of debt depends on many factors, including: how much you owe, if you earn an income, what your fixed expenses are, and what types of changes, if any, you can make to reduce spending.

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For easy-to-understand debt solutions, including bankruptcy, contact an experienced and compassionate agency . Get the help you need to rebuild your financial future. It’s easier than you think

Informal ways to manage your debt

If your debt is not overwhelming, you may be able to make some changes and pay back your debt.

For example,

• find out how much debt you actually have
• track your spending, and eliminate unnecessary purchases
• make a realistic budget and stick to it
• ask your creditors to lower the interest rates on your credit cards
• pay off your most expensive debts first
• pay more than the minimum amount due on your monthly debt payments
• find ways to earn more money, such as take on more work or a second job
• sell things (e.g. if possible, only have one family car, not two)
• cancel subscriptions or memberships you no longer need
• attend financial planning and management seminars
• stop borrowing money
• get help from a debt recovery agency

Formal ways to manage your debt

If your debt is such that you cannot simply make a few changes to pay it back, there are a number options you have to clear your debt.

1.  Debt consolidation

Debt consolidation involves combining several high-interest loans or debts into a single debt with a lower interest rate.

2.  Consumer proposals

Consumer proposals are often considered when part of a debt, but not all, can be paid off. This is a legal procedure under the Federal Bankruptcy and Insolvency Act (BIA) for a person whose debt is less than $250,000. In a consumer proposal, an offer is made to your creditors to change your payment schedule, or to lower your debts. If your creditors accept your proposal, you will be able to manage your financial situation without filing for bankruptcy.

3.  Division 1 proposals

Division 1 proposals are similar to consumer proposals except they are only available to individuals with debt greater than $250,000 (excluding the mortgage on their main residence).

Consumer and Division 1 proposals must be made through a Licensed Insolvency Trustee (LIT).

4. Bankruptcy

Filing for bankruptcy is a legal process that allows a person facing overwhelming financial difficulties to clear their debts and make a fresh start. There are advantages and disadvantages to filing for bankruptcy, and the procedure involves many steps. The decision to file for bankruptcy is a very serious one and should not be made before other debt management options are considered.

Get help

A criminal record will affect your ability to get a loan, a mortgage, or a job. To erase your criminal record, learn more at Pardon Partners. It’s easier than you think.

There are many options to consider when you are in a situation of financial difficulty. For easy-to-understand debt solutions on your terms, contact our preferred experts 4Pillars and rebuild your financial future. With 60 locations across Canada, they will help you design a debt repayment plan and guide you with compassionate advice. No judgment. For help, visit 4Pillars or call toll-free 1-844-888-0442 .

								
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