It’s easy to run up debt. Unfortunately, it’s not that easy to pay down. Interest accumulates and it seems like no matter how hard you try, the balances just don’t seem to budge. Before you know it, your bills are out of control and you need debt help. In Kenora, there are many options for people who need help with their debt.
Signs you need debt help
In some cases, you can take control of your debt yourself. If your debt problems are the result of poor money management, a budget and debt reduction plan can get you on the right track again.
However, in some cases your problems may be more than you can handle. A few warning signs you may need debt help include:
- You have multiple cards, and most (or all) are at their limit. This is an indication that your spending habits are out of control. You may also be relying too heavily on credit cards
- You consistently make late payments or juggle payments. When your credit card or debt payments are always late because you can’t afford to pay them on time, it’s a sign you have too much debt.
- You can only afford to make minimum payments on your credit cards. Making minimum payments will only keep you in debt longer. You’ll also spend more money on interest.
- You consistently miss payments. Missing your payments results in costly late fees, putting you even further in the hole than before.
- You have at least one account in collections. When accounts go to collections, bill collectors call demanding payment, which can be stressful. It also severely damages your credit score.
- You don’t have a savings account. If you don’t have a savings account to fall back on, a job loss or unexpected expense can be financially devastating.
If one or more of these situations apply to you, you could probably benefit from debt help. These are a few options that may be available to you:
- Debt consolidation loan. This type of loan is used to pay off all your debts at once. Then, instead of making multiple payments to your creditors, you make just one lower interest payment for your loan. However, they often require a good credit score and collateral.
- Consumer proposal. This is an agreement between you and your creditors that allows you to settle your debts for less to be repaid within no more than five years. It also provides protection against creditors. Consumer proposals are arranged by licensed insolvency trustees. Once a settled amount is negotiated, you make one payment to your trustee, who then distributes the funds among your creditors.
- Bankruptcy. Bankruptcy relieves you of most of your debts. However, it should be a last resort. When you file bankruptcy, you will likely need to surrender a portion of your assets to be sold to pay off your debts. It’s also very damaging to your credit. However, it also provides a fresh financial start for those who have no other way out of debt.
It can be difficult to know where to turn for debt help. In Kenora, Licensed Insolvency Trustees are an excellent resource. They will help you decide what options are best for your situation.