One of the most stressful things about falling behind on debt is the dreaded collection call from creditors. If you don’t have the money to repay your debts, these calls only increase in frequency. Luckily, there are ways to stop collection calls and alleviate the stress they bring.
Make an arrangement with your creditors
One thing holds true for all creditors—they don’t like to be ignored. Instead of letting your calls from creditors go to voicemail, talk to them and try to work out an arrangement. Being upfront about your financial problems and letting your creditors know you want to get caught up can go a long way.
Before you talk to your creditors to work out a repayment plan or plan to get caught up, take a look at your financial situation and determine how much you can realistically afford to pay each month. Or, if you’re going through a hardship like illness or lost job, let your creditors know and see what they can do for you.
File a Consumer Proposal
If your creditors are unwilling to work with you, you may want to consider professional help. A Consumer Proposal is one option that can stop collection calls as well as collection attempts, like wage garnishment or lawsuits. It is a legal agreement between you and your creditors that allows you to settle your debts for less than you owe.
Consumer proposals are prepared by licensed insolvency trustees. Trustees are financial professionals who are licensed by the government to administer bankruptcies, prepare Consumer Proposals, and provide debt counseling. A trustee will help you determine an amount you can afford to repay each month, then submit that proposal to your creditors. If accepted, you make one monthly payment to your trustee each month. He or she then distributes the money to your creditors.
Consumer proposals are growing in popularity among Canadians because they not only stop collection calls, but they are a great alternative to bankruptcy and protect your assets.
File Bankruptcy
As a last resort, you may want to consider bankruptcy. A bankruptcy stops all collection calls and attempts, and it also eliminates all unsecured debts. When you file bankruptcy, you agree to surrender your assets in exchange for discharge from your debts. Many people worry that they will lose everything in a bankruptcy; however, this is not the case. Your trustee can help you determine what you can keep if you file bankruptcy in Manitoba.
Although it often gets a bad rap, a bankruptcy can actually be a positive experience. It provides relief from debt and offers a fresh financial start.
When creditors call, it can be tempting to ignore them or silently hope they’ll just go away. However, taking action by working out a repayment plan or visiting a trustee to find out what options are available to you can finally stop collection calls.
Jillian Taylor-Mancusi, LIT
