Debt has a pesky way of sneaking up. It could be your sudden habit of eating out at expensive restaurants or splurging without second thoughts. And sometimes you may be in debt not due to your expensive taste but because of other unexpected events that happened in the past, such as a medical emergency or emergency of any different kind. Whatever the case or reason, debt is a reality that many people face. If not dealt with promptly, it could impact your lifestyle, and you may stare down a seemingly endless pile of bills.
When looking at your credit card bill, if you sigh with anxiety, “how in the world did I spend this much money” continue to read this blog to understand the steps you can take to mitigate and eliminate your debt.
- Calculate the amount you owe: The first step involves getting a sense of reality check-how much you owe to creditors. Compile your most recent bill statements (credit cards, loans, etc.). Make a list of all your creditors and what you owe each of them. Many people are afraid to do the math, but you won’t have a clear goal to work for unless you don’t do it.
- Check your credit score: If you’ve paid off your debt in the past, you might have an excellent credit score. This can help you avail another loan with a lower interest rate for debt consolidation. Under this plan, you will borrow one lump sum amount and pay off your existing loan. You will only have one loan amount to clear off.
- Draft a plan, and don’t forget to take professional help: There are different ways to get out of debt. One is to pay extra on a loan with the highest interest rate, or the second is to pay extra with the lowest balance. These two schools of thought have their pros and con. It could be you are not in the position to take enough out of your existing income. Don’t get discouraged, though. If you are willing to change your spending habit and adjust your payment, one of the debt help Canada agencies can help you draft a financial plan. Choose an accredited agency willing to offer advice and has years of experience in this field.
Broadly speaking, debt counsellors will suggest you do the following steps:
- Makes you connect with creditors and explain why you feel behind and what concessions you need to catch up. Most creditors will be willing to lower your interest rates and waive fees for you to pay off your loan quickly.
- Will educate you on debt settlement and options to manage debt if nothing else works at the end and offer advice on which one best suits your situation.
- Helps you build an affordable budget plan and how to live with it for the time being
- An overlooked aspect of many credit counselling services, it increases your financial literacy by leaps and bounds that will help you make sound financial decisions in the future.
Therefore,
The aforementioned steps are a few of the concrete ways that have the potential to get you out of the debt situation. Moreover, if chosen to work with a credit counsellor, you will be able to avoid debt and learn the intelligent ways to manage your expenses and income effectively. When you are in debt, getting out can seem overwhelming at first but talking it out with a counsellor can help you in more than one way. They are certified and have experience in managing debt by presenting you with various options to choose from that can ultimately help you get out of the debt quickly.
