If you are experiencing financial difficulty in Lethbridge, you need to know you are not alone and you do have options. Thousands and thousands of Canadians are in similar situations and are finding ways to deal with their financial difficulties. All options begin with a personal budget.
To best determine how to get out of debt you have to know precisely how you got into debt. In today’s troubled times the answer to that question is often tied up in loss of income or reduction in income. While this change is typically what drives people to the brink, the hard truth for many Canadians is that all too many of us live way to close to the edge. We live in a culture that promotes spending most of what we make and saving little. The first thing you need to do is figure out where the money you do bring in every month goes.
This means the kind of rigorous analysis most of us rarely do. In the age of plastic, expenses get hidden in minimum monthly payments on credit cards. If you’re looking for ways to cut expenses you have to examine each and every charge. Many Canadians are stunned to learn they spend $40 a month or more on gourmet coffee and a muffin on the way to work every morning!
Once you know for sure where you money goes, you can determine whether you can cut expenses enough to start lowering your debt. If you can’t, you’ll have to look at other options.
First, you can get a debt consolidation loan to pay off your unsecured debt. With an asset of value to use as collateral, a stable source of income, and decent credit, you can pay off what you owe and be left with a single lower monthly payment.
Second, if you don’t qualify for a loan you can look into the different settlement options available. Basically, these options for resolving financial difficulty in Lethbridge can be divided into 2 categories;
- those in which you pay back all you owe over an extended period of time, and
- those in which you pay back a portion of what you owe over an extended period of time.
With debt management plans (DMP) and an orderly payment of debts (OPD), you work with a professional counselor who determines a monthly payment you could afford to make directly to the counselor in lieu of the multiple payments you’re currently making to your creditors. If your debt is low enough that it can be fully repaid in 5 years or less, the counselor contacts your creditors for agreement to the plan. A DMP is not legally binding while an OPD is. With an OPD – which is only available through a not-for profit credit counselor and only in the Provinces of Alberta, Saskatchewan, PEI, and Nova Scotia – your creditors are prohibited by law from continuing or initiating any collection activities against you.
Third, if you owe more than you can repay in full, your options are debt settlement plans – available through credit counselors – and consumer proposals – available through licensed bankruptcy trustees.
Both involve establishing an affordable monthly payment and then negotiating with your creditors, reductions in the total you owe which will allow repayment of the reduced amount in 5 years or less. The key difference between these two similar approaches to resolving financial difficulty in Lethbridge, and indeed anywhere in Canada, is the legal protections you get with a consumer proposal, but not with a debt settlement plan.
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