Dealing with Debt Guide: Find solutions to your Financial Problems

• You continually go over your spending limit or you use your credit cards as a necessity rather than a convenience;
• You are always borrowing money to make it from one payday to the next;
• Your wages have been garnisheed to pay for outstanding debts;
• You pay only interest or service charges monthly and do not reduce your total debt over many months;
• Creditors pressure you for payment, threaten to sue or repossess your car, furniture or television, or hire a collection agency to recover the money for them; or
• Utility companies cut off service because your bills have gone unpaid.

Contact your creditors

When dealing with debt it might help you to explain why you can't make your payments and suggest making lower payments over a longer period of time. You may be surprised but many creditors are willing to accept such arrangements.

Credit counseling

A solution to your financial problems could be credit counselling. If you have difficulties making a personal budget and sticking to it, counseling may help you.

Debt consolidation loan

A Debt Consolidation loan is one of the alternatives when dealing with debt: you can ask a bank or financial institution about combining or ‘consolidating’ your debts into one, larger debt consolidation loan. In such a case, the bank or financial institution will pay off all your debts and, in return, you make monthly payments to them. When dealing with debts in this way, make sure to shop around because interest rates are different. It is important to stop buying on credit. Continuing to use credit could make your debt load too great for you to handle.

Consumer proposal

You may make a proposal to your creditors to deal with your debts. Your professional advisor at Hoyes Michalos will work with you to determine what you can realistically afford to pay each month, and then offer that settlement to your creditors.

Personal bankruptcy

If none of the above methods solves your debt problem, you may consider personal bankruptcy in Ontario. Filing bankruptcy should be a last alternative if you cannot file a reasonable consumer proposal.