Getting Out of Debt – Halloween Horror Stories to Learn From

No matter how you slice it, debt is a scary thing, especially when those phone calls start coming in from creditors threatening to take action in order to obtain what they are owed. In the spirit of the season, we thought we’d share some truly terrifying getting out of debt horror stories in the hopes that you can learn from other people’s mistakes and keep yourself protected!!

Scenario #1: One of the most tragic stories, and yet one we continue to hear on a regular basis, is the one about the “debt consultant” who requires payment in full before paying off your creditors, only to disappear (or the company claims bankruptcy) just as your payments to him are completed! This is such a terrible occurrence that often leaves individuals with little avenue for financial recourse, having paid out hundreds, if not thousands, of dollars in the belief that their debt will eventually be settled.

Lesson to be learned: Don’t trust an individual who asks for payment in full before paying off your creditors – this is just bad news all around!

Scenario #2: We’ve all received them in the mail – those offers from credit card companies that give you 6 months no interest and encourage you to pay off existing credit card debt with this new card. Sure, this may sound like a great option – but what happens when that 6 months is up? Not only have you impacted your credit report with the initial inquiry and subsequent credit seeking, you’ve also essentially traded one card limit for another.

Lesson to be learned: Unless you are certain that you can pay off the initial debt in its entirety before the time limit expires, toss these as you would any other credit card offer.

Scenario #3: Recently a couple entered our office with a story that is financially terrifying for a number of reasons. After attempting to deal with their debt on their own with little success, our clients called the number of a debt company they found posted on a billboard (bad idea #1). The initial phone meeting sounded promising, and the company sounded quite legitimate, so the couple decided that the guarantees sounded so great that the offer was one they could not pass up – until they were asked for a money transfer of $500 to secure the company’s services. Fortunately, after further inquiries, and more online research, the couple realized that this was a major scam and averted a crisis that likely would have resulted in a serious loss of money! What scares us here is the knowledge that far too often the temptation is too much and the due diligence just isn’t done!

Lesson to be learned: Do your research, read reviews, know who it is that you are placing your trust (and your money) in.

True debt relief from a professional, respected, well-known organization is the safest, most effective means of getting out of debt without incurring exorbitant fees and further financial stress. At DebtCare, we are committed to providing you with the knowledge and expertise to help you get out of debt as quickly as possible. Call us today 1-888-890-0888.

New Year, New Plan – Start by Getting Out of Debt!

Happy New Year Everyone! Time to get those resolutions started – and for many of us this means getting out of debt! With holiday shopping out of the way (and the subsequent credit card bills screaming at us from the mailbox), you can actually get down to business and rein in that spending. This year, start with a plan that you will actually be able to stick to, rather than just casting it aside a few weeks in. The only way to get your debt under control is to tackle it head-on.

Tip #1: Examine. Start by looking over all of your finances – usually not a fun experience – but something that cannot be avoided. In order to start fixing the problem, you have to know what the problem is. Go over all of your bills and make a list of totals owed for each, as well as a grand total (ouch!). This will also help you keep track of monthly bills and can be a great motivator when those totals start to decrease!

Tip#2: Assess and set priorities. Now that you know how much you owe, and to whom, step 2 is to figure out which items are the most important. We are not saying here that you should pick and choose which bills to pay – far from it – but rather which can receive a larger chunk of your monthly income. For example, if you choose to tackle the highest debt first, this may mean making only the minimum monthly payments on smaller cards but a much larger payment on the one with the highest amount owing. Or perhaps interest is the biggest factor, so make that card the priority.

Tip #3: Set a budget. Now that you’ve got the worst part (for most of us) out of the way, it is time to establish a realistic budget. This means taking into account all of your monthly spending and income. Doing this should help you eliminate some of those things that are a tad frivolous, or to limit yourself in those areas that see a lot of unnecessary or out-of-your-budget spending.

Tip #4: Stick to it. Perhaps this may sound easier said than done, but you have to be diligent. Debt isn’t going to go away on its own (chances are pretty high that, if left alone, it will only have the opposite effect). Try to think about ways to keep track every day, and make sure that you are tracking your spending and taking note of decreasing totals.

Tip #5: Can’t see a light at the end of the tunnel – get some help! If you have done these things but still can’t see a way to continually meet minimum payment requirements, stop stressing and get some help. A debt management firm can offer a number of different options to help you get out of debt, including debt consolidation, consumer proposal, or bankruptcy. These opportunities can often mean significant savings as far as interest, and can help you get the debt relief you need to keep your finances afloat.

Getting out of debt can be difficult, but it doesn’t need to be a nightmare. This year, try to stay strong and keep to that resolution. DebtCare can help – call us today at 1 (888) 890-0888.

BOO! Don’t Let Your Consumer Debt Scare You – Fix It!

This time of year it is hard not to find yourself celebrating the scary season, whatever that may involve. However, the scare factor should have everything to do with ghouls and goblins – but nothing to do with your consumer debt. If your debt scares you – no matter what time of year it is – it might be time to consider taking control of your finances and getting out of debt.  

What is consumer debt – is it just debt? Well, no. Consumer debt refers to the debt accumulated through purchases which are consumable or do not appreciate in value. Credit products such as credit cards are the main conduit for this type of debt. Debt from other transactions, such as your mortgage, is not considered consumer debt.

Consumer debt is often the most troublesome form of debt, especially when it is debt owed on a credit card. This is because of the high interest rates charged by credit card companies. This interest, often around 20%, can make paying off debt very difficult, especially when you can only afford to make minimum payments. Don’t think it is a major issue? Most credit card statements will give you an approximate timeframe as far as when the debt will be totally paid off by paying only the minimum payments. Take a look at that number – it just might scare you into action.

If you are finding it difficult to decrease your balances, or if you continue to rack them up and then have trouble meeting the minimum payment requirements, a smart idea is to get some help – you don’t have to do it alone. Visiting a debt reduction company with experience helping people deal with debt can help you get things back on track. Your debt reduction solution may involve debt consolidation, credit counselling, a consumer proposal or bankruptcy – it all depends on your individual financial situation. Sitting down with a professional will help you to establish a plan to get things going. This will help to stop or avoid harassing calls from collection agencies and any future (or current) enforcement action, such as wage garnishments or property liens.

Stop ignoring problem consumer debt – and don’t let the thought of dealing with it frighten you. Get the help you need today to get back on the road to financial success.

For more information about dealing with your consumer debt please contact DebtCare Canada today by calling 1-888-890-0888 or visit www.debtcare.ca. 

Personal Financial Improvement: How to Rebuild Credit in 3 Simple Steps

Getting into debt is often very easy, and when that debt gets out of control it can be much harder to get out. The consequences of debt, especially when those debt responsibilities are not being met, can be devastating. Getting financing for a car, obtaining mortgage financing, or even being approved for a small loan for incidentals can be extremely difficult, and so getting out of debt is critical if you want to have a secure financial future. And, not only do you need to know how to get out of debt, you will then need to know how to rebuild credit. 

How can debt impact your credit? Missed or late payments, too much credit, too many credit checks and credit going to collections all work towards bringing your credit score down. Your credit report also reflects any credit activity and so any lending institutions can easily gauge credit behaviour based on this reporting. Many debt solutions, such as consumer proposals or bankruptcies can also harm your credit, but if it has gotten to the point that these debt solutions are where you turn for help, they can actually be the first step in how to rebuild credit.

How to rebuild credit: Step 1. Recognize that you may have a financial problem. If you are at the point where you are living paycheque to paycheque and have accumulated so much debt that you are only making minimum monthly payments - even if you make those payments on time - you have a financial problem. Making minimum payments on credit cards barely covers interest and so the debt will never be paid off. If you can’t manage minimum monthly payments, you have a financial problem. If you rely on your credit or payday loans to make ends meet - even if you are honouring your repayment terms - you have a financial problem.

How to rebuild credit: Step 2. As noted, the best way to start rebuilding your credit is to get rid of your debt. A professional debt management company is the smartest way to do this as they will be able to offer you the guidance and help that you need to get those debts paid off. Debt consolidation, a consumer proposal, bankruptcy or a debt settlement might be the answer – it all depends on your current financial situation.

How to rebuild credit: Step 3. Once you have paid off/settled all of your debts, you need to attempt to establish your credit once more in order to repair it. A great way to do this is with a secured credit card. With a secured credit card, you offer a cash collateral and the lending institution will take that money and it becomes your credit limit. You then use the credit card as you would any other – and make sure to make regular payments, never just the minimum. Also, stay away from payday/cash advance loans. These do not report to your credit report and can start a vicious borrowing cycle that can be hard to get out of.

Rome wasn’t built in a day, and rebuilding your credit won’t be either. It takes time, but knowing where to start is the first step.

For more information about how to rebuild credit, or to find out about possible debt solutions, please contact DebtCare Canada today by calling 1-800-890-0888.

Debt Management – You Don’t Have to Do it Alone

When you are in debt, the personal issues that all too often accompany it can be overwhelming, and sometimes the task of ridding yourself of this financial burden can feel insurmountable. Knowing where to turn for advice or assistance can be tough, and so many people instead try to do it on their own. Debt can be crippling, but getting out of debt doesn’t have to be hard when you have the right people behind you, those that can offer debt management plans that can relieve your financial stress.  

There are several different types of debt management solutions available, and choosing the one that best suits your financial situation takes knowledge and a careful consideration of the options which exist. The most effective way to set in motion the best debt management program is to speak with a professional debt consultant.

What types of debt management programs can a professional organization offer?

Debt consolidation: Often debt becomes so problematic because monthly payments can take up the majority of your disposable income. This becomes even more challenging when those monthly payments are mostly interest, meaning that you are making very little principle payments overall. With a debt consolidation these payments are all combined into one manageable monthly payment, often with far lower interest. That being said, debt consolidations are often options only for those with credit in somewhat good standing.

Consumer proposal: Once your monthly payments become so large that you are often unable to meet them all, collection agencies may begin calling. A consumer proposal is a smart debt management program that allows you some relief from your debt obligations by lowering the amount you are required to pay back. Done in negotiation with a bankruptcy trustee, a consumer proposal leaves you with one monthly payment, freezes interest accumulating on debt and also stops collection action being taken against you. Consumer proposals are administered by bankruptcy trustees. It is important to note that trustees do not represent the bankrupt; they act to make a fair financial arrangement between you and your creditors. Never visit a trustee without your own representation. You want to work with someone with expertise in consumer proposals and bankruptcies to get a plan together and you should be able to count on your representative to negotiate with the trustee on your behalf.

Bankruptcy: If you have found that your monthly debt repayments far surpass your monthly income, and that you can’t keep up, bankruptcy might be the best option for you. Like a consumer proposal a bankruptcy must be conducted with a bankruptcy trustee, but it can leave you with relief from collection calls or wage garnishments. A bankruptcy can decrease your credit score, but if you are considering this option you have likely already damaged it.

Credit counselling: Credit counselling organizations are not-for-profit organizations where you make a single monthly payment to them which they distribute to your creditors. Credit counselling repayment terms can be long and grueling and credit counselling programs can result in significant damage to your credit.

Getting out of debt can be tricky, but you don’t have to do it alone. Ease the stress by choosing a debt management program in consultation with a professional debt consultant.

For more information about how a debt management program might be the solution to your financial problems, please contact DebtCare Canada today by calling 1-800-890-0888.

Back-to-School Shopping – Don’t Break the Bank

With the end of the summer and the beginning of September comes the inevitable back-to-school shopping. Whether for new clothes, shoes, backpacks, or school supplies, the total bill for back-to-school shopping can often run in the hundreds – especially if you have more than one youngster heading back to the classroom. Once they get older and those clothes they want become big ticket items, the bills get even heftier. Here we offer some smart back-to-school shopping tips that will help keep you from breaking the bank. 

Tip #1: Make a list. Get the kids to help. Set a budget and stick to it. Clothes can get expensive, even with the sales, so separate wants from needs.

Tip #2: Do inventory. Many of the things you need are likely already in the house. Go through and see what can be reused. Backpacks and pencil cases can be repurposed with fun fabrics, old patches, fabric paints, etc. Pencils are the same no matter how old they are. And always hold off on other purchases until you get a list from the teacher of what will be needed.

Tip #3: Talk to other parents. Word of mouth counts for a lot as far as finding deals – you might be surprised about what sales are out there that you were not aware of. They may also be able to provide other money saving tips.

Tip #4: Buy the basics in bulk and make lunches. Packing brown bag lunches can save a lot of money, and buying your lunch snacks in bulk can make it even cheaper. Avoid added costs such as drinking boxes by spending a few dollars upfront for a fun reusable water bottle – healthier and cheaper.

But what if your back-to-school budget is a lot less forgiving than these tips compensate for? If you are drowning in debt, back-to-school shopping can come with a great deal more stress than just having to brave the crowds. The beginning of the school term often signals a fresh start for kids, so why not take this chance to make a fresh financial start for yourself. Getting out of debt is a good idea at any time of the year – but any motivation that spurs you into action is a good thing.

A smart option for reducing your debt, especially if you have tried on your own with little success, is to turn to the professionals for help. A professional debt consultant can not only help you better understand the various debt solutions out there and which one would best suit you, he or she can also help you develop a smart budget that is realistic. You don’t have to do it alone. Let the teachers at ‘debt school’ help you take control of your debt.

For more information about getting out of debt this September, please call DebtCare Canada by calling 1-800-890-0888 or visit us online at www.debtcare.ca.

Getting Out of Debt Blog Series #4: Debt Settlement

With the average consumer debt load in Canada at an all-time high, it is unfortunately not surprising to see companies popping up everywhere offering solutions to your debt problems through a debt settlement. But be wary; unlike consumer proposals, bankruptcies and debt consolidations, debt settlements, depending on the company, can sometimes come with more negatives than positives. This 4^th blog in our ‘getting out of debt blog series’ looks at the debt settlement, giving you the information you need to help you make the right decision about solutions to your debt problems.

What is a debt settlement? A debt settlement is just that – the settlement of your debts. This settlement involves a negotiation with your creditors to reduce the amount of the debt you are required to pay off.

A debt settlement will in almost all cases involve paying the settlement amount in a single instance. In most cases the collection agency representing your creditor can accept less money from you than you owe to settle your debt. We have seen collection agencies settle debt for as little as 50% of the amount that was owed. That being said, regardless of whether it is the collection agency or a creditor that is willing to consider a debt settlement, they will want to receive the settlement money in full.

Often consumers won’t have the money to pay the settlement in full. This has spawned an entire industry of debt reduction companies. These companies will accept monthly installments from you over time with the promise that once you have remitted enough money they will settle your debts. This is a risky proposition. Instead, do your due diligence because if you are remitting to a debt reduction company and they go out of business in the future your money may not be secured.

There are several reputable companies out there that offer financial consulting and can help you to settle debt with your creditors without risk to you. These companies, experienced with consumer debt solutions, will represent you fairly and help you establish a plan to settle your debts without you giving money to them on a monthly basis.

Avoid being taken advantage of by doing research and avoiding companies who bill themselves as debt reduction specialists or companies. Look for positive reviews from consumers and see how much of an online image they have established to ensure that you are working with a professional organization that has staying power.

How will a debt settlement affect your credit? As with any debt solution, a debt settlement is recorded on your credit report and may bring down your score. That being said, if you are considering debt settlement the impact on your credit rating is likely no worse than the damage already done. Once you have settled your past bad debt you can begin the process of rebuilding.

If you are considering a debt settlement as a way of getting rid of your debt, there are a number of things to consider, but the most important is the company itself. Just because a company promises to settle your debts it doesn’t mean that they will do so the right way. Make sure that you do your research and make inquiries. Working with a trustworthy debt settlement company will make all the difference, keeping you protected throughout the process.

If you need help getting out of debt or would like to find out more about your debt settlement options, please contact DebtCare Canada today by calling 1-800-890-0888.

Getting Out of Debt Blog Series #3: Debt Consolidation

When debt is taking over your life it can be difficult to see the light at the end of the tunnel. Mounting monthly payments that include mostly interest can become difficult to meet and missed payments can lead to collection calls or other enforcement action. You are not alone – many Canadians are dealing with heavy debt loads and don’t know where to turn. This 3^rd blog in our ‘getting out of debt blog series’ talks about debt consolidation and provides you with the information necessary to help you determine whether this is the best route to take for getting out of debt.

What is debt consolidation? It is pretty straightforward – a consolidation of your debt into one monthly payment, saving you thousands of dollars in interest and making the monthly payment far more manageable. It is a loan given by a financial institution which allows you to pay off all of your unsecured debts to creditors at once (secured debts such as car loans or mortgages are typically never included).

A debt consolidation can be achieved through a secured or unsecured loan or line of credit. Secured consolidation loans often involve a house, vehicle, investment or guarantor as security.

Obviously if you obtain a debt consolidation, your credit is paid off and the result will be no further collection or enforcement action by your creditors. Debt consolidations will also in some cases lower your interest rates and monthly payment. If you have damaged your credit, or are having enforcement action taken against you by your creditors and have no assets to pledge as security – being approved for a debt consolidation can be challenging.

Debt consolidation is not for everyone. Often in order to qualify your credit needs to be acceptable since the institution lending the money will want some indication that you will be able to make the required monthly payments. If your credit rating is less than stellar it might be more prudent to consider some other alternatives. The more bruised your credit is, if approved, the higher the interest rate on the debt consolidation will be, which may leave you in no better shape than when you started.

A smart way to determine how best to approach your ‘getting out of debt’ solution is to speak with a professional debt consultant, one experienced with helping Canadians find effective forms of debt relief. A consultant will be able to go through all of your financial obligations to help determine what means for getting out of debt are best suited to your unique situation. He or she will also be able to get the ball rolling and get you started on a debt-free road as well as help you to budget realistically for the future.

If you are in debt that you feel is becoming tough to manage it is probably time to consider getting some help. Don’t wait until the debt takes complete control.

For more information about debt consolidation or getting out of debt please contact DebtCare Canada by calling 1-800-890-0888 or visiting us online at www.debtcare.ca.

Getting Out of Debt Blog Series #2: Bankruptcy

There are thousands of Canadians facing a mountain of debt that can seem impossible to overcome. For many individuals, it can often seem as though there is nowhere to turn as far as getting out of debt – but there is hope. It never helps to ignore the problem or let the stress of high debt levels control your life. The second blog in our back-to-basics ‘getting out of debt blog series’ looks at bankruptcy, and can help you better understand if this might be the best solution for your financial woes.  

What is bankruptcy?

Bankruptcy in Canada is a legal process and is governed by federal law under the Bankruptcy and Insolvency Act. Like a consumer proposal, a bankruptcy must be conducted by a licensed trustee in bankruptcy – you cannot negotiate one on your own. The role of a trustee is to ensure that both you and your creditors are protected, so they will negotiate the terms of your bankruptcy and administer it accordingly.

When you file for bankruptcy all of your assets, which include investments, property and your income, become the property of your trustee while you are “undischarged.” This means that if you have equity in your assets, or your income exceeds what is the allowable minimum, you will be subject to surplus income. Surplus income means that 50% of any income you earn over the prescribed minimum and 50% of any equity in assets will have to be paid to your estate to be distributed to your creditors by your trustee. During the undischarged period you will have reporting obligations to your trustee which includes reporting your income.

In Canada, and in the case of a first time bankruptcy – if there is no surplus income you will only remain undischarged for 9 months (if you meet any additional terms in your bankruptcy); if you have surplus income you will remain undischarged for at least 21 months. If, at the end of 21 months, you have not re-paid your surplus income into your estate you will remain undischarged until you do.

While bankrupt, additional terms in your bankruptcy will include not only disclosing income but also reporting on living arrangements, family situation, etc. You will also be required to attend credit counselling sessions and report any monies borrowed (over $500). 

To qualify for bankruptcy in Canada you must meet certain conditions, the foremost of which is that you must be insolvent. To be insolvent means that you owe at least $1000 and that you are unable to pay the debts as they are due.

Will filing for bankruptcy affect your credit? Yes, since your credit report is the document which contains all of your borrowing activity and credit behaviour. When you file for bankruptcy your credit score will change from being a number to being an “R” reject score until you rebuild your credit. The bankruptcy will show on your credit report for 6 years following discharge. That being said, if you are seriously considering filing for bankruptcy your credit has most likely already suffered, and so cleaning it up will take time.

Also, you can often qualify for credit within 2 years of being discharged from bankruptcy with up to 2 years of solid re-established credit.

Contrary to popular belief you can file for bankruptcy and keep your home and vehicle. Because the trustee represents you and your creditor it is important to have your own representation through the bankruptcy process. Bankruptcy can be complicated and having an expert in your corner will ensure that you are prepared for all eventual outcomes and don’t go to the trustee without already having your plan in place.

For more information about getting out of debt or to find out if you qualify to file for bankruptcy in Canada, please contact DebtCare Canada at 1-800-890-0888.

Getting Out of Debt Blog Series #1: Consumer Proposal

With summer winding down and consumer debt levels remaining at all-time highs, we thought it was a good time for a back-to-basics ‘getting out of debt blog’ to help you ease into fall with less worries on your plate. This first blog in the series will talk about the consumer proposal, giving you the ins and outs to help you better understand your options for getting out of debt. Other blogs in this series will focus on debt consolidations, debt settlement and bankruptcy. 

What is a consumer proposal? In a nutshell, a consumer proposal is a proposal that is administered by a trustee where you offer your creditor(s) a sum of money to be repaid over a term of 5 years. This sum could be less than the total debt you owe. Also, a consumer proposal will stop legal action being taken against you by unsecured creditors who are included in the proposal, stop collection agency harassment and freeze the interest accumulating on your debt.    

A consumer proposal has to be conducted by a licensed trustee in bankruptcy – you cannot negotiate one on your own. A financial consultant can consult with you on your financial options and if a consumer proposal is the solution you elect, he or she can co-ordinate a fair deal for you with a trustee. 

Unlike bankruptcy, once a consumer proposal is in place you have no ongoing obligation to the trustee whatsoever – you simply have to make your monthly payment. Consumer proposals can be repaid in full at any time. This is a major plus for folks who want to rebuild their credit quickly. A consumer proposal will be completely removed from your credit report 3 years from the date it has been paid in full. Beginning with a secured credit card or RRSP loan, those who make consumer proposals have many options available to them for rebuilding credit.

With anything there are caveats. A consumer proposal must be accepted by your majority creditor. Because trustees represent you and your creditors it is important to understand how consumer proposals work and to have your own representation through the process. Negotiating a proposal that is accepted by your creditor(s) and that is the best deal for you is key. Having representation ensures that you have someone who has expertise in this area to ensure that you do get the best deal and that all aspects of your financial situation have been considered.

Filing a consumer proposal is, for many people, a smart solution for getting out of debt. That being said, it needs to be approached correctly, and you will need the help of a professional to carry it out.

For more information about consumer proposals or other ways of getting out of debt, please contact DebtCare Canada by calling 1-800-890-0888.

How to Stop a Small Claims Court Action in Canada

Bad things happen to good people, and nobody intends to run into financial problems that can lead to defaulting on obligations to credit card companies. Individuals lose jobs, income, have medical problems in the family, or separate from spouses. These are just a few of the reasons why an individual might see his or her credit and finances turn into a mess that can seem impossible to clean up. 

Unfortunately, the big banks and most creditors will not be considerate of your personal situation. Your account simply represents a numbered debt to them, and so if you don’t pay them you can quickly find yourself in Small ClaimsCourt.

Most Small Claims Court actions in Canada follow the same process:

1.       Your creditor sues you by filing a claim in the Small Claims Court (depending on the amount that you owe).

2.       Your creditor serves the claim upon you.

3.       You have an opportunity to file a defence.

a.       At this point many people do not file a defence because they are ashamed and know that they owe the money and don’t want to face the embarrassment of going to court. In the absence of another plan to deal with the debt, that is the reason that you are being sued – so not filing a defense is a big mistake.

4.       If no defence is filed, your creditor can obtain a default judgement from the Small Claims Court.

5.       Once your creditor obtains a default judgement, he or she can utilize enforcement remedies that are available through the Small Claims Court, such as garnishing your wages or freezing your bank account.

So how can you stop a Small Claims Court action in Canada? If you know that you owe the money and you know that there is no way to pay the debt off, then you have two choices:

1.       File a defence with the Small Claims Court requesting a monthly payment plan.

2.       If you already have a judgement against you, you can file a motion with the Small Claims Court explaining why you didn’t file a defence and request permission to file one and then request a monthly payment plan.

Here are the challenges with the above 2 scenarios: 1) Your creditor will still have to accept your monthly payment plan; 2) Interest will continue to compound on the debt; 3) The moment you default, you creditor can obtain a judgement against you; 4) The Small Claims Court will continue to be in your life until such time as the debt is paid in full.

Fortunately for you there are programs available in Canada that are legislated options for getting out of debt, and these options may not involve bankruptcy. Leveraging one of these financial programs can stop a Small Claims Court action, even if your wages are being garnished or your bank account is frozen! These programs can reduce your overall debt and freeze interest. If you owe money that you can’t repay, don’t deny or ignore the fact that you owe the money, especially if you have been sued in Small Claims Court. The best way to stop a Small Claims Court action that has arisen from an unpaid debt and resolve your financial problem is to seek professional financial guidance.

For more information about how to stop a Small Claims Court action that is associated with an unpaid debt, contact DebtCare at 416-907-2582 or visit www.debtcare.ca.

Getting Out of Debt in the New Year

So the holidays are over and no doubt the holiday bills have started rolling in. It is easy to do serious financial damage during the holidays. Debt can take a mere couple of weeks to rack up, but can take months and even years to pay off. Getting out of debt in the New Year is on many families’ ‘to-do’ lists, but getting out of debt is easier said than done. 

Your ability to get out of debt in the New Year will greatly depend on your own personal circumstances. Let’s review some of your options.

Getting out of debt the good old fashioned way. Getting out of debt the good old fashioned way will take resources because it will involve using your existing assets and cash flow to get out of debt. If you don’t have savings or investments that you can liquidate to pay down debt you will have to take a good hard look at your budget. Think of the time frame in which you would like to be debt free. If it is 24 months for example, then take your total debt, divide it by 24 months and then increase the monthly amount by 30% (to account for interest).  Do you have enough room in your budget to pay off the debt on a monthly basis?

Getting out of debt through a debt consolidation. Getting out of debt through a debt consolidation is an option for homeowners who have home equity or for those with very good credit. Though traditional debt consolidation can be a good choice for getting out of debt – the debt consolidation interest rate, fees and terms will determine whether it is the best choice for getting out of debt.

Getting out of debt through a financial program. If you don’t have assets or savings to pay off your debt and you don’t have room in your budget to get out of debt in a reasonable period of time, then an alternate financial program may be the best solution for you. Some financial programs involve freezing the interest on your debt and even reducing your debt. This can result in greatly reduced monthly payments, making the prospect of getting out of debt a reality for an individual who doesn’t have much to put towards getting out of debt.

It’s a jungle out there and with so many companies promoting different things it can be hard to know what the best financial choice is. Making the wrong financial choices can cause you to pay more in the long run and can even harm your credit. So how do you know a financial friend from a financial foe? By trusting your instincts and doing lots of research. Do they have a website? Do they have a bricks and mortar location? Do they have people following them on social media? Have you heard of them before? If you are dealing with a debt company or mortgage brokerage, is the company’s management accessible to you?

Doing your due diligence and then partnering with a financial service provider who can help you come up with a meaningful solution to deal with your debt will be your first step towards getting out of debt and enjoying financial freedom in 2013.

For more information about getting out of debt in 2013 or if you need help with your 2013 financial planning please contact DebtCare at 416-907-2582 or visit www.debtcare.ca.