One of the most common New Year Resolutions, right after going to the gym, is becoming debt-free. It’s a dream for millions of Canadians who owe student loans, mortgages, car loans, and credit card debt. The debt to income ratio of the average Canadian is now 169.4, a number that’s nearly 25% higher than it was ten years ago. More and more Canadians are taking on more debt than they have a reasonable hope to pay off.
Becoming insolvent is something that can happen to all kinds of Canadians for a variety of reasons. While most people assume that people going bankrupt have shopping or gambling addictions or other personal struggles, some of the most common reasons Canadians become bankrupt are personal injury, sickness, job loss, or supporting a loved one through one of these.
Many types of debt are unavoidable to most Canadians, especially student loans. You have to go into debt just to start off in life. But that doesn’t mean you’re helpless to get out of it. If you feel as though debt is mounting out of control or realize that you would quickly be in financial trouble if you lost your job or part of your income, it’s time to realize your dream of going debt-free.
If you owe a lot of debt or many different types of debt (student loans, mortgage, pay day loans, credit card debt, utility bills), you may need help with your debt situation from a professional. Before you start applying for debt consolidation loans, consider your alternatives. A Licensed Insolvency Trustee such as our firm, David Sklar & Associates, can help you get out of debt without just switching one loan for another. Whether it’s through our credit counselling services or a Consumer Proposal, we can get you started on the path to freedom.
This New Year, here are a few tips from David Sklar & Associates to help you get out of debt:
You’ve probably heard it a thousand times, but there is no more effective way to manage debt than budgeting. Budgeting is a key skill that you learn in credit counselling with David Sklar & Associates along with debt management. Where budgeting is about controlling your expenses, debt management is about finding a smarter way to pay off debt. For example, one effective way to make a dent in your debt is paying off more than the minimum payment and focusing on your most expensive debt first (i.e., the debt that adds the most interest every month).
Once you have a job and start making a real income, it can be difficult to keep living the student lifestyle. But if you’re still in debt from student loans, it’s not a bad idea to keep living with a roommate or in an affordable city, keeping the same furniture you’ve had since your freshman year, and only going out for dinner once in awhile.
Staying on top of your budget and your debts mean you can recognize when you can no longer keep up. When that happens, it’s time to learn about declaring bankruptcy or filing a Consumer Proposal.
Whatever your financial situation, this year is a great time to start getting debt free.
If your debt problems seem insurmountable – we can help. At David Sklar & Associates, our Licensed Debt ProfessionalsTM have the experience and knowledge to help you get out of debt. During your consultation, we will help you understand what your current financial situation is, how best to fix it, and how to move on to a better life. With six offices in the Greater Toronto Area – we are here to help.
Call Us Today For a Confidential & Free Initial Consultation Call 416-498-9200