Dealing with Debt Stress: How to Get Debt Help and Relief?
Debt doesn’t just affect your finances. It’s also a significant source of stress, and it takes a major toll on your mental and emotional health. Struggling with debt can also mean that you’re dealing with stress, anxiety, and depression. It can also have a negative impact on your relationships, with finances ranking as one of the leading causes of divorce.
Taking control of your debt will change your relationship with your finances and help you deal with the stress and emotional toll that comes with it.
There are many different types of debt help that you can get and strategies for tackling it. These are some of the most common ways Canadians take control and finally handle their debts.
Talking to a Licensed Insolvency Trustee
A Licensed Insolvency Trustee is a federally regulated professional who provides advice to individuals on their debt and provides services such as filing for bankruptcy and consumer proposals. They are the only professionals in Canada authorized to administer government-regulated insolvency proceedings including bankruptcy and consumer proposals.
Trustee firms like Bankruptcy Canada provide free consultations to anyone who is struggling with debt. They go through your finances with you and discuss all of the options available to you. When you get debt help with Bankruptcy Canada, they will make sure that you choose the right debt strategy for your situation.
Debt Settlement
Debt settlement is not a government-regulated proceeding the way that a consumer proposal is, but if you have cooperative creditors, it can be a way to reduce the total amount of money that you have to repay.
With debt settlement, you try to negotiate a deal with your creditors where you pay back a fraction of the debt that you owe, and they forgive the rest. This can reduce your total debt burden. Sometimes, this works by offering them a lump sum payment so that they get a guaranteed settlement right now instead of having to go through the long, expensive process of trying to collect or risking you going through bankruptcy, a process in which they can wind up getting nothing.
However, you have to negotiate a debt settlement with every single creditor, and many may not be interested in cooperating. Their cooperation is entirely voluntary.
Debt Management Plans
With debt management, you enlist the help of a credit counselling agency to help you get on top of your debts. Instead of staying on top of multiple payments each month, you make a single monthly payment to the credit counselling agency, which then distributes it to your creditors.
The credit counselling agency can help negotiate with your creditors on your behalf. A debt management plan usually does not try to reduce the principal that you have to pay back on your debt, and that can make it easier for creditors to accept. Debt management will usually involve some kind of relief like reduced or zero interest rates, allowing you to pay back the principal without the debt growing even further.
The process provides a sense of structure and order that can make it easier to finally get out of debt.
Strategies for tackling debt can make it easier to finally become debt-free. Get the right help for your situation.
