Recently I sat in on a seminar to learn about one of our partners called Debt Medic. I was impressed with how they go about their work. It is one more tool that I get to offer as support for those I work with. Debt Medic helps provide a path for those who are struggling with debt.
You know as well as I do that Canadians are increasing their debt load. Carrying that Debt can bring stress that hangs over one every day. Perhaps you know someone having a large debt load; Debt Medic may be a path to help them.
There is no one-size-fits-all in dealing with debt. In the seminar, the speaker shared eight options that people debt have to deal with debt.
Let me give you a quick overview.
1)Budgeting and Debt Snowball. – This is about paying off debts from the smallest to largest and putting extra money towards one debt and as each is paid off, money moves to the next. Things start rolling, and the amount of money toward debt gets bigger, and debt is paid off faster.
2)Selling Assets – Selling off vehicles, toys or property, etc. It is not always an option, but it is an option.
3)Bank Consolidation Load – This may help give a lower interest rate, but one may have more debt in the end. One challenge for many will be qualifying, and many will be denied. It may be an option for a small number of people.
4)Re-Mortgage/Home equity lines of credit. – The challenge here is you still have to qualify, and it just extends a mortgage long term. It is an option, but not for many.
5)Bankruptcy. This is the last resort, and some pitfalls come with this option that stays with you for some time. Your assets are at risk, affecting your credit for many years after.
6)Credit counselling – Often, there is a cost to this, and not all creditors will participate.
7)Consumer Proposal -This is governed by laws and brings together creditors, and a plan is created to repay a portion of the total debt. A portion of the debt is forgiven, and there is an ability to build credit back faster, assuming the process is kept and payments are made. If you do not stick to the plan, are consequences.
Each person is unique and needs a plan unique to them.
If you know someone struggling with their debt, they have options.
December is often a season that many take on more consumer debt. I would encourage you not to overspend and think about what is important this month.