In an ideal world, we live within our budgets, always pay our bills on time, and set aside some savings for a rainy day. However, the current trend of high inflation on goods and services means everything is more expensive, and we may find ourselves struggling to put groceries on the table and gas in our cars. Your after-tax dollars don’t stretch very far, making it difficult to balance your books at the end of the month.

When unpaid utility bills, credit card bills, and other debts build up over time, they gather interest and become challenging to manage. But, whether you are just falling into debt or have been struggling for some time, there are ways to improve your situation. Here are some options.

Assess Your Financial Situation

Any plan to become debt free and get your spending under control always begins with understanding your current financial situation.

How Much Do You Spend Each Month?

The first thing you will want to do is to calculate your monthly costs. Figure out exactly how much you spend on items such as rent, food, gas, utility bills, eating out, toiletries, and other incidentals.

What Is Your Total Debt?

How much debt do you currently owe? Factor in your mortgage, unpaid credit card bills, unpaid utility bills, car loans, and other loans.

What Is Your Monthly Income?

How much money do you bring in? Include income from your job, investment income, and rental income. How does this compare with your expenses and debt repayment obligations?

Create A Budget

A budget is a great way to manage your expenses. It helps to ensure that you live within your means and helps to reduce debt. Try to get creative and find ways to trim your budget.

  • Create a meal plan for the week and buy only the foods you need
  • Check out the weekly grocery deals and base your weekly menu around food savings
  • Bring a packed lunch to work instead of eating out
  • Combine errands wherever possible to save on gas
  • Cancel any streaming services or apps that you may not be using

Once you have trimmed your expenses and factored in your costs, create a realistic budget and stick to it. Don’t forget to set a little aside in a savings account for any unexpected expenses that arise during the month.

What To Do When You Can’t Manage Your Debt

If, after figuring out your income and expenses and creating a budget, you still cannot repay your debt, there are several debt-relief options that you can consider.

Debt Consolidation

In the debt consolidation process, you take out one loan to cover the total amount of your debts. You then pay off each debt entirely, with just one loan to pay back. This is much easier to manage than paying several smaller loans on different dates with varying interest rates.

Debt consolidation is advisable when you have multiple loans or sources of credit that need to be repaid. These include:

  • Credit card debt
  • Payday loans
  • Car loans
  • Unpaid bills

These sources of credit often incur high interest, so you will want to pay them off as quickly as possible.

What Do I Need To Qualify For a Debt Consolidation Loan?

We recommend Debt Consolidation when:

  • You have a sufficient credit score to qualify for a debt consolidation loan
  • You have an asset with which to secure the loan
  • You can meet the monthly payment obligations

Consumer Proposal

We recommend a consumer proposal when:

  • Your credit score is too low to qualify for a debt consolidation loan
  • You don’t have an asset with which to secure your loan
  • You cannot meet the monthly repayment obligations of the loan

Our Licensed Insolvency Trustee will negotiate with each of your creditors on your behalf to reduce the total amount of your debt. Individual debts may be reduced by up to 80%, making them much easier to pay off. 

File For Bankruptcy

When you carry significant debt, and no other debt solution options are open to you, it may be time to file for bankruptcy. Our team of bankruptcy trustees can help you navigate the process. We will work to get you out from under your debt and offer guidance to help you rebuild your financial future.

Your Licensed Insolvency Trustee In Edmonton

If you are struggling to manage your debt, give us a call. We offer a free consultation with a Licensed Insolvency Trustee and can discuss a debt management solution that works for you. We can discuss your options for a consumer proposal and debt consolidation in Edmonton.