Being in debt can be incredibly stressful. The logistics of just trying to remember who you owe money to and when you have to pay them are enough to drive you crazy, but on top of that you have to deal with all of the uncertainty, fear, sacrifices, and damaged relationships.
If you’ve ever felt overwhelmed by your debts, you’ve probably considered bankruptcy. To many bankruptcy sounds like a free pass. You go crazy into debt, and then miraculously you’re free!
The truth is that bankruptcy is the most extreme option to take, and will take the longest for you to recover from. Luckily, there are many options between where you are and bankruptcy that can help you in more efficient ways and with fewer long-lasting effects.
What Is Debt Relief?
A debt relief program takes a look at your specific situation and determines where you’re struggling and how best to help you. Depending on the program you go with, this can simply help organize your debts so they’re easier to manage, or you may be able to reduce the amount you owe, lower the interest rate, consolidate payments, and ultimately avoid bankruptcy.
Struggling To Keep Up
If you’re trying to pay everything off and actually have an income to do that with but are simply getting knocked over by the number of payments you need to make, debt consolidation may be the best solution for you.
Debt consolidation is basically a loan you take out for the total amount of your debt. Using that money to pay off all of your loans, you end up with just a single debt which you can pay back monthly.
Also, by negotiating the terms properly, you may end up with a lower overall interest rate, and you’ll also be able to negotiate a payback plan that fits your budget. You’ll stop struggling and start feeling in control again.
In some cases, consolidating simply won’t be enough. If you’ve lost your job, had unexpected medical expenses, or other financial disasters, you might need more serious help.
In this case, debt settlement might help you more. With debt settlement you work with your creditors to have a portion of your debts forgiven. By owing less overall, as well as lowering interest rates, you’ll be able to pay off your debts with less money and be out of debt faster.
Other services may be available to you if you’re in trouble. Credit counseling can also help to reduce your interest rates, but you’ll have to watch out for negative consequences to your credit score.
The last step before bankruptcy is a consumer proposal, which is a sort-of combination between the above options and bankruptcy.
If you’re truly feeling overwhelmed by your debt, you owe it to yourself to speak with a professional. They have tons of experience dealing with situations like yours, and will be able to advice you properly.
To learn more about your options, go to http://www.debt.ca.