When debt becomes overwhelming, it can distract you from the rest of your life. Debt is stressful and it follows you around wherever you go. It can lead to fights at home and distractedness at the workplace. It can also put a hold on your goals, whether it’s a family vacation or starting your own business. Getting out of debt and staying debt-free may not be easy, but these tips can help you along the way.
#1 Avoid Interest Payments – Interest is the biggest culprit in debt overload. You can stay out of debt by avoiding paying interest altogether. If you use credit cards, pay the full balance every month. Otherwise that $20 meal out can quickly become $30.
#2 Selling Assets – Usually debtors want to avoid selling assets, especially to cover unsecured loans like credit cards. However, you can free up a lot of income to save or pay back debts by going from two cars to one or shedding other assets, particularly when you need to borrow even more to buy them.
#3 Consumer Proposals – Consumer proposals are a relatively new tool for insolvencies. They were designed for people who were earning an income but not enough to pay back their debts. Toronto-based Licensed Insolvency Trustees David Sklar & Associates tell people worried about their debt load to come in for a free consultation sooner than later. The earlier you start dealing with debt, the more likely you will be able to qualify for a consumer proposal in Ontario. Consumer proposals in Ontario do not involve losing your assets to settle your debts. Instead, you pay a portion of your debt in small monthly payments without interest. Head to the office of a Licensed Insolvency Trustee like David Sklar & Associates and ask about consumer proposals in Ontario.
#4 Reduce Your Interest Rates – It may be possible to reduce your credit card interest rates. You may be able to negotiate a lower interest rate with your credit card company by calling and asking. It helps to come prepared with negotiation tactics, such as lower interest rates from competitors, renegotiating cards you’ve had for a long time (brand loyalty), and being persistent but polite. Remember, you want the customer service representative on the other end of the line on your side, but also to be taken seriously by the company.
#5 Reduce Your Expenses – The most effective way to stay out of debt is reducing your expenses wherever possible. You can free up more of your income to eliminate debts faster and it will give you more money to save toward your next car, a home, or vacation, so you don’t have to borrow as much.
With these tips for staying out of debt you can take back control of your financial future. Everyone’s financial situation is unique and if you can’t pay your credit card bills, a Licensed Insolvency Trustee will find a personalized way for you to move forward with your financial future.