Six Options to Pay Your Debt

Are you having a problem with your debt? Then you’re not alone. Face your debt now. Shrugging it off will only get the situation worse, separating you from the peace of mind that you are hoping for.

Paying out your debt and making sure your spending in under control can improve your financial and overall well-being. Although there’s no quick fix for getting out of debt fast, the path to finding your financial peace of mind can be broken down to a few key factors.

Here are six ways to get out of debt from bankruptcy trustee in Victoria BC Gareth Slocombe and be more considerate when it comes to your spending:

Pay On Your Own

Paying your debt on your own involves evaluating your debt. This means making a plan on how to pay off your debt and making that plan work. It may be a good idea to talk to your creditors and lenders to create a payment scheme or to ask for a lower interest rate. You are accountable for paying your creditors or lenders every month. The time and means you pay off your debt will depend on you. Both your secured and unsecured debt must be in included in your repayment plan.

Consumer Credit Counseling

A credit counselling agency will come in handy when it comes to paying your debt. They can help you by sticking within your budget to come up with an easy and attainable payment scheme. A credit counselling agency will produce you a debt management plan that normally includes a low minimum payment for your creditors and with a low-interest rate. Credit counselling typically takes about 3-5 years. This means that you will not be able to use your credit card during this time frame. Although your credit report will be updated showing that you have availed credit counselling, your credit score will not go down.

Debt Consolidation

Debt consolidation pertains to combining all your debt and turns it into a single monthly payment. There are types of debt consolidation programs that will create a loan that will be used to pay off your unsecured debt. However, you must have a good enough credit score to get this new loan. Meanwhile, other types of debt consolidation operate like consumer credit counselling where your monthly payment will be combined into one.

Debt Settlement

If all goes well, a debt settlement can help reduce your total debt by 40%-60%. The way this work is that you will pay a monthly fee to a particular debt settlement firm, who will negotiate a lump sum payment that is lower than the full amount you owe. After a settlement has been reached between the debt settlement firm and your creditors, the money you have been sending to the firm will be used to pay the settlement. There’s a catch if your creditors and debt collectors will not accept the settlement offer, there’s no guarantee that you will get your money back.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is another option where you can receive total relief from some or all of your unsecured debts. You will go through test and credit counselling to show that you don’t have the means to pay your debt on your own. Most unsecured debt can be erased in bankruptcy, but child support, student loans and tax debts can be availed through bankruptcy.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is another type that lets you pay your debts in 3 to 5 years. Any remaining debt after Chapter 13 bankruptcy is complete will be wiped out. Same as with Chapter 7, you will undergo credit counselling to avail of Chapter 13. In Chapter 13, you have to pay child support and alimony, certain tax debts, any wages owed to employees, your regular house and car payments, and any back payments you have on your house and car.

Contact G. Slocombe & Associates Inc. if you are filing bankruptcy Victoria BC.