How to Get Help with Your DebtOct 14, 2018
Canadians are carrying a lot of debt. The average household debt is just under $20,000, not including mortgage debt. For families who are already struggling to cover monthly costs, that debt can make affording even the basics very difficult. If your family is battling debt, here’s how to get help.
We recently published our Affordability Index report, which showed some alarming results. Respondents are feeling the financial pinch: 36 per cent of Canadians surveyed said even essentials, like heat and water, are challenging costs to cover.
Living in beautiful British Columbia has a lot of advantages - pleasant weather, picturesque scenery, and many activities for families to enjoy. But not everything is so rosy: the housing crisis continues to affect residents who have trouble securing rentals or buying property, and tax hikes and limited (and expensive) child care, threatens family security and finances. If you have debt, it can make it even harder to make ends meet.
Our poll found that women, Gen Xers, and millennials are the groups struggling the most, and nearly half of all respondents said their household income doesn’t stretch far enough to allow them to be debt free. That also means that many families are having trouble meeting their financial goals, like saving for their kids’ education, their own retirement, or building their all-important emergency fund.
How can families reduce debt?
Getting help with your debt can mean creating the financial flexibility to afford family essentials, and stay on track with long-term goals.
Speaking with a professional is a good first step. A Licensed Insolvency Trustee (LIT) can help you make sense of your debt and understand your options to reduce it. Here’s what you can expect from meeting with an LIT:
- An LIT will review your personal financial situation and talk about the options that are available to you. Those could include DIY methods suited to your situation, like applying a clear budget, or using debt repayment methods like the debt snowball or debt avalanche to reduce your debt.
- Explain the steps, advantages and the consequences of a formal debt solution, like a consumer proposal or bankruptcy. No one should file for a formal debt solution unless it’s the best solution for them.
- Assist you on an ongoing basis as you go through the process of reducing your debt.
- Show you what other resources are available to you, which you can access on your own. For example, the Financial Consumer Agency of Canada (FCAC) created a database of financial literacy topics, and tools like budgeting worksheets, online debt calculators, and retirement planning The database can help you understand how changing interest rates can affect your debt and your credit, what your rights and responsibilities are with your credit cards and lenders, or how to save for a home.
Having debt to deal with while trying to keep up with the fast-paced demands of raising a family can be tough. Getting help with your debt from a professional can reduce your anxiety and help you commit to a plan that will work.