You’ve got financial problems and are looking for a debt management solution. You are wondering if a debt management plan may help but there are other options to consider.
Which debt management program you should choose depends upon your individual circumstances. No one right plan is best for anyone. Effective debt advisors, like a trustee in bankruptcy, help you find the right debt management solution by assessing your potential situation. They may determine:
You can do it yourself. Your advisor will look at your personal budget, help you identify ways to cut your expenses and assess your debts. You may find you are able to repay your debts on your own. You may be able to contact your creditors directly to arrange for a repayment plan that will see you pay off your debts without any negative affect on your credit score.
You need a break from interest charges. If you have enough income that you can afford to pay all of your debts in full but are falling behind because of high interest rates, then you should consider two possible alternatives:
- You may be able to arrange a debt consolidation loan. You will still be paying some interest but at a reduced rate and may be able to lower your total monthly debt payments.
- A debt management plan provides you with time to pay off your debts and interest and penalties are often foregiven as part of the program.
In both of these alternatives you will pay your debts in full but because of interest savings you will be able to pay off your debts sooner.
You need principal reduction and protection from your creditors. If you cannot afford to repay your debts in full, are receiving calls from your creditors or you are facing a wage garnishment you still have options.
- A consumer proposal will allow you to repay a percentage of what you owe and provide your protection from your creditors upon filing. If you have assets such as a house or a mortgage, you can keep those assets and still eliminate your debt.
- Personal bankruptcy is always the option of last resort but in certain circumstances it is the best solution. You can eliminate your unsecured debt and it stops wage garnishments, collection calls and other legal actions.
If you need help assessing which debt management solution will eliminate your debt, contact an advisor today.