Dealing with debt can be a very stressful experience. Here are five options to consider as a starting point.
1. Consolidating your debt:
Speak to your bank about the possibility of consolidating your debt into one payment with a lower interest rate. This may be helpful especially if you are carrying debt on credit cards or other high interest loans. Lowering your interest rate will allow you to pay down your debt faster and consolidating into one payment will make your spending plan easier to accomplish.
TIP: Ask your financial institution to match your loan payment dates with your payroll pay dates to make monthly cash flow planning easier.
2. Tracking your spending and making a plan:
A monthly spending plan can help determine your monthly expenses and where you are spending your money. You may be surprised where you may be able to cut back in order to pay down debt and enhance your savings plan. If you have consolidated your debt, you will want to avoid increasing debt so you considering putting together a spending plan that matches your income. Review your spending habits from your tracking exercise and determine where you can make some changes. There are many online budget calculators and spreadsheets available, you may want to start by looking at the Financial Consumer Agency of Canada website.
3. Building yourself a savings buffer:
In addition to paying down debt, building a savings plan for those unexpected events or emergencies is a good idea. Speak to your financial institution about setting up a savings account where you can make automatic contributions. It’s important to “pay yourself first” when it comes to saving for retirement and other events.
TIP: Have the automatic contributions match your payroll pay dates.
4. Read up on your rights when it comes to debt collection
We license and oversee the behaviour of debt collection agencies and debt collectors. Getting collection calls can be stressful and you have rights. The law speaks to when a collector can contact you and how they can communicate with you. For example, you can request that a debt collector communicates with you in writing only so you no longer receive phone calls. Keep in mind that this does not mean the debt has gone away. You can learn more about this on our website.
5. Speak to a professional:
There is support available from a number of organizations and financial or debt repayment professionals. There are many options to choose from, so it’s important to do a little research first – find out what sectors are regulated, which options may be non-profit, and look into what services are provided at what cost.
There’s a lot to know and many resources at your disposal related to debt management. Only you know what’s right for you.
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About Consumer Protection BC:
We are responsible for regulating specific industries and certain consumer transactions in British Columbia. If your concern is captured under the laws we enforce, we will use the tools at our disposal to assist you. If we can’t help you directly, we will be happy to provide you with as much information as possible. Depending on your concern, another organization may be the ones to speak to; other times, court or legal assistance may be the best option. Explore our website at www.consumerprotectionbc.ca.