Debt can be manageable; it can present the indebted with some significant challenges that will test the adaptability and mettle of a person or organization. Successfully paying off debts can leave one feeling jubilant, like they have battled - and slain - an evil giant. Generally speaking, however, if income is less than outflow at month's end, and this outflow is due to paying off interest accrued by loans and credit cards, it's time to time to assess your finances for a viable and permanent solution.
Even if minimum payments are made on credit cards, it doesn't always mean that enough principal is being paid off monthly to make significant changes to your situation. In other words, you may inadvertently become enslaved to paying off credit interest rates, creating a cycle that feels akin to being trapped in quicksand. Available options become clear: Generate more income to make larger payments on your principal, effectively breaking the mindless cycle of barely getting by, or obtaining debt relief.
Sound financial solutions can come in various forms and these are made available to individuals or businesses alike. During a consultation with a counsellor, initial discussion will focus on the type of relief that is best suited to you. These forms of relief generally include choices between a Debt Management Plan, Individual voluntary Arrangement, Debt Settlement, Equity Release, or Bankruptcy. Each of these choices are meant to alleviate your burden in a specific way, and a consultation with a counsellor can fully explain pros and cons and pinpoint the plan that will render the most positive overall results for you.
Within the context of an Individual Voluntary Arrangement, once you are deemed to qualify for the relief, debt relief institutions will help you establish budgeting and spending strategies to find out how much you need to live comfortably. Their goal is to consolidate your existing debts to a singular total amount and come up with a singular monthly payment amount that you can comfortably make over a period of several years. The idea is to dramatically lessen your monthly payment. Debtors are repaid a portion of their money and your finances are greatly simplified. There is a downside to the arrangement in the fact that filing a consumer proposal will adversely affect your credit for a while and making purchases of any kind through that avenue will initially not be possible.
On the very bright side, it is possible to re-establish a good credit rating over the next few years, by making your new payments regularly and on time. After a filing a consumer proposal it is encouraged to further rebuild your credit rating by re-applying for a credit card and using it for small purchases where the balances can be fully paid each and every month used.
A consultation with a counsellor can greatly improve your quality of life in many ways, since it not only addresses a current financial dilemma, but also positions you towards a secure future through insight, education and empowerment.