How to Deal With Credit Card Debt
Credit Card Debt Options – There are Long Term and Short Term Solutions for Getting Out of Credit Card Debt.
In Canada there are millions of people that carry balances on a credit card, or multiple credit cards. With high interest rates, carrying a balance on credit cards can cause you to pay thousands of dollars in interest charges each month.
Short Term Options For Dealing With Credit Card Debt
If your credit card debt has become overwhelming and you are having trouble making the required minimum payments then you have certain options for dealing with credit card debt. The licensed insolvency trustees of Bankruptcy Canada have provided straightforward answers on how to get out of credit card debt. There are certain plans that help you deal with your credit card debt. Depending on your financial situation you might be able to get your credit card debt under control yourself, or in other situations you might want to seek professional assistance.
We’ll explore both options.
How to Get Out of Credit Card Debt Yourself
You may be able to get your credit card debt under control with simple lifestyle changes and budgeting. If you really want to get your credit card debt under control, you can in many cases with a budget.
If you would like to get out of credit card debt on your own but you are having trouble paying down your balance, you can attempt to negotiate a lower interest rate on your credit card debt by contacting the company that issued your cards. By lowering your interest rate, you can save money and pay off your debt faster as more of your payment is going towards paying off the balance of your credit card debt. If you are behind on your payments, you might find it difficult to get your credit card issuers to agree to lower your interest.
How to Get Out of Credit Card Debt With a Debt Relief Expert
If your debts are more serious, you might want to consider hiring a debt relief expert. There are several ways a debt relief expert, such as a Trustee, can help you get your debt, including credit card debt, under control.
Orderly Payment of Debt Program
Residents of Alberta and Nova Scotia may take advantage of the Orderly Payment of Debt program in their province. The OPD is a consolidation order. When you enter into the OPD in your province, you will repay the full amount of your unsecured debt at an interest rate set at 5%. The term to repay your debt is generally 3 years. If you enter the OPD, your creditors must agree to the repayment plan and you will keep all of your assets.
Debt Settlement Plan
A debt settlement plan allows you to repay a portion of what you owe. When you make a debt settlement plan you will offer your creditors an upfront, lump-sum amount of money to have the rest of your unsecured debts written off. This method is effective for people who are unable to repay all of their debt, but have some available funds.
Insolvency Options – Bankruptcy or Consumer Proposal
After performing a financial review, your Trustee might recommend that you explore going bankrupt or making a consumer proposal in order to get out of credit card debt. Depending on your debt and the circumstances surrounding your money problems, bankruptcy, or a proposal, could be the best solution for you.
Bankruptcy is a legal process that allows people to eliminate their unsecured debt to achieve a fresh financial start. When you go bankrupt you are insolvent. In Canada, the bankruptcy process is laid out by the Bankruptcy & Insolvency Act. Our Trustees can help you explore an alternative to bankruptcy, but if your circumstances dictate they can help you go bankrupt.
A consumer proposal is a legal agreement made with your creditors to settle your debts. You need a Licensed Insolvency Trustee (LIT) to file a consumer proposal. A proposal is also governed by the Bankruptcy & Insolvency Act. When making a proposal to your creditors, you will be repaying a portion of your debt (usually about 30%) over a period of time lasting up to 5 years. All consumer proposal plans are interest-free.
How to Get Help From a Debt Relief Professional
If you are in need of help dealing with your credit card debt please contact us today. Our friendly, caring, and regulated Trustees will offer you a risk free consultation to learn all of your options for getting out of credit card debt. We have a strict code of professional ethics and the consultation meeting is free and carries no obligation. You are not under any obligation. We are here to help. Please feel free to call or email us today.