Worried About Bankruptcy? Know Your OptionsDec 20, 2016
As you consider what your financial goals for the coming year will be, think about how you can decrease your financial stress. Canadian boomers are under a lot of financial pressure, with many carrying the weight of their own finances while also supporting adult children. If you’re having trouble paying your debt and you’re worried that you may have to file for bankruptcy in the future, make an immediate goal to learn about all of your options to get help with debt.
Many boomers are planning for their retirement, yet a quarter don’t know how their finances will work when they get there, according to a recent Tangerine study. If you’re carrying debt with you into retirement, your worries are probably amplified. Paying down debt with a restricted budget after you retire could overwhelm your finances, especially if an unexpected expense, event, or illness impacts your life. But it’s important to understand that bankruptcy is always a last resort after all other solutions have been explored. Learning about your options and setting a series of timeline-specific goals can help you take control of your finances.
In the short-term, review your finances and learn more about your responsibilities and ways to deal with your debt. Consider meeting with a Licensed Insolvency Trustee (LIT) who can show you what you can do to help reduce your debt, and decrease your stress.
You probably have more options than you realize. Restructuring your budgeting, debt consolidation, or a consumer proposal are just a few. A LIT can explain how some of those options work, including the process for each. A consumer proposal is a popular alternative to bankruptcy. A LIT works with you to help develop a repayment plan that will be manageable for you, and acceptable to your creditors. If accepted, you would be able to resolve your debts and avoid legal action from being taken against you. It also means no more interest charges, no more collectors calling, and a straightforward monthly payment that will eliminate that debt in three to five years. That could help you avoid carrying consumer debt into retirement, and reduce your financial and personal stress along the way.
There are many formal debt solution options, with varying degrees of difference between them. It’s important to learn as much about each as possible so that you fully understand the benefits and consequences before agreeing to one. Don’t let the stress of debt rush you into a decision before you’re sure it’s the right one for you.
Once you’ve done your research, met with a LIT, and considered your options, you should commit to a plan. In many cases, paying off your debt entirely will take several years, so it’s best to start as soon as possible.
A major benefit of paying off your debt is it can increase your ability to contribute to your savings, especially emergency and retirement savings. You can use a retirement calculator to discover some information about potential costs and income after retirement. And this emergency fund calculator helps you figure out how much savings you should set aside in case of emergency.
Don’t let the fear of debt and bankruptcy take control — learn all you can about all debt options, and work with a qualified professional to create achievable goals. Having a solid financial plan can decrease your stress and help you enjoy life while still meeting your financial obligations.
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