According to a recent study initiated by Sun Life, 65% of 1299 people surveyed in Canada, weren’t happy with the way they were handling their personal finances in the year 2012. Among them, 25% wished to do something about it and rest had adopted a strongly pessimistic approach towards their debts. With the gaining momentum of the firms that helped people negotiate their multiple liabilities and the prospects of gaining a fresh financial life through bankruptcy, the Canadians have become too lackadaisical about their soaring debt obligations. Ignoring such problems will gradually affect your mental and personal health and you might even lose your peace of mind. If you’re already scared by the shocking statistics on the soaring Canadian debt, you should read on the concerns of this article in order to know the ways in which you can tackle your debt load head on.
Warnings from the Bank of Canada is finally being paid heed to
Yes, according to reports, Canadians are finally paying enough heed to the warnings issued by the Bank of Canada to lower their personal debt ceiling. The number of Canadians with monthly loan payments that were delinquent for 3 months dropped to 2%, a record low level in the last quarter of 2012. The median credit balance dropped by 3.47% compared to the same time during the last quarter. If you’re getting dunning notices from your creditors who are warning you about the rising credit card debt defaults, here are some steps that you can take.
Figure out the debt load and the net worth: The first thing that you need to figure out is how deep the debt hole is. You can create a monthly budget through which you can see where your money is going and what kind of adjustments you can make. See the amount that you’re presently paying on your debt and the payments with which you can get out of debt sooner.
Set a financial goal: Although it might be intimidating to figure out the total debt load, you should then set up a financial goal step by step. You can either set up the debt snowball or the debt avalanche method in order to tackle the amount with the high interest rate. Whichever method you choose, you can easily come up with a better repayment plan that can facilitate debt repayment.
Stop taking on more debt: The Canadians love the habit of taking on more and more debt when they’re already drowning in a sea of debt. If you don’t want to go through the hassles of bragging with the debt negotiation companies about settling their debt obligations. You should lock in your credit cards at home so that you can easily be able to use cash instead of credit when you’re out for shopping.
Negotiate with your creditors: You should negotiate with your creditors when you’re in doubt about getting out of debt through the DIY steps. The creditors often help you with the exact steps through which you can repay your debt obligations. They can even put you on a hardship plan through which you can repay without having to fall back on other debt obligations.
Therefore, keeping in mind the strength of Canada’s economy, you can easily be able to determine the amount of consumer spending that is required for business investment. Choose to take the above mentioned steps so that you can easily get back on the right financial track.
Bank of Canada flags debt concerns and dissuades consumers from taking on more debt by Steven R Patterson