How To Get Out Of Debt

In a perfect world, the following article would be a paragraph or two in length, complete with a step by step plan on how to get out of debt. In the real world, it simply doesn't work that way. Debt doesn't follow a clear set of rules that are the same for everyone. Debt is instead made up of an assortment of creditors, bills and situations that are unique to each individual or family. A one-size-fits-all debt reduction plan simply won't do.

This doesn't mean there isn't a solution to help you get out of debt. There is! What this does mean, as will be discussed below, is that the steps you need to take to eliminate your debt will depend on your specific financial situation. We understand, there can come a point where attempting to get out of debt alone can be difficult if not impossible, and you will need assistance to get you back on track. We are here to give you the assistance you need.


Situation One:

- You are able to cover all debts each month, including mortgages, car payments, loans and credit card balances.

- Ability to cover living expenses.

- You have some money left over for savings.

In this case, your finances appear to be in fairly good shape. But perhaps you want to save a bit more money then you are now, or have your eyes set on a special vacation or purchase, or need to set more money aside to provide a strong cushion should something change in your financial situation.

A good place to start would be to use our helpful Budget Planner and Budgeting and Debt Calculator. This tool will provide you with a clear picture of where you are spending your money now, and where you might be able to make changes, leaving you with more money at the end of each month. Sometimes simple things like taking a bagged lunch to work or taking transit could make a sizable difference to your overall financial freedom. Although these specific suggestions may not apply to you, you should be able to find cost savings that do apply to your individual or family income situation.

Situation Two:

- Only making minimum payments each month or missing payments.

- Difficulty covering basic living expenses.

- Possibility of wages being garnished.

- No money left over for savings.

- Creditors may be calling.

If any of the above describes your financial status, you are likely feeling the effects of debt seeping into other aspects of your life. Stress levels have likely increased, and you might be cancelling or avoiding social or family activities due to a shortage of funds. You could be screening your phone, trying to avoid creditor collection calls. Creditors may be planning on taking or already have taken legal actions against you, and possibly garnishing your wages. At this stage, it is a good possibility that budgeting may not be enough. Creditors are closing in and you need to do something soon to get your feet back on solid ground.

If this describes you situation, we recommend giving the team at Bromwich & Smith a call. We have the training and experience and legal authority to examine your unique debt situation and find the right debt help solution for you. Plus, at Bromwich & Smith, you will be dealing with a Licensed Insolvency Trustee, the only federally licensed debt specialists with the legal authority to administer a Consumer Proposal, a debt settlement tool that often allows you to pay back only a percentage of what you originally owed.

Unlike other debt forgiveness tools you may see advertised, creditors are legally bound by the conditions of the Consumer Proposal. They can no longer charge interest, all legal debt collection activities must stop, and they can't come back for more, no matter what changes you may see in your income, including raises, winnings, inheritance or other windfalls.

Further, some credit counselling services will meet with you, charge you a fee, and then turn your file over to a trustee to administer a Consumer Proposal, adding an unneeded cost. The Credit Counsellors and Licensed Insolvency Trustees at Bromwich & Smith have the authority to complete the entire process for you, without the need of adding additional fees to an already tight financial situation.

Situation Three:

- Unable to make payments on some or many bills

- Creditor are calling and likely threatening or already taking legal actions against you.

- Difficulty or unable to cover basic living expenses.

In this case, the sooner you act the better. A bankruptcy might be the best option for you to get out of debt. (Be rest assured, a bankruptcy is always the final option, and the team at Bromwich & Smith will thoroughly examine your situation, and determine if another option would work better, before recommending that a bankruptcy is in fact the best option for you to get out of debt).

Acting quickly is important. The sooner you start, the sooner you can start living debt free. Further, Alberta has generous exemptions in place for assets that you get to keep in cases of bankruptcy. So, you want to take action before you have depleted these assets, in a spiralling attempt to get out of debt.

Give the team at Bromwich a Smith a call today or send us an email. We are here to help show you how to get out of debt and start believing in your debt free future today. Your initial consultation is free.

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