Getting out of debt can seem like an impossible feat to those who are facing financial difficulties and hardships. There are tons of different reasons for getting into debt and only a handful of solutions for getting back out. Losing a job, for example, makes it impossible to pay the monthly bills. Throw the cost of education on top of that for students who have recently graduated; and it can seem hopeless to try and keep your head above water. If you live in the Montreal area, you do have a few options that can help you start to pull yourself up out of the muck and mire of debt.
One of the first things you need to take into consideration is your credit score. You want to make personal bankruptcy a last resort because it will lower your credit score. What this means is that banks will be less comfortable in lending you any money due to fear that you will not be able to pay them back what you borrowed. This makes it difficult to get a car or home loan.
You can avoid personal bankruptcy by doing debt consolidation. When you got into deep debt, you might have gotten into debt with more than one creditor. You can make life easier on yourself by locating a trustee that can help you set up a debt consolidation program that will allow you to make only one monthly payment for your debt instead of multiple payments. The trustee will also seek to get you the lowest monthly payment possible and will decrease your interest so you won’t be overburdened by debt. You will pay your monthly payment to the trustee who will divide the money up and pay your creditors.
Another option you have that can help you repair your credit and avoid personal bankruptcy is voluntary deposit. This involves going to the local Court and making an agreement to deposit a certain percentage of your earnings to the Court. When you deposit the money, they will pay off yours creditors. This will prevent certain essential pieces of property from being seized such as stoves, bed, and refrigerators. The avoidance of filing for bankruptcy will protect your credit scores from dropping.
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I had to stop thinking about the time it would take me and I try to remember how it is going to feel when I’m completely out of debt. When I was thinking about the amount of time it would take, I would feel so discouraged that I didn’t even want to try to get out of debt. Then I pictured how I would feel and what my life would be like debt free and I realized that the little steps I would take would eventually get bigger as my debt grew less.