Accruing debt is a normal part of adulthood. From mortgage and car loans to credit cards and emergency loans, not all debt is bad to have. A healthy level of debt is crucial to building credit, but circumstances can change and what was once manageable can quickly slip into a different territory. But debt doesn’t have to feel like an insurmountable mountain to climb; there are options to avoid filing for bankruptcy. Here are 7 signs that you should consult a licensed insolvency trustee to help you manage your debt.
1. Your Circumstances Have Changed Considerably
Life happens, and unexpected changes to your circumstances can contribute to making what was previously a reasonable amount of debt feel like a challenge that you just can’t win. Whether you’ve lost your job, gone through a divorce, or had an accident that has left you disabled or missing work for a long period of time, an unplanned change in income or expenses can contribute to insolvency issues. If getting back on track is not foreseeable, you may want to consider contacting a licensed insolvency trustee to discuss opportunities to settle your debt.
2. You Are Getting Calls from Debt Collectors
Most initial creditors will make an effort to contact you directly to bring your accounts back in good standing, but they may contract out the work or sell the debt to a collection agency. As those companies’ business model is to collect on delinquent debts, they can be more aggressive than the in-house recovery team for your bank or credit provider. While there are many rules for them to abide by, they are allowed to contact you by phone, and will generally do so as many times as allowed within a given timeframe. If you have more than one debt in collection, this can quickly feel overwhelming and affect your everyday life.
3. You Frequently Incur Late and Overdraft Fees
Being frequently late on paying important bills or incurring overdraft fees from bills on auto-pay going through when the funds are not in your account are key indicators of financial issues. While some bills can be unpredictable, most are the same month over month. Creating a strict budget that you adhere to with an insolvency advisor may just be the help you need to stop paying penalties every month, allowing you to put more money towards debt repayment and other expenses.
4. Your Credit Score Has Dipped Drastically
Every missed payment can be a blip on your credit score, and a low score may affect you in areas you may not have considered. Not only is it harder to secure future credit – including mortgages – but it may also affect your ability to rent apartments and even secure a job in a financial field. If you notice a sharp dip in your credit score, too many missed payments or delinquent debt may be the cause. A licensed insolvency trustee can help you manage your debt and bring your score back up.
5. You Have to Prioritize Essential Services
Not having enough money at the end of the month can mean having to make tough choices. It can mean doing things like taking the bus instead of driving or foregoing a night out or two until the next payday. But if you find yourself having to pick between essentials like paying your electricity bill instead of going grocery shopping, it’s time to reach for a helping hand.
6. You Are Losing Sleep or Experiencing Anxiety
Your debt load shouldn’t keep you up at night, but a precarious financial situation can easily dominate your thoughts and affect your quality of life and mental health. Discussing your predicament with a licensed insolvency trustee and coming up with a concrete plan with manageable steps can help bring peace of mind and help you manage the negative feelings toward your debt load.
7. You Can’t Build Savings
A healthy nest egg for a rainy day is something that we should all aspire to have to ease reliance on credit cards and emergency loans with high interest rates. If, month over month, you follow your budget, pay your bills, and make the required payments on loans and credit cards but still can’t get ahead, a licensed insolvency trustee may be able to help. A debt consolidation loan, for example, can help reduce the interest rate of your various loans by consolidating it in one, helping you put more money towards the principal and pay off your debt faster.
Help Is Available
If you’re struggling with debt and need help restructuring your financial situation, help is available. With multiple offices in Ottawa and all over Ontario and Quebec, Bernier & Associates has been a key player in helping indebted Canadians thrive again. If you need help with your debt, request an appointment today and take control of your financial situation.