What To Do If You Have Trouble Making Debt Payments

5 July 2023

Canada Debt Help | 5 Steps to Getting Out of Debt in Canada

Debt can be overwhelming and stressful, especially when you’re struggling to make payments. But, the good news is that you’re not alone. According to the Financial Consumer Agency of Canada, 27% of Canadians report having trouble paying their bills on time, and 21% say they have too much debt. If you’re in this situation, it’s important to take action before your debt gets out of control. Here’s what you can do to get out of debt and form good money habits.
Assess your situation

The first step is to assess your situation. Make a list of all your debts, including the amount owed, interest rates, and minimum monthly payments. Next, calculate your total monthly income and expenses. This will give you an idea of how much money you have left over each month to put toward debt payments.

Create a budget

Once you know your income and expenses, create a budget. Start by listing your essential expenses, such as rent, utilities, groceries, and transportation. Then, factor in your debt payments and other discretionary expenses, such as entertainment and dining out. Be realistic about your spending habits and make sure your expenses don’t exceed your income.

Prioritize your debts

If you have multiple debts, prioritize them based on interest rates. Focus on paying off the debt with the highest interest rate first, while still making minimum payments on your other debts. Once you’ve paid off the highest interest debt, move on to the next highest interest debt.

Consider debt consolidation

If you’re struggling to keep up with multiple debt payments, consider consolidating your debt. This involves taking out a new loan to pay off all your existing debts. This can simplify your payments and potentially lower your interest rate, which can save you money in the long run. However, it’s important to do your research and make sure you’re getting a good deal.

Seek professional help

If you’re still having trouble making debt payments, consider seeking professional help. There are many debt relief options available, such as debt settlement, credit counselling, debt management plans, and consumer proposals. These options can help you get back on track and reduce your debt over time. However, it’s important to do your research and work with a reputable organization.

Form good money habits

Getting out of debt is just the first step. To avoid falling into debt again, it’s important to form good money habits. This includes creating a budget and sticking to it, avoiding unnecessary expenses, and building an emergency fund. It’s also important to track your spending and regularly review your budget to make sure you’re staying on track.

Ironically, people struggling with debt often make considerable effort to pay their bills on time. The result is someone deep in debt with a top-notch credit rating. Those struggling with debt often believe that they can take pride in the fact they’re paying their bills and getting by, hoping to eventually pay off the debt when in reality, they are on a path that often has no end in sight.

Here is why: Someone owing $20,000 is paying anywhere from $600 – $800 a month, just to service the debt. At that rate, it could take 10 to 25 years to pay the debt. They may have a solid credit rating, but their bank account is emptying at an alarming rate. In other words, the debtor’s stellar credit rating is decimating his or her bank account.

Our Debt Relief Program provides individuals with a legal means of repaying their debts while still carrying on with their lives without losing everything.

In conclusion, getting out of debt can be a long and challenging journey, but it’s worth it in the end. By assessing your situation, creating a budget, prioritizing your debts, considering debt consolidation, seeking professional help, and forming good money habits, you can take control of your finances and achieve financial freedom. Remember, it’s never too late to start.

Takeaway: Paying off debt is challenging, but there are resources that can help you figure out a plan that is right for your life and situation.


Book a No cost consultation with our certified counsellors today.