by Shelley Koehli, CIRP, LIT
January 28, 2019
There has been a lot of articles in the news lately talking about tackling debt. It is the New Year after all and it should be top of mind. According to a poll done by CIBC, 26% of Canadians say paying down debt is their top financial priority for 2019.
Statistics Canada keeps a close look at Canada’s debt to disposable income ratio and in the third quarter of 2018, stats showed that Canadians owed almost $1.74 for every dollar of disposable income. These numbers are near record breaking and are causing many Canadians to worry about their financial position.
Tackling debt repaying on your own is a great option if you have sufficient cash flow to deal with it in a reasonable time or with a few tweaks to your budget. But what do you do if you don’t have the cash flow even after you’ve tweaked your budget?
Licensed Insolvency Trustees administer options legislated by the Bankruptcy and Insolvency Act (BIA). One of the most effective options to get out of debt is by the filing of a consumer proposal.
A consumer proposal is an option that allows a person to make a settlement offer to their creditors to settle the debt, often for much less than what you owe. The benefits of this option and how it can help you realize your financial goals are:
- Negotiate and repay a portion of your debt in one monthly payment
- Fixed monthly payment without interest for the term (up to 5 years)
- Keep your assets
- Stop garnishments or collection activity
- Fees included in your negotiated payment
- Cash flow is freed up, allowing you to consider other financial goals such as long-term savings
- Personal goals are more likely to be achieved when you have less worry and stress in your life