You Owe Money —
Steps you can take today to deal with your financial situation

If you feel your financial situation is out of control, there are steps toward greater financial stability that you can take today.

By following these steps, you may find you are able to resolve the situation by yourself through a little (or a lot) of hard work, or you may find the best course of action is to seek the advice of a professional.

  1. Rework your budget—Take some time to sit down and figure out how much money is coming in versus how much is going out. Set a realistic budget and stick to it. By following your budget and paying for essentials before anything else, you will find it easier to control your spending and should find that you gradually have more money available. The more of that extra money you put towards paying down your debts, the faster you will find yourself on track toward financial well-being.
  2. Consolidate your debts—Many financial institutions offer debt-consolidation loans. A debt-consolidation loan is a single loan that allows you to pay off most or all of your creditors at the same time, leaving you with only one outstanding loan. This type of loan may also offer you an interest rate that is lower than what you are paying to your creditors, saving you money in interest charges.
  3. Call your creditors—Draw up a list of your creditors. Contact some or all of them with a proposal for reducing your payments, deferring your debts or reducing your rate of interest. If you find the idea of contacting creditors daunting, a budget or credit counsellor can assist you.
  4. If you have student loan debt, apply for repayment assistance—The federal government’s Repayment Assistance Plan (RAP) is available to borrowers who are having difficulty paying back their student loan debt. RAP helps borrowers manage student loan debt by paying back what they can reasonably afford. If you have a provincial or territorial government student loan, contact the appropriate student financial assistance office to find out about their repayment assistance programs.
  5. Sell assets—If you own something of significant value, such as high-end electronic equipment, a car or even a house, consider selling it. Remember to take into account any related expenses. For example, you may have to make repairs to your car to get it ready for sale.

If you find you are unable to get your financial situation under control through informal measures, there are formal steps you can take to avoid bankruptcy.

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