As the cost of living continues to rise, Canadian household debt has reached staggering new heights.
Many Canadians are currently finding themselves unemployed or with reduced working hours as the economy continues to recover from the COVID-19 pandemic. To help make ends meet, they are turning to debt to pay their monthly household expenses.
Are you struggling with your finances? If so, you aren’t alone. A recent study found that nearly half of all Canadian employees are living paycheque to paycheque.
If you’re struggling to meet your debt payments and find yourself overwhelmed with stress and anxiety, you might want to consider some debt relief options.
Debt management plan
A debt management plan is a process that credit counsellors can offer that will consolidate your unsecured debts into one manageable monthly payment, with reduced or frozen interest payments.
The credit counsellor will contact your creditors and negotiate a settlement that can give you up to five years to pay back your debt. You will make your monthly payments, and the credit counsellor will distribute the money to your creditors until your debt is paid off.
This approach allows you to only focus on making one monthly payment, so you don’t have to juggle deadlines and worry about various due dates and interest charges.
It will also allow you to pay less interest because your debt counsellor will help negotiate a reduced interest rate. A debt management plan can also help you see a clear path to financial freedom for a debt-free future.
Other debt relief
If you’re struggling with credit card debt or outstanding student loans, there are several options to address those types of debt as well.
For student loans, the Government of Canada offers a Repayment Assistance Plan to reduce your student loan payments. There is also an option to extend the term of your loan to reduce your monthly payments.
If you have significant credit card debt, there are also options to negotiate the amount you owe. One such potential course is a lump-sum payment agreement, which can be negotiated with the company to receive a lump sum of money less than you owe in exchange for eliminating your total debt.
iCASH is an online loan provider in British Columbia that provides financial help.