How to Assess Your Debt Situation
Assessing your personal financial situation can be, in most cases, extremely daunting.
Many Canadians often avoid taking a good look at their debt and finances, in hope that their problems will disappear if not addressed.
But the truth is, putting something on the backburner only increase the fire and at some point, you have to understand where you may be struggling financially.
Today we have put together a list of the easiest ways to assess your financial situation and debt problems, in order to understand how to successfully settle them going forward.
Calculate Your Debt
Understanding who and how much money you owe is the first step in assessing your personal debt situation.
Unfortunately, while ignorance can seem like bliss, it doesn’t take away from the fact you owe money.
The best way to fully understand how much money you owe is to dedicate time to exploring your outgoings and calculating the total amount you need to pay.
Consider Your Dependencies
Take the time to think about who relies on you to support them financially.
If you have children or even provide care for someone, they may be dependent on you to provide for them.
This will impact your debt situation as it will affect how much you can afford to pay back once you have deducted your living costs from your income.
Many lenders and debt settlement solutions will consider how many people depend on you, particularly minors, and come to a decision accordingly.
Assessing Your Debt – Income and Expenses
The easiest way to assess whether you need to seek financial support is to address your income and outgoings.
Start by writing a list of how much income you earn in total each month.
Once you have addressed your income, it’s time to write a list of your outgoings.
Write down everything that you pay out each month, from household bills to groceries, evening activities to cigarettes.
Once you have listed every expense, you will clearly be able to see whether you’re earning enough.
You might even find that there are elements that you can eliminate, things that aren’t a necessity.
Consider Seeking Help
Debt is nothing to be ashamed of.
Many people see debt as a weakness, a failure and ultimately an embarrassing situation to be in.
But this isn’t the case.
In fact, more and more Canadians are choosing to get help financially in order to settle their debts.
Once you have clearly assessed your situation, consider speaking to a licensed insolvency trustee.
A LIT can explain all of the options available to you to get out of debt.
Only a trustee can provide bankruptcy and consumer proposal services through the Bankruptcy and Insolvency Act.