Finances can get out of control quickly and you may not realize something is wrong until it’s too late. Many Canadians are in some sort of debt, and it can be difficult to find a way to financial recovery. Searching for solutions can be stressful if you’re not sure what to do, but a Licensed Insolvency Trustee can get you on the right track.
How do you know when a professional’s help is needed? Your finances are your personal responsibility, but if your stress is rising, getting help is a good investment for your financial situation. Continue reading to learn more about when you should look for help from a professional Licensed Insolvency Trustee (LIT).
When Should You Look for Help?
A professional can help you with many aspects of your financial difficulties.
You may seek help for several reasons, but financial struggles such as debt are especially difficult to deal with alone. Should any of the following situations apply to you, consider contacting a financial professional.
You Don’t Know Where to Start
If you have accumulated debt, you may not even know where to start. Approximately 31% of Canadians believe they have too much debt. Each person’s financial situation is unique and requires different care, so there is no “one size fits all” solution.
You may have accumulated credit card debt while also being behind on mortgage payments, but how do you know which to begin paying back first? Thankfully, professional LITs can help to solve your dilemma and resolve your indebtedness.
If you don’t know where to start or you don’t understand how you can begin, a Licensed Insolvency Trustee can help you learn how to get out of debt.
You Rely on Your Credit Card
It is easy to rely on a credit card for payments small or large especially during Covid purchasing. However, it can also be easy for these payments to slowly accumulate into debt too difficult to manage alone. Multiple credit cards with over-the-limit indebtedness and minimum monthly payments missed are a delinquency hazard.
Credit card debt is usually unsecured which means the debt is not tied to any collateral such as your car or home per se. Unsecured debt typically has a higher interest rate, which can put more stress on those managing debt.
According to Equifax, the average Canadian’s non-mortgage debts (including credit cards) are rising by eleven percent for credit users that have missed 3+ payments. Without proper care, credit card debt may increase until you’re unable to handle payments and your credit score is significantly affected. If you’ve accumulated credit card debt and are struggling to handle it along with other debts, it may be time to find help. The alarm bells are ringing.
Once a credit card is delinquent the financial institution may arbitrarily reassess the interest rate or demand the whole amount due.
If you are delinquent on your credit card payments your account may be turned over to a collection agent. The financial institution or collection agent may instigate legal action to collect the debt by way of a judgement. The judgement may be enforced against real property and certain personal property including wages and salary.
Your Financial Issues are Always on Your Mind
Finances are stressful and they may be on your mind when you debate between making a purchase, paying your bills, or paying off your credit card. If you have debt and you’re unsure how you can afford to pay it off, it can affect your mental and physical health.
Those suffering from financial stress are twice as likely to report poor overall health, and poor mental health can be strongly associated with unsecured debt. As many will experience financial stress, how do you know when it’s time to seek help? Feelings of stress that professional help can address include:
- Difficulty sleeping
- Anger or anxiety about your finances
- Feeling like you might “lose it all”
- Feeling as though your relationships have been impacted
If you have difficulty sleeping, eating, or focusing on other aspects of your life, your financial situation may be taking control of your life. When your finances rule your life, we recommend you contact a professional.
You Lack or Don’t Have an Effective Budget
It can be easy to become overwhelmed when you’re not sure where your money is going, though only 49% of Canadians utilize a budget for their finances. It’s extremely difficult to manage debt if you’re not tracking your expenses. Budgets can help you:
- Reduce costs
- Feel in control of your money & spending
- Find ways to pay your debt
- Set expense limits
Creating a budget will not solve all of your financial problems, but it’s a start on your path to becoming debt-free. If this is your goal, a financial professional can help you get there.
Your Path to Financial Freedom
Your finances are your personal responsibility, but you do not have to handle the anxiety of indebtedness alone. If your financial situation is causing stress, or you need guidance on your journey to become debt-free, contact our office.