Financial Options and Tips

When looking at options to remedy your financial problems, recognize that everyone’s situation is unique, so what may work for someone else, does not always mean it will work for you.
After you read through some of the information, please contact a licensed trustee who will assess your situation and answer any questions you may have.   A trustee will help put you on the right path.

Tips  to help eliminate your debt:


*Improve your budgeting skills*

Creating a budget is an important part of creating a healthy financial lifestyle. Budgeting is about knowing where your money is going and controlling it. Budgeting helps you set priorities to accomplish realistic goals through financial planning. It is not about pinching pennies or going without.
Budgeting can be the single most important financial thing you do as it affects all aspects of your life.

* Increase your Income*

One way to improve your personal economic situation is to increase income.  This can not only be done through increased hours at your current work, or finding a second job (FT or PT), but secondary income can come from other sources such as renting property that you own, or getting a roommate or boarder.

* Reduce your expenses*

Reviewmonthly expenses to see if there are any expenses that can be reduced or eliminated for a period of time. Reducing your recurring expenditures is a great way to increase your ability to pay down debts, or simply increase the amount of money you have to spend on other things.
Daily Coffees – approx 2 a day @ $2.00  per coffee ($120.00/month)
Message manager and call display on your phone ($10.00/month)
Eating out for lunch – average $7.00 / day ($140.00)
In this example, simply changing a few things can save $270.00 / month and can help pay down your debt.    Please understand we do not suggest you cut every extra from your budget, we simply suggest you cut the unnecessary spending,for a period of time to help you bring your finances under control.

*Contact Creditors*

If your finances are not completely behind, but you have fallen behind on payments due to a move, change in employment or lifestyle, often times, you can contact your creditors to explain your situation.  If you can suggest an alternate arrangement that may be acceptable to them, then arrangements can be made for a new payment contract.  You do not know if your creditor is willing to work with you unless you contact them.  Many creditors are willing to cooperate if you adhere to your agreement.

*Sale of Assets*

Converting your non essential assets to cash for the purpose of paying creditors is another way to help pay off debt.  Stocks, bonds or even a vehicle that you are willing to sell can enable you to make your payments.  If you are considering doing this however, we suggest you discuss this option with a professional before doing so because certain assets are protected by law as exempt assets.

Other Options


  • Refinancing Assets :  If you have equity in a large asset such as a home, you can get a second mortgage and use the money received to pay off existing unsecured creditors (Credit Card companies).  When considering this option, you should also pay close attention to your budget as it could leave you in a more difficult situation.   We suggest you speak to an expert to discuss this option further.
  • Consolidation Loan :  Many financial institutions are willing to provide consolidation loans to pay off all your outstanding debts and, in return, you make one monthly payment on that loan. The lending institution’s willingness to provide a consolidation loan will depend on your credit and income. You should compare rates at the different banks and lending institutions as rates vary. If you have not identified the original source of your financial problem and continue to spend on credit, you may find yourself in a more difficult situation.
  • Credit Counselling:  A voluntary program between you and your creditors with the help of a counsellor.  The difference is the credit counselling company attempts to negotiate the terms of your repayment and may take a fee from the proceeds you pay with their program.  With the consent of creditors, it can help, however if not all creditors agree and without a type of bind to force creditors to agree, it can leave the debtor with just as much debt, and still receiving harassing calls.   Before committing to a credit counselling program, we suggest talking to a professional trustee without cost or obligation.
  • Informal Proposal:  A process where a debtor negotiates with their creditors to arrange payment terms. Creditors will usually require you to explain your situation to convince them they should consider your offer to settle the debt. Informal proposals are arrangements which might include making lower payments over a period of time until the amount is paid in full or even an agreement to pay less then the full amount in lump sum payments. If you are successful in negotiating an informal proposal you would be advised to get the new terms in writing. Informal proposals are usually the most effective when you have a small number of creditors with whom to negotiate.
  • Formal Proposal: A Formal Proposal is also known as a Consumer Proposal and is a legal procedure that allows individuals the ability to modify their payments to creditors by extending the time for payments or reducing the total amount to be paid, while at the same time stopping all interest. It is intended to provide a debtor with the ability to start over financially by eliminating most, if not all unsecured debts. It is similar to an agreement through credit counselling only it is a legal process that instantly stops creditors and sets a predetermined period of time for the creditors to vote on the acceptance of the proposal.  For a proposal to succeed it must generally offer the creditors more then they would receive if the same individual were to file for Bankruptcy.
  • Bankruptcy:  The legal process available to honest debtors who are experiencing a financial crisis over their heads.   The benefits of a bankruptcy is it’s stay of proceedings which stops all legal actions, collection proceedings, harassment and garnishments. Bankruptcyoffers a person who would otherwise be unable to get themselves our of debt, the opportunity for a fresh start.

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