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FLM 2017: 3 of the Most Common Debt Questions Answered

There are a lot of common debt questions that Canadians would like answered.

It’s not surprising that debt is on the minds of many Canadians. According to this year’s BDO polls, Canadian homeowners admit to prioritizing home renovations over paying off debt. And Canadian graduates are expressing student debt regrets long after graduation.

One of the goals of Financial Literacy Month is to help Canadians take charge of their finances — let’s start with their debt load. Here are answers to three common debt questions:

How do I pay off debt faster?

There is no answer that has you paying off debt overnight. Debt repayment takes time, but there are definitely things you can do to be more efficient with your debt repayment.

Two personal finance writers share their tips for paying off debt faster on their respective blogs:

You can find Barry Choi’s blog, Get Out of Debt Fast With These Methods, on his website Money We Have.

Read Jordann Brown’s answer to Which Debt to Pay Off First on her website My Alternate Life.

What can I do to avoid bankruptcy?

Filing for bankruptcy should always be a last resort option. But it’s important to remember that this is an option that provides help with debt for a lot of people. Don’t hesitate to learn more about bankruptcy if you are having debt problems.

If you want to take steps to try to deal with debt load before it becomes overwhelming, try following these suggestions:

  • Start with a budget and make sure it includes a debt repayment plan
  • Cut expenses wherever you can
  • Use cash instead of credit or debit cards whenever possible. There’s something about using cash when you are making purchases that makes you more mindful of just how much you’re spending.
  • Track your spending with an app to help you stay on budget
  • Consolidate debt to make it more manageable
  • Save for emergencies so you don’t have to rely on credit

 

Will I lose everything in bankruptcy?

The short answer to this is no, you will not lose everything. Bankruptcy exemptions are different from province-to-province. That means what’s protected in one province might not be protected in another province.

You can read about bankruptcy here, but the best option if you feel debt problems are getting overwhelming is to speak to a Licensed Insolvency Trustee.

These common debt questions just scratch the surface of what Canadians need to know about dealing with debt. The best way to find the answers to questions you have about money and debt is to keep learning.

Start your financial literacy lessons by joining the conversation on social media during #FLM2017 using these hashtags too: #DebtSolutions #LITsCanHelp.



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