0042 - Debt Related Queston: Bankruptcy Question # 0042
Overspent at Christmas and now that the bills are arriving, what are the options?
The main thing to do if you find yourself overwhelmed with debt is to sit down and prepare a monthly budget. (cash-in vs. cash-out). From there, perform a critical review of what you are spending paying particular attention to the difference between “needs” and “wants”. (We “need” to eat, but we “want” the convenience of eating in a restaurant). Set individual and family spending goals and then use the money left over to attack your debts. If you have more than one type of debt, pay off the one with the higher interest rate first or better yet, transfer all your debt to the lower interest rate (like your line of credit) and then make one lump payment every month. If you prepare the budget for your household and realize that there simply is nothing left over every month to pay down your debts, you should seek out a professional. A Trustee in Bankruptcy assist you in offering a repayment plan to your creditors for less than 100% of your debt and stops the interest charges. This is called a consumer proposal.