Common causes of personal insolvency
Credit card debt
Credit cards can be useful in certain situations. However, its use can also become a dangerous trap. You’ll tend to use money you don’t have. Of course, you’ll then have to pay back your loan. Interest rates are high. Also, there are minimum payments to honor. It’s easy to fall into a never-ending cycle of debt and poor expense management. In some cases, unforeseen circumstances make the situation even worse.
Student loans
Some students have to take out loans to finance their studies. They then enter the job market with huge debts on their backs. The situation becomes problematic if income is low. They face major difficulties in repaying their loans. In addition, payment deferrals aggravate the situation. This lengthens the credit period and increases the total amount to be repaid.
Housing difficulties
Unpaid mortgages can quickly lead to insolvency. The same goes for overdue rent. You postpone your monthly payments. But there are deadlines to be met. The amount to be paid later will then be higher. Now imagine you’ve lost your job. Or if you have a medical emergency. This can lead to serious financial difficulties. Hence the risk of insolvency.
Possible ways out of personal insolvency
As we said earlier, it is possible to get out of personal insolvency. Here are a few solutions to consider, depending on your situation.
Find additional sources of revenue
Drawing up a budget
Want to regain control of your finances? In that case, start by drawing up a budget! This is the best way to plan your debt payments. You can track your expenses and adjust them if necessary. We recommend the use of financial management applications. This will make your job easier. We also recommend that you learn the basics of money management.
Opt for debt consolidation
Debt consolidation involves combining all your debts into a single loan. The interest rate and monthly payments are then lower. It’s also a great way to simplify your loan repayments. However, it’s essential to really understand how it works to determine whether it’s right for you. Only a financial institution can grant you debt consolidation.
Conclusion: use our services!
If you are unable to turn your financial situation around, at Demers Beaulne Inc. we offer several options for managing this situation, including a consumer proposal or, ultimately, bankruptcy. Don’t hesitate to contact us to find out what we have to offer.
