The Debt Doctor:High Personal Debt Levels Should Be a Concern
John Thompson BDO Canada Limited for local2 sault ste. marie
September 18th, 2012 at 10:00am
So should the concern over carrying high debt exist?
I believe the answer to this question is absolutely YES. Not only because of the potential for the interest increase risk but also because of the general economic instability that exists not only in the Sault and area but across our Province. I believe that the current job loss numbers and unstable employment conditions being reported are of greater concern than an interest rate increase. Think about your own situation if you were to lose your job today. Your ability to pay debts would be much more difficult given your reduction in income, employment insurance waiting periods, and the likelihood that finding a new job could take a fairly long time.
What can you do now to help reduce these risks?
Get organized NOW. Make a list of all of your debts, their balances and interest rates.
Determine pay back timing based on the payments you are making now. Will the debt be paid off over a reasonable time? Is interest taking up most of your payment without any real reduction in the amount of debt?
Consider options to reorganize your debts. Are you able to consolidate debt and take advantage of the current low interest rates?
Consider formal reorganizing options including filing a consumer proposal to eliminate high interest rates and repay debt over a reasonable period of time. Creditors often accept a reduction in the principal as part of the consumer proposal process and the interest on these debts would STOP if the consumer proposal is accepted by your creditors.
Talk to an expert. Sometimes it takes some fresh eyes to review and discuss your situation. Often, we can provide you with customized options and solutions.
None of us have a crystal ball to forecast the future, but being prepared for anything can soften the blow should an unexpected financial event occur in your future.
If you would like to discuss your specific situation we are always happy to answer your questions. Drop me an email with your question at firstname.lastname@example.org or contact us for a free initial consultation.