VANCOUVER -- These are challenging times and debt can be an added stress.
Taz Rajan from licenced insolvency trustees Bromwich and Smith joined CTV Morning Live to share debt reduction tips as we head in to the holiday season.
Rajan shared that in order to do reduce your debt, you first have to have a clear picture of what all your outstanding debts are.
Some items to consider are who you owe money to, how much the balances are, what the interest rates are and how long it will take to pay off at the current rate.
Once there is a concise understanding of debts owing, it is time to talk to creditors.
Having a frank conversation with lenders can be powerful. There may be possibilities to negotiate a lower interest rate or place a freeze on further interest charges.
It is important to remember that for them, it is easier to make an existing client happy than to earn a new one.
Once arrangements have been made with creditors, then it is time to make a plan of attack.
One method is the snowball method.
This involves paying off the smallest debt owing and then taking the minimum payments of that one and doubling down on the next highest interest debt first.
The key question to ask yourself is if you are in a posiition to reduce debt effectively on your own.
Accumulating new debt should be avoided as well.
For those still struggling and unable to get ahead, there is no shame is seeking professional help. A financial planner can see if you're on track.
If debt reduction can't be done effectively with personal measures then a formal program may be a better fit. This can be in the form of a debt repayment plan or consumer proposal.
The team at Bromwich and Smith is available to look at your financial picture and find a solution to destress by tackling your debt.
