6 ways to deal with personal debt

Do you find yourself using credit cards as a necessity? Are you borrowing money to make it from paycheque to paycheque? Are creditors threatening to sue you or repossess your new pick-up truck?

If you answered "yes," you might have a debt problem or could have one in the future.

Here are six solutions that could help you with your debt.

1. Contact your creditors

Explain to your creditors why you can't make your payments. Ask whether you canmake a lower payment over a longer period of time.

2. Credit counselling

Contact a family or community counselling office or a credit counselling association to see whether it offers credit counselling services. It could help you create a budget and stick to it.

3. Debt consolidation loan

Your bank or financial institution will pay off your debts. You then make a single monthly payment.

4. Consolidation order

In Saskatchewan, you can apply for a consolidation order. Itsets out the amount and the times when payments are due to the court. The court will distribute your payments to your creditors. It lets you pay off your debts over three years. You do not lose assets like bankruptcy.

5. Consumer proposal

Under the Bankruptcy and Insolvency Act you can make a consumer proposal to creditors to reduce the amount of your debts and extend the time you have to pay off the debt. You could also do a combination of both.

6. Bankruptcy

It should be a last resort if you can't make affordable payments over a specific period of time. You assign all of your assets, except those exempt by law, to a licensed trustee in bankruptcy. This relieves you of most debts.

(Source: Industry Canada)