Solutions for Credit and Debt Problems Canada - Detroit Bankruptcy Takeaways
Whether it’s an entire American city, or an average household in Canada that can’t pay its bills and credit cards, the debt solutions are similar.
It’s no secret that Detroit is the latest big city to declare that they are in financial trouble. Detroit filed for bankruptcy because they owe more than they can afford to pay back. If you’re looking at your own bills and are wondering how you’ll ever be able to pay them all, in a small way you’re facing the same situation Detroit is also facing.
As Detroit works through the American bankruptcy process to get back on track, the same steps apply to anyone who wants to regain control of their finances.
Here’s what we can learn about personal money management and how Detroit's insolvency lead to bankruptcy:
Pay Your Rent, Mortgage and Utilities – The Basics Come First
Take care of your overhead. Detroit ran out of money to maintain the city’s infrastructure, like roads and buildings. We need to pay our rent, mortgage and utilities so that our home isn't in jeopardy.
If you can’t pay your mortgage and are faced with the possibility of losing your home, here are some solutions to avoid mortgage foreclosure in Canada.
Budget for Living Expenses – Take Care of Those You Love
Look after yourself and your family. Detroit must pay salaries, pensions and benefits for its employees. We need to buy groceries, make car payments, have a little money for entertainment, give our kids their allowance and save for unexpected and future expenses.
Use a Monthly Budget and Avoid the Need to Seek Solutions for a Potential Debt Problem
Our personal budget should allow us to manage our regular living expenses. If it gets to the point where you need to rely on credit to make ends meet, you need to look at your options so that you don’t end up facing the same dilemma as Detroit.
Get Back in Control of Your Debt - Ask for Help from Credit Counselling Services in Canada
Deal with debt. It has been reported that Detroit owes $11.5 billion. While an individual household thankfully owes much less, when you can’t pay your student loans, credit cards, lines of credit, overdrafts and personal loans, they can all add up to feel like a million dollars.
If worrying about your debts is keeping you awake at night, ask for debt relief from a trusted non profit credit counselling service. You’ll have more options available to you the sooner you ask for help, so don't hesitate to reach out.
Canadian Debt Solutions That Don’t Mean Getting More Credit
Find debt solutions that will work in the long run. As Detroit found out the hard way, you can’t borrow your way out of debt. Getting more credit digs you further into the hole, whether you’re a big city or just one household in Canada. To get rid of debt, you need to cut your expenses or even sell some assets, so that you’re spending less than you earn.
In Canada, we have quite a number of debt solutions, and many don’t require getting new credit. They are worth considering, especially if you think that your debt problems are big enough to warrant declaring bankruptcy.
These alternatives to bankruptcy include:
- debt management programs
- debt consolidation
- debt settlement
- dealing with creditors to stop collection calls
- consumer proposals
A reputable non-profit credit counselling service can answer your questions and give you more information about each option as they go through a financial assessment with you. Many people really don't know much about these different alternatives to bankruptcy, so don't wait to find out more.
Related Information About Credit Counselling and Debt Solutions in Canada
- How does credit counselling work and what debts are accepted?
- What is the difference between credit counselling versus a debt settlement?
- Which Credit Card Debt Solutions and Counselling Services?
Managing Credit and Personal Finances to Find Debt Solutions in Canada
While it might seem that the Detroit credit crisis is far removed from our day-to-day lives here in Canada, it highlights the fact that anyone having financial difficulty may need to seek debt solutions at some point. Furthermore, part of the fallout from the Detroit bankruptcy crisis will likely affect those who were banking on receiving their sole pension income from their city pension plan. You never know what can happen, so it's a good idea to start planing now so that you can retire debt free and with cash in your own savings account. These employees will now need to reconsider their retirement plans and find ways to pay debt off during their working years.
Even if you can’t identify with what Detroit is facing, learn from their mistakes and take steps to manage your finances well.