How to consolidate debt from holiday bills
rebuild your worth, book a free consultation todayBook Now
By Bromwich+Smith Staff | 1015 words | Reading Time: 5 minutes and 15 sec | Date: 2024/01/09
With the holidays complete and shopping season over for another year, how do you feel? Were you able to stay on track and on budget this year, or did you get swept up in the holiday spending pitfall that so many of us find ourselves in? If you are struggling with post-holiday debt, are you aware of your debt relief options?
Do nothing
The first option, is of course to do nothing. If your income allows you to pay off your bills every month, then you can focus your energy on other things, like building an emergency fund or saving for retirement. If, however, you’re like so many of us, carrying a credit card balance or having trouble keeping up with bills, read on. If you continue to increase your debt, you will quickly see your minimum payments increasing due to interest and fees, and you’ll see the time to pay off your debt get longer and longer. By not taking care of your debt, you will see your credit score decline which will affect your ability to secure favorable terms for credit in the future. In some extreme cases, you could be refused for a mortgage, car loan, credit cards or more. So lets explore other options, that will help build our creditworthiness going forward!
Consolidate Debt
There are many ways to consolidate your debt, ranging from transferring balances to your lowest interest credit card, to a consolidation loan. Essentially, consolidation means combining all your debts into one loan, with just one payment. This is a great option if you who have the means to pay off the debt in full, but maybe just need a little more time. However, if you don’t address the source of your debt, a consolidation loan can just delay the inevitable. If you consolidate all your credit card debt into a loan, and then continue to use the credit card and accumulate debt you will now have the original debt and new debt to pay off. This cycle of debt could quickly snowball into something you may not be able to manage.
Consumer Proposal
A Consumer Proposal is an approved government program that allows you to reduce your debt often by up to 85%! All interest charges are frozen, meaning you will not accumulate additional interest. Your creditors are required to stop calling, and any legal action including wage garnishment will end. Your debt is rolled into one, simple and affordable payment, and once approved, you have up to 5 years to pay the agreed upon total. Once it has been paid and all your obligations have been met, the remainder of your debt will be forgiven. As with any option, there are pros and cons, and it is important to speak to a Licensed Insolvency Trustee like Bromwich+Smith who can explain all of the possible outcomes.
Bankruptcy
While it is often considered the last resort, for some, bankruptcy can be the best option to eliminate debt and start over with a clean slate. Bankruptcy doesn’t need to be scary, the Bromwich+Smith team can walk you through the facts and get you started on reducing your debt today! Depending on your situation, you could be debt free in as little as nine months!
Start Today
It is important to do your own research to understand your debt relief options, which can take time. Even before you take that on, here are a few things you can do today to start paying off your debt.
1. Understand how much you owe. To make steps in the right direction you need a clear picture on who you owe and how much.
2. Review your disposable income. Look at your monthly income, and required expenses. What is left over each month is viewed as your disposable income. How are you spending it? Prioritizing debt repayment will go a long way in helping reduce debt.
3. Make taxes work for you. Perhaps you are expecting a return on your 2023 taxes, make sure to file them as soon as you have all of your documents and invest your return by paying down debt.
4. Go on a spending freeze. Post holidays, it is easy to feel burnt out regardless of how much you have spent. Try a no-spend day, where you keep your wallet at home and don’t buy anything. Only buy the essentials this month and put any extra money towards repaying debt.
We know how easy it is to get caught up in the joy of the holidays, but it doesn’t mean your bank account needs to feel the strain. Focus on your relationship with money in 2024, and repaying accumulated debt. Let’s start 2024 off with a fresh approach to money!
Click to Book A Free Consultation
Bromwich+Smith has a number of debt relief strategies to help you regain control of your finances and get your life back on track. Reach out today for a free, confidential, no obligation consultation. Bromwich+Smith’s Debt Relief Specialists are available by phone at 1-855-884-9243, Live Chat or you can request a call back at contact us page. We want to see you flourish!
FAQs:
1: How can I improve my financial situation after overspending during the holidays?
Analyze your disposable income, prioritize debt repayment, and consider a spending freeze to redirect extra money towards paying off debt.
2: What are the potential consequences of ignoring post-holiday debt?
By neglecting your debt, you risk a decline in credit score, increased minimum payments, and difficulties securing credit in the future, potentially leading to loan refusals.
3: What is debt consolidation, and how does it work?
Debt consolidation involves combining multiple debts into one loan, simplifying payments. However, it's crucial to address the root cause of debt to prevent further accumulation.
4: Can a Consumer Proposal help in reducing debt?
Yes, a Consumer Proposal, which is an approved government program administered through a Licensed Insolvency Trustee, can potentially reduce debt by up to 85%, freeze interest charges, stop creditor actions, and provide a structured repayment plan.
5: Is bankruptcy a viable option for eliminating debt?
Bankruptcy, while considered a last resort, can be an effective means to eliminate debt and start fresh. Bromwich+Smith can guide you through the process with a potential debt-free status in as little as nine months.