Understanding Debt Denial: Why Canadians Must Face Their Financial Burdens
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Bromwich+Smith Staff | 752 words | Read Time: 3 min, 45 seconds | Date: 2023/10/31
For most Canadians, debt is something that is inevitable, whether in the form of a mortgage, car loan, or those ever-present credit card balances. It's a reality that we live with and, often, struggle to manage. But what happens when that debt begins to feel overwhelming? Even if you believe your debt is manageable, it's crucial to know that you do not need to struggle with debt, and that there are debt relief options available to you.
Exploring Your Path to Financial Freedom: Consumer Proposals
Consumer Proposals while considered a strong option for many, may not be the perfect solution for you. Consumer Proposals are a legislated program available to Canadians who are struggling with debt but don't want to file for bankruptcy. They involve working with a licensed insolvency trustee to negotiate a payment plan with your creditors, based on what you can afford to pay. Once your proposal is accepted, you make payments to your trustee who distributes the money to your creditors.
While you may believe your debt is under control, it's wise to be proactive in managing your financial concerns and investigating the array of debt relief options at your disposal.
Evaluating Your Debt Load
If you're uncertain about whether your debt has reached an unmanageable threshold, consider the following questions:
Over the last year, has your total debt: decreased, increased, or remained steady?
If you were entirely debt-free today, what would you prefer to allocate your financial resources to?
Can you comfortably afford to pay 1.5 times your minimum payments without ever resorting to your credit accounts again?
How long would it take to eliminate your debts entirely, starting today, based on what you can afford to pay above and beyond the minimum payments?
If any of these questions trigger anxiety or uncertainty, it might be a practical move to consult with a licensed insolvency trustee to discuss your financial situation. Regardless of your debt level, proactively managing your finances is essential. By exploring all the available options, you can take control of your financial situation and secure long-term stability.
Identifying the Patterns of "Debt Denial"
"Debt Denial" is a phenomenon that many Canadians experience when they refuse to acknowledge the true extent of their financial burdens. Here are some telltale signs that you might be in denial about your debt:
You compare your debt to others who are in more dire financial straits, convincing yourself that your debt isn't that bad.
You use one credit source to pay off another in order to meet your minimum payments.
You continue to spend and use credit without making substantial progress toward reducing your balances.
You discard or evade credit statements without even opening them.
You catch yourself downplaying the amount of your debt or misrepresenting what you've spent your borrowed funds on.
Taking Action Against "Debt Denial"
The path to financial well-being begins with acknowledging your debt and seeking professional guidance. Reach out to a financial expert to explore your options and create a solid plan to regain control of your financial future.
If you are struggling with your personal finances and debt levels or simply want to learn more about what options are available, 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, or contact us for a live chat.
FAQs Related Debt Denial:
1- What is debt denial?
Debt denial is a psychological state where a person ignores or minimizes their financial obligations and the potential consequences of their debt.
2- Why is it important for Canadians to address their debt?
Unaddressed debt can lead to financial stress, damaged credit scores, and even legal action from creditors. It can also limit your ability to achieve financial goals and negatively impact your mental health.
3- How can Canadians determine if they are in debt denial?
Canadians can determine if they are in debt denial by asking themselves honest questions about their financial situation and their attitudes towards debt. For example, do they avoid thinking about their debt? Do they justify overspending or prioritize short-term purchases over long-term financial stability?
4- What steps can Canadians take to address their debt?
Canadians can look at creating a budget, prioritizing debt repayment, exploring debt relief options like consumer proposals, and ultimately seeking financial guidance from professionals like licensed insolvency trustees.
5- What are the benefits of addressing debt?
Addressing debt can lead to improved financial stability, lower stress levels, and increased long-term financial freedom. It can also prevent negative consequences like damaged credit scores, collection calls, and legal action.