If you find yourself only able to make the minimum payments on your credit cards or you’re using one loan to pay off another, it may be time to take action on your debt. The good news is you can build a 5-year debt repayment plan by filing a consumer proposal. We’ve detailed below exactly what you need to be doing for the next 5 years to accomplish your debt repayment goal.
Make your debt-free life a reality – A Five Year Plan
Year One – Taking Action: It’s important to familiarize yourself with what a consumer proposal is and how it can help you. See if you meet the eligibility requirements for a consumer proposal and contact a Licensed Insolvency Trustee to help you create a plan of action. Find an amount that works within your budget and, once the plan is approved by your creditors, you’re on your way.
Year Two – Smart Budgeting: Although your consumer proposal was approved, and you’re now only paying back a percentage of your total debt, you need to plan for your future self. Put together a spending journal, and include increased payment strategies if you can. Although you have five years to complete your consumer proposal, it can be paid off early.
Year Three – Time to Rebuild: Now that you have steadied your finances and are on your way to a debt-free future, start rebuilding your credit. There are specific products out there designed to help you rebuild credit such as the Home Trust Visa. Use information from your money management counselling sessions to help you safely rebuild your credit rating.
Year Four – Set for Success: Revisit your budget and start planning for the future. Now is the time to start thinking about your life after your consumer proposal. Check in with your budget and make sure it’s able to support full payments on any new debt that you accumulate.
Year Five – Back to Black: Proposals have to be completed within five years or 60 months from the date your proposal was accepted. By now you would have completed your money management counselling sessions, your revised budget and have started rebuilding your credit. Ensure that all of the right pieces are in place in order for you to pay this off on-time.
Every year, people look forward to the new year, a fresh start, and a brighter future. We make financial resolutions and promises to ourselves about taking action and dealing with our debt. The challenge is that often the problem is bigger than we can deal with ourselves. A consumer proposal filed through a Licensed Insolvency Trustee can cut your debt by two-thirds, freeze your interest and consolidate all of your debt into a single monthly affordable payment. How would it feel knowing that your actions today will lead to a debt-free reality down the road?
Thousands of people every year eliminate their debt with a consumer proposal. They are now living debt-free and building their future because they decided to take action. Reduce your stress levels knowing your rent or mortgage payment will go through, you’re no longer dodging calls from creditors and you’re free to think of the big picture for your future self.
Eliminate your debt for good using a consumer proposal as a tool to help you. Contact an administrator in your area and make this year the year that you take action to ensure a debt-free future.