Debt Solutions Quick Fix Right Fix Both Or Neither

2018-02-12   minute read

Wesley Cowan

Debt Solutions

Debt, like most problems, usually has more than one solution. And while this may seem like a good thing, it can make it harder to find the solution that's best for you.

Almost everyone would agree they would like to be debt free as quickly as possible. But that might require large monthly payments that leave little breathing room in their budget. Most would also like to pay as little as possible to resolve their debt. But what if that means giving up their house or doing significant damage to their credit rating?

Person holding their phone in front of a laptop

Experience tells me the overwhelming anxiety of choosing a path to becoming debt free can be just as (if not more) stressful than the debt itself.  When every option seems like it could be the right (or wrong) one, it can be exceedingly difficult to determine which is best. Indecision can also contribute to procrastination in dealing with your debt, which usually makes things worse.

To paraphrase nearly every client who comes to me for a Free Confidential Consultation, how do you know you're making the right call?

Identifying Options

Every debtor is different and so are their situations. What works for one person will not necessarily be appropriate for another. The good news is, there are steps you can take to narrow down your options. It starts with answering the following questions:

  • What solution will get me out of debt the quickest?
  • What solution will be the least expensive?
  • What solution will maximize my monthly cashflow?
  • What solution will allow me to keep important assets (e.g. home, vehicle, etc.)?
  • What solution will allow me to maintain or rebuild a favourable credit score?
  • What solution will ultimately help me achieve my goal of becoming debt free?

By working in absolutes, you remove much of the ambiguity from your decision making. While there may be three options that get you out of debt quickly, there is only one that gets you there the quickest. Some may be less expensive than others, but only one is the least expensive, and so on. Once you have these answers in hand, you will likely notice your indecision begin to dissipate.

Choosing Priorities

In a perfect world, the answers to these questions would all be complimentary. But that's not always the case. For example, filing a bankruptcy can often be the least expensive option and have the added benefit of getting out of debt quickly. Unfortunately, you may not be allowed to keep certain assets and you will likely need to do a lot to rebuild your credit rating once you are discharged.

You will need to prioritize each question in an order that's most important to you. If you've been in debt for a long time and cannot stand it any longer, getting out of debt quickly may be your most important goal. If your monthly budget is already tight, you may want to focus on maximizing cashflow. Work through each option until each has a clear ranking.

You may notice your top three priorities compliment one another, and thus makes your decision obvious. You may also notice they all conflict with one another, which may mean some deeper reflection and helpful advice are required.

Free Confidential Consultation

The good news is you are not alone on this journey. A Licensed Insolvency Trustee can help. During a no-obligation, Free Confidential Consultation, we explore the full range of options available and help you choose the best one given your needs and wants and the unique circumstances surrounding your personal debt situation.

We can help you understand the benefits and drawbacks of every choice, so you can make the most informed and most effective decision possible. No matter which direction you choose, our goal is to provide you the Financial Fresh Start advice and insight you need to get out of debt and back to life.

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