Based on working in the Credit and Financial industry for over 8 years now here is what I feel are the best ways to get out of debt. Really, if you condense down every program offered online these days in Canada for dealing with debt the all pretty much fall under one of these categories as there are really no other ways out of debt (legally) in this country.
So here they are the best ways to get out of debt:
1) Sell Assets:
- ADVANTAGES – Pays down debt with no effect on credit; reduces your interest cost.
- DISADVANTAGES – For some people they have no assets to sell. And having no car is the first thing to consider when seriously wanting to get out of debt it is often what you can sell to eliminate your debt. This is the option that is “easy to say, but hard to do!” Sure, it hurts to sell that extra car or even consider selling the home but the seriousness of the debt situation may call for more extreme measures to fix it. If you work with a certified financial planner this is something you should discuss with them to help determine what might be the best item to liquidate and pay off your debt. For example – it may be worth liquidating a poor performing investment to pay off extremely high interest credit card debt but it may not be worth cashing in RRSP to pay off low interest debt.