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    Dealing with Debt: 3 steps

    Step 1: Recognize the problem

    Step 2:  Understand the problem

    Step 3: Take action

    Step 1: Recognize the problem

    What type of loan do you have?

    Potential problems:

    (1) Interest Rates

    (2) Secured vs Unsecured Loans

    (3) Behind on your payments

    (4) Cash flow problems

    (5) Credit Issues – Credit limits / Credit scores

    Step 2: Understand the problem

    Gather as much information about the problem as possible:

    (1) How much do you owe? When is payment due? Who do you owe the money to?

    (2) What are the key terms of your loan or credit product?

    (3) Do some research on your problem using reliable sources. (ACORN Portal; Financial Consumer Agency of Canada; Steps to Justice), Speak to local community organizations, speak to others who have experienced a similar problem)

    Step 3: Take action

    (1) Assess your financial situation. (See FCAC’s budget calculator)

    (2) Talk to your provider/creditor.

    Things you can ask your creditor for include: Spreading out payments over a longer term to reduce your monthly payment; Reduced interest rate; More time to repay; Reduced total debt.

    Things to consider:

    -What can you actually afford?

    -Write down the contact information of the employee you spoke with.

    -Be polite but persistent.

    -Clearly explain your financial situation and show you are committed to repaying your debt.

    -If your creditor agrees to your proposal, get it in writing.

    (3) Ask for help.

    If you don’t want to talk to your creditor(s) on your own, or you tried to talk to them and you’re still having trouble, don’t be afraid to ask for help. For example:

    Debt consolidation services

    Credit counselling services

    Community organizations

    Remember to research these companies before agreeing to anything. Even a non-profit credit counsellor might charge to help you manage your debts.

    Find out how to deal with collection agencies here

    Find out how to rebuild your credit here