The first step to managing your debt is to understand the difference between good debt and bad debt. Good debt helps you to build on an asset, like your mortgage or to finance your education. Bad debt occurs when you borrow money to purchase an item that reduces in value over time. Credit card debt is an example of bad debt.
Our colleagues at Canada Life suggest that if you are having difficulty in managing your debt, you could look into the following:
- Negotiate with creditors to lower interest rates or monthly payments.
- Consolidate your debt into one payment.
- Increase your income by taking on extra work/hours.
- Make changes to your lifestyle.
- Consult with a credit counselling professional to establish a plan that works for you.
As a CEIRP member, these credit counselling organizations are providing free services and advice:
Credit Counselling Society
For more support, check out the Credit Counselling Society’s article and infographic called “12 of the Fastest and Most Effective Ways to Get Out of Debt & Pay Down Debt”.
SolveYourDebts.com (for plan members in Quebec and Atlantic Canada)