What to do if you face financial difficulties? Now is the time to review your finances and understand your own reality. Look at where you are each month with your income, current cost of living, and debt service payments.

Are there areas of spending where you could cut to free up money in your budget? It’s also good to test your debt by estimating how much your monthly payments might increase when interest rates rise. Will these payments remain affordable?

Do you have variable rate loans that you can bundle or lock into a fixed rate to protect against future interest rate increases? Is refinancing an option?

Another area to look at is your debt to income ratio. Divide your monthly debt payments into your monthly income to determine this percentage. If this ratio is 40% or more, you should consider options and alternatives to reduce your debt.

If you find that you are only making your minimum payments, be aware that it will take you years to pay off your debt at significant cost.

Making only minimum payments is a warning sign that you may need help with your finances. Other warning signs may include using one form of credit to pay for another, not being able to make all your payments, running out of money before payday, and finding friends. or family to borrow money.

Ultimately, now is not the time to take on additional debt. This is a time when you need to be very aware of your budget and your expenses. If you are already having difficulty, it is important to seek advice as soon as possible. The sooner you talk to a professional about your finances and your options, the more solutions you will have to settle your debt.

Michelle is a Licensed Insolvency Trustee and a Certified Insolvency and Restructuring Professional. She is a Vice President at BDO and works out of the Regina office. She has been in the industry since 2001 and believes in the system that empowers individuals to find solutions to their financial challenges so they can take charge of their finances once again.

If you are struggling or are overwhelmed by your financial situation, we can help you find the right solution. Call 1 855 BDO DEBT to book a free, no obligation consultation with a BDO debt professional.