The pandemic made it tough for thousands of Canadians to keep up with their bills, especially the high-interest consumer debt. A debt holiday was put in place on consumer debt and mortgages helping Canadians handle the daily cost of living without worrying about excessive debts.
Now that the country and even the world are coming back together and things are opening up, the debt holiday is nearing its ends. This means many bills will be due again – but how do you prepare for such a change in your finances?
Check out the tips below.
Negotiate a Payment Plan
Before your deferment plans end, contact your creditors. Don’t wait until the plan expires and then try to work something out. At that point it’s too late, your payments will be due and if you don’t pay them, it will hurt your credit.
Call your creditors long before it ends and ask about your options. Let them know your financial situation, whether you’re furloughed, not working, or working but trying to catch up. Most creditors will work with you, helping you figure out an affordable plan. Creditors would rather make a plan and receive the full payment than put you at risk of defaulting altogether.
Make Payments During Deferment
It’s not what you planned, but if you’re capable, make payments during deferment. This lowers the amount you owe when the deferment ends.
If you’re in a situation where you’ll owe the lump sum upon expiration of the debt holiday, that can get pretty difficult. If you pay the debt down as you can even while payments aren’t due, you alleviate that stress on yourself when the holiday ends.
Stay on Top of your Debts
If you haven’t already done so, now is a time to create a budget. Don’t let it sneak up on you. Since you know it’s coming, you can figure out where else you need to cut back so you can fit the payments into your budget.
Planning ahead is the key to financial success. Don’t let your bills, including those that are a part of the debt holiday, get the best of you. We all know it’s coming, so if we use our funds wisely and/or create a plan with our creditors, we can get through these times easier than we thought possible.