Debt Problems To Avoid

Failure to pay condo fees, take money from RRSPs to pay debts, or pay unsecured debts first can all lead to personal insolvencies and bankruptcy filings. These practices can add to debt rather than reduce it, so it is important to make the best of a difficult situation. Credit cards are unsecured, so it is preferable to pay secured creditors first. Making partial payments on old debt can extend the period of time where a creditor can seek to collect payment or take legal action. Maintaining accounts where money is owed is important, and using a home equity loan or second mortgage to pay off unsecured debt is not advisable.

Not filing tax returns can prevent an insolvency filing from being closed. These tips can help avoid making a difficult situation worse.