Canadian Debt Relief

Canadian lenders may have taken fewer risks than their American counterparts during the years leading up to the recent recession, but it wasn’t enough to insulate the country completely from the toxic effects of the global financial crisis. If you’re like most Canadians, you probably feel a great deal less secure in your finances than you did just a few years ago. You may even be worrying where your next paycheck is going to come from.

Worse, you may have accumulated unseemly amounts of debt in the easy-credit days preceding the recession. Until recently, banks were practically giving away credit cards, personal loans, business lines of credit and other unsecured credit products, seducing millions of Canadians with the promise of cheap cash and a leisurely repayment schedule.

If you fell for the hype, don’t be too hard on yourself. Instead, resolve to dig yourself out of your predicament with the help of a certified Canadian debt relief company.

There are almost as many ways to get out of debt as there are to become ensnared by it in the first place. You’ve no doubt seen slick TV spots or online banner ads hawking debt consolidation loans, and you probably understand the concept of personal bankruptcy as well. You may even have noticed billboards or bus-stop ads touting the advantages of not-for-profit credit counseling agencies that promise to reduce your debts for next to nothing.

Every debt problem is different, and there’s no one-size-fits-all approach to getting out of debt. Choosing the appropriate debt relief option can be a complicated process that turns on the value of your outstanding debts, your relationship with your creditors, the size of your savings cushion, your employment status, and countless other factors.

It’s a big choice, so don’t allow anyone to rush you into making a decision. Instead, take some time to consider your options and make a determination that you can live with.

With aggressive advertising support and easy-to-understand terms, debt consolidation loans may be the most popular Canadian debt relief option. From British Columbia to Nova Scotia, thousands of desperate Canadians enroll in these programs each year.

As their name implies, debt consolidation loans are credit products designed to reduce the aggregate interest rate on your outstanding unsecured debts. The idea is simple: Debt consolidation loans allow you to pay off all of your existing debts at once, effectively trading multiple monthly payments for a single obligation.

Even if your credit is less than perfect, you’ll probably be able to secure a debt consolidation loan large enough to cover your outstanding debts in one fell swoop. Since you’re trading one basket of debt for another, however, it’s important to shop around for the lowest possible interest rate before you pull the trigger on a debt consolidation loan.

As anyone who needs a debt consolidation loan is an inherent credit risk, you’re guaranteed to pay a premium for it. As such, you’ll need to calculate just how much your new debt consolidation loan will save you relative to your old collection of debts. For instance, taking out a $10,000 loan with a 15 percent interest rate to replace a credit card bill with an average interest rate of 20 percent will save you $500 per year.

Rates may be more favorable in certain parts of the country. If you live in oil-rich Alberta, where credit is still quite easy to come by, your lender may knock several percentage points off of your annual charge. On the other hand, you may pay a hefty premium over the national average in hard-luck Newfoundland.

No matter where you live, debt consolidation loans carry significant risks. Your lender will likely give you less rope than your former creditors, who were only too happy to let you run a balance on your credit card. Don’t be surprised if a single missed payment sends you into credit-destroying default on your loan.

Credit counseling is another apparently cheap option that carries some steep hidden costs. Using a credit counseling service to seek Canada debt relief will seriously affect your credit score, making you unattractive to lenders and employers alike. Worse, the credit counseling process can be interminable with complex cases taking up to six years. Indeed, the only real upside to these services is their ability to put an immediate end to phone harassment from your creditors.

Although it’s not perfect for every predicament, debt consolidation through settlement offers plenty of advantages over other debt relief options. Unlike debt consolidation loans or credit counseling services, debt settlement can meaningfully reduce the total amount that you owe your creditors. Depending on the number and size of your debts, the process typically takes between 12 and 48 months.

While every case is different, many creditors may be willing to settle for as little as 40 percent of what you owe. In other words, debt settlement can save you up to 60 percent on your outstanding unsecured debt load. Although your credit may suffer temporarily the negative effects of your decision to settle, your debts won’t last as long as the devastating consequences of bankruptcy.

Stop worrying about how you’ll make your next credit card payment and resolve to get yourself out of debt for good with a debt settlement program. Whether you live in Saskatchewan, Ontario or anywhere else in this great country, this uniquely Canadian debt relief solution will save you thousands in ruinous interest payments and probably hundreds more on treatments for stress-related white hairs.


Is Bankruptcy The Answer?

From Ontario to Nova Scotia, the past half-decade has not been kind to average Canadians. The disastrous chain of events that began with the collapse of the American housing market in the late 2000s continues to devastate the finances of countless families across the country.

The market for Canada’s exports, which are the lifeblood of the country’s economy, has yet to recover to pre-recession levels. From the busy ports of New Brunswick to the rich forests of British Columbia, thousands of workers remain idle.

Meanwhile, prices for food and fuel maintain an unbroken upward trajectory. As incomes stagnate and living costs continue to rise, countless Canadians are choosing to take on massive amounts of debt simply to feed and clothe their loved ones. For the first time, many prudent folks are spending more than they earn.

If you’re one of them, you’re probably feeling overwhelmed. Debt has a way of building slowly over time, drawing little notice until it’s suddenly impossible to ignore. Once it’s become difficult to make your minimum monthly payments and each credit card bill seems like it’s bigger than the last, you need to take action before things get much worse.

Depending on the depth of your debt problem, you may be feeling a great deal of pressure from your creditors. It’s not uncommon for Canadian borrowers who fall behind on their payments to receive phone calls or e-mails that threaten legal action in lieu of prompt repayment.

Don’t let their hardball tactics drive you to take drastic measures. Declaring bankruptcy in Canada is a complicated process that may do you more harm than good, especially if your debt situation isn’t yet dire.

Before you file, you’ll need to go over your financial situation in great detail with a licensed trustee. He or she will pore over your bank statements, tax records, and even sales receipts for durable goods to determine your exact net worth.

While the laws governing the bankruptcy process differ from province to province, you should expect to lose a substantial amount of your assets to your creditors no matter where you live. Although you’re legally permitted to retain certain “exempt” assets through the bankruptcy process, these allowances typically are not generous.

In Ontario, you’re allowed to keep your car if it’s worth less than $5,650 as well as work-related tools worth less than $11,300 in the aggregate. Apart from certain home furnishings and clothing items, most other assets are fair game for seizure. Similar rules apply in Saskatchewan: You can keep a car worth less than $10,000 and clothing items worth not more than $7,500.

There are a few upsides to declaring bankruptcy. Once your bankruptcy trustee has approached your creditors and begun to determine how best to divide your non-exempt assets among them, they’ll stop harassing you in short order. After all, they have nothing to gain from doing so when you’re no longer in control of your own possessions.

Declaring bankruptcy may also work to your advantage if you have few assets of any value. Losing an expensive car or the equity in your family home to bankruptcy can be a traumatic experience. Without major assets like these, you have little to lose but your sense of dignity.

However, the road back from the financial abyss can be arduous even if your creditors aren’t able to take much of what you own. Depending upon the quality of your credit history, filing for bankruptcy will ruin your financial reputation for anywhere from six to 14 years.

During this period, you’ll find it next to impossible to obtain credit, consigning you to use cash and debit for virtually every purchase that you make. News of your bankruptcy filing will become publicly available, showing up on credit reports and background checks, and may affect your ability to find a job for years.

There are plenty of alternatives to declaring bankruptcy in Canada. One of the most popular is debt settlement, a process that produces similar results without long-lasting repercussions.

Debt settlement providers negotiate with creditors on behalf of their clients to reduce the size of the principal on their debts. Results vary by case, but it’s not uncommon for Canadian debt settlement firms to obtain savings of 40 or even 60 percent for their customers.

What’s more, the debt settlement process typically lasts just 12 to 48 months. That’s positively speedy in comparison to the decade-long hangover that follows a bankruptcy filing.

If your debt situation is becoming unmanageable, resist the urge to wave it away with a desperate decision that could have devastating consequences for your future. Instead, carefully consider your options and determine whether it’s necessary to consign yourself to a decade or more of financial pain by declaring bankruptcy in Canada.


Debt Consolidation

If you’re like most Canadians, you’re probably used to making sacrifices by now. Although the credit crisis that affected much of the developed world didn’t deal Canada a direct blow, the resulting recession dramatically reduced global demand for natural resources and industrial products and put many Canadian firms in a terrible spot.

Even if you survived the carnage unscathed, you likely haven’t received a pay raise in some time. Meanwhile, you’ve continued to rack up charges on the “low-interest” credit cards that you picked up when times were good and banks were giving them away like candy. Now you’re paying through the nose to run a balance on them.

If you’re struggling to make minimum monthly payments that cover little more than your ever-growing interest burden, stop simply treading water and resolve to swim your way out of your debt problem. Finding debt consolidation in Canada is easy: You’ve probably seen ads for debt consolidation loan providers, credit counseling services, and even bankruptcy lawyers online or around town.

Retaining one of these debt relief outfits is as easy as picking up the phone or clicking a URL, but first you’ll need to determine which debt relief option is right for you. Whether you live in a small prairie town in Manitoba or a bustling industrial city along Ontario’s Golden Horseshoe, your particular mix of unsecured debts is unique. Before you commit to any form of debt relief, carefully consider the advantages and drawbacks of each of your options.

Among the most popular forms of debt relief, debt consolidation loans are a refinancing tool that allows you to swap your disparate outstanding debts for a single payment to your loan provider. These products have one major advantage: They let you cancel your existing debts in one fluid movement and consolidate your entire debt load into an easy-to-understand loan with a fixed interest rate.

If you’ve missed a credit card or business loan payment and find yourself accruing penalty interest at ruinous rates, debt consolidation loans may save you serious money. However, they’re not cheap: Since banks and other lenders consider anyone who needs these loans to be a credit risk, they won’t be shy about charging a significant premium over market interest for it.

Before you take out a debt consolidation loan, make sure it’s worth the trouble. If you’ve missed a few credit-card payments and accrued penalty interest on your outstanding credit card balances, your effective annual interest rate may approach 25 percent. For every $10,000 worth of debt, that’ll cost you an extra $2,500 in annual interest charges.

In this situation, taking out a consolidation loan at 15 percent interest would save you $1,000 per year on every $10,000 that you owe. That’s undeniably a good deal.

Unfortunately, debt consolidation lenders are notorious for their unwillingness to accommodate any deviation from their loans’ pre-determined repayment plans. Whereas credit card companies may let your debts pile up indefinitely, consolidation lenders prefer to keep you on a short leash: If you miss a payment or consistently fork over less than the agreed-upon amount each month, you risk pushing your loan into default and devastating your credit score.

Debt consolidation loans may save you some money around the margins of your debt load, but they won’t reduce the principal amount that you owe. Declaring bankruptcy is one way to reduce or eliminate your outstanding debts in short order, but the long-term costs of doing so can be dire.

The laws governing bankruptcy may differ from province to province, but few financial professionals from British Columbia to Quebec recommend using it as anything but a last resort. The reason for this is simple: Bankruptcy has far-reaching, long-lasting consequences for your credit score, affecting your ability to secure credit for a decade or more.

It may not be the perfect solution, but debt settlement offers several advantages over other forms of debt consolidation in Canada. Whereas debt consolidation loans do little more than reduce your outstanding balances’ growth rates and don’t meaningfully reduce the amount of time it takes to pay down your debts, the debt settlement process may eliminate your debt burden in 12 to 48 months.

Although every debt situation is different, debt settlement has a proven record of success. Depending on your creditors’ willingness to settle for less than what you owe, the debt settlement process may eliminate 40 to 60 percent of your total outstanding balance.

If you’re struggling to make the minimum monthly payments on your credit cards and other unsecured debts, stop wondering about where you’re going to get the money to break your cycle of debt and start doing something about the problem. Start the debt settlement process today and look forward to better credit and a brighter future.


How To Get Out Of Debt

From Newfoundland to Alberta, you’re just one of the millions of Canadians who have effectively borrowed from their future selves to pay for basic necessities in the here and now. Many see no problem with doing this. After all, the past is full of examples of folks who have worked their way out of serious personal debt problems through determination and discipline.

However, you shouldn’t necessarily expect your case to follow suit. Every debt situation is different: If you have poor credit, high credit card balances, and crushing interest rates that seem to negate your monthly payments, you may not be able to escape from debt by yourself.

Fortunately, you don’t have to learn how to consolidate your debt on your own. Once you’ve made the decision to pay off your obligations and get your finances back on track, you’ll have several options.

There are four major types of credit relief: debt consolidation loans, bankruptcy, credit counseling and debt settlement. Depending on the mix of debts that you’ve built for yourself, any one of these options may prove to be the answer to your financial puzzle.

From Quebec to British Columbia, debt consolidation loans are Canadians’ most popular debt relief choice. When you take out a debt consolidation loan, you’re making a bargain: Since the loan’s principal is usually large enough to cover your existing obligations in full, your lender will expect you to pay off your current creditors immediately upon receipt of the loan. Once that’s done, you’ll be responsible for making a single monthly payment to your debt consolidation lender until you’ve paid off the new loan in full.

It’s helpful to think of your debt consolidation loan as a refinancing tool. If you’re barely able to afford the monthly payments on your existing lines of credit, your balances are probably accruing interest at unseemly rates. If you’ve missed payments in the past, you may be on the hook for penalty interest, late fees and other charges as well.

Debt consolidation loans may lower your interest rate significantly, especially if you’re in the penalty. This can translate into big savings: Reducing the 20 percent effective interest rate on a balance of $10,000 to 10 percent will save you $1,000 per year. As debt consolidation loans typically take five years or more to repay in full, your total savings may exceed $5,000.

These products come with some drawbacks. For one, your debt consolidation lender can’t reduce the principal amount that you owe your existing creditors: If you owed $10,000 before you took out your loan, you’ll owe $10,000 after you take out your loan. They can also be hard to come by: If your credit score is below average, debt consolidation lenders will either turn you away outright or ask you to pay through the nose for your cash.

If you’ve tried using a debt consolidation loan to solve your financial problems and still can’t figure out how to consolidate your debt, you may need to consider filing for bankruptcy. If you do, your creditors will stop harassing you almost immediately, you’ll see most or all of your debts forgiven, and you’ll be able to start from scratch with a tighter budget.

However, bankruptcy can cause serious headaches. Unless you don’t own much, you’ll exit the process with fewer assets and a rock-bottom credit score. It can take years to rebuild your financial reputation after bankruptcy, so it’s best to exhaust all other options before taking the plunge.

Credit counseling should be one of those options. While your credit counselor can’t reduce the principal on your outstanding loans, they can negotiate sharp reductions in your annual interest rates. They have a vested interest in keeping you solvent: Since they receive much of their funding from banks and credit card companies, they don’t want you to default on your loans and rob their benefactors of thousands of dollars.

Unfortunately, a successful credit counseling program can take five to seven years to complete. If you’re wondering how to get out of debt sooner than that, look to debt settlement. Depending on the size of your debts and your creditors’ willingness to negotiate, this process typically wraps up in 12 to 48 months.

What’s more, debt settlement providers make it their mission to negotiate actual reductions in your outstanding principal balances. The exact amount that you’ll save depends in large part on your creditors’ receptiveness to the process, but it’s not unusual for debt settlement to slash 40 to 60 percent from a typical debt load.

While there’s no magic debt-relief bullet, these four proven methods can help you escape your creditors and get your life back on track. Weigh your options carefully and make the call that best suits your needs.