Canadian Debt Relief
Like so many Canadians these days, there is an ongoing struggle to eliminate overwhelming debt. Know that there are solutions and there are answers to be found, which can help give you a direction to ease the burden. Many have fallen into past due states with creditors and credit ratings are suffering. It is never too late to take control and get rid of the financial stress.
Canada has ample resources for getting debt relief help and it pays to do your research. Getting rid of monthly payments that are strangling your financial life is key but finding the right professionals to help you is equally important. Each situation is different and there is no one method that serves everyone.
By understanding and knowing which option is best for you, your road to debt freedom can be paved for success. Getting out of debt and staying out of debt is a long term goal. Make the right choices for yourself now and feel the rewards for years to come.
The concept of debt consolidation has been around for hundreds of years. In this solution, all of your unsecured debt is consolidated under one payment by acquiring a loan that covers all the debt and its interest. You make one monthly payment rather than many individual ones and the amount is likely to be much lower than all of your current monthly bills would be if you added them up. The loan is a low interest one but it does require collateral and the other downside is that it is a long term loan.
Another way to consolidate all of your debt into one monthly payment is through consumer proposal. It is one of the most popular solutions because it also entails an overall debt reduction on principal balances. It works similar to bankruptcy and you must prove your insolvency. A licensed Trustee is appointed, who will negotiate with your creditors and come up with a new amount owed. You will be given one monthly payment to make and you must maintain them for the time the proposal is set up. This usually spans three to five years but when the usual average is 2% of the principle balances per month, many find it a way to eliminate debt.
Credit counseling is essentially receiving a better education in how to manage your finances. It can be an eye opening experience for many Canadians, who have not been adept at budgeting and who have no idea why they are in debt. By working with a professional counselor, it is simple to put together a comprehensive evaluation of your economics and then decide what you can afford to pay each month. The downside of credit counseling is that it really doesn’t reduce your monthly bills by enough to help those who are in deep debt. Consequently, it isn’t really considered a debt relief option.
For those Canadians seeking an aggressive form of debt relief without going into bankruptcy and legal proceedings, debt settlement may be the answer. Debt settlement works without court supervision, requires no loan and reduces your debt principles dramatically. It isn’t feasible to do it yourself and most Canadians, who use debt settlement, opt to work with a professional company. The experience that these professionals bring to the table are many. They have ongoing relationships with creditors and have honed skills in negotiating. Creditors tend to reduce principle balances in hopes that you will not declare bankruptcy because they would prefer receiving part of what is owed them rather than nothing at all. In debt settlement, a monthly payment sets aside funds that will eventually pay off the reduced balances, and it is all managed by the debt relief company.