What are the real debt relief options in Canada?

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Every person’s financial problems are exceptional, and hence, no one debt relief program is suitable for everyone. Debt problems can sometimes be uncontrollable. Debt problems can sometimes present you with unsleepy nights and stressful days. It can even be challenging to find the right debt relief solution to help you get out of debt. Thankfully, there are different programs designed to help you get out of debt. Each program comes with its pros and risks.

If you search for a debt relief option, contact Licensed Insolvency Trustees of Canada. They are the affiliated professionals and debt experts who can offer you the best solution to your debt problems. Contact Dana MacRae – Licensed Insolvency Trustee, for a free and confidential consultation.

You can admit that you have a debt problem or are going to have one if:

  • You spend more money than your income.
  • You use credit cards as an urgent need rather than a comfort.
  • You borrow cash often to fulfil your daily needs.
  • The creditors threaten to garnish your wages, sue you or repossess your properties.
  • You pay just the interest or monthly minimums on your credit card debt
  • You are getting phone calls from collection agents to collect your debt payment
  • Utility companies cut off services as your bills are unpaid.

Debt relief strategies, too, have pros and cons.

The pros include:

  • It helps to reduce the amount of debt.
  • It helps to avoid legal battles with creditors.
  • It helps to evade personal bankruptcy.

The cons include:

  • Risk of ending with more debt again.
  • The refusal of negotiation by the creditors at times.
  • Affects the credit score.
  • Charged by the settlement fees by the law firm before debt relief.

Let us now check the five major debt relief options that the Licensed Insolvency Trustees of Canada offer.

Debt Consolidation

Debt Consolidation is a new loan issued to easily pay off your multiple small loans, crystalizing all the loans into a single one to enable payment. Merging smaller loans and bills into an easy-to-manage amount helps make debt repayment intuitive and affordable. Moreover, debt consolidation loans offer a lower interest rate and the capacity to spread the payment over a more extended period. The risk is that a debt consolidation loan does not eradicate your debt; it only makes repayment more manageable.

Debt Settlement plans

A debt settlement solution is an informal understanding created with your creditors. With a debt settlement, you reach an agreement with your creditors that stipulate paying back a portion of your debt. Completing a debt settlement plan requires a fee, and the arrangement is not fully guaranteed. You can consider proceeding with a debt settlement plan only if you have an available sum of money or you refer to a Licensed Insolvency Trustee who can negotiate with your creditors.

Credit Counseling plan

Credit counselling is a solution that non-profit credit counsellors often suggest as it outlines your debts and organizes a multi-year repayment plan for you. A credit counsellor offers a debt management plan that allows you to repay your debts within three to five years. A debt management program is not a debt cancellation or debt reduction, but interest relief is sometimes received to solve your debt problems.

Consumer Proposal

A consumer proposal in Ontario is often the safest and most reasonable debt relief option when dealing with debt problems. A consumer proposal is a lawfully binding settlement between you and your creditors to pay back a portion of your debts over up to five years. Your debts are officially discharged upon the conclusion of the consumer proposal, and you can begin to rebuild your credit rating.

Personal Bankruptcy

Personal bankruptcy is a legal procedure regulated by the federal government of Canada. Bankruptcy is the last alternative option when dealing with debt problems in your life since anyone who declares personal bankruptcy would have the majority of their assets taken away. It delivers honest but unfortunate debtor protection from creditors and a discharge of all debts at the end of the bankruptcy term.

Do you wish to eliminate your debts? Are you aware of the debt relief options? Contact Dana MacRae – Licensed Insolvency Trustee, to be mindful of the debt relief options in your life. 

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