Are you being harassed by multiple collections agencies? Are you getting notices from different companies every day? Are you being constantly reminded of the debt you owe? Consolidating your debts together alleviates the constant barrage by folding all your debts into one payment. You'll still owe the same amount of money, but you'll only owe to one creditor. You have three ways of doing this.
It can take the form of a second mortgage (also called a home equity loan), a line of credit from a bank or credit union, or a bank loan secured by another person or asset. We would recommend the first two over the third, as there’s a better chance of getting a lower interest rate or extended terms.
If you’re working or have an additional source of income and you can produce a monthly budget showing that you’re able to make your payments, you should have no problem. You may be asked for a co-signor like a friend or relative, or for collateral like a car or a house. This can be tricky because defaulting on your payments could either expose your co-signor or put you at risk of losing your collateral.
This allows you to consolidate certain debts, possibly with an interest-free period, through a credit counselling agency. The issue with debt management plans is creditor participation, in that they may not. So going down this route might not solve your problem of too many calls or letters from too many creditors.
You probably are, but you’ll most likely pay a hefty up-front fee to the credit counselling agency for them to attempt to negotiate with your creditors, which they may or may not be able to do. For this reason, you should avoid unlicensed or unaccredited agencies.
This is the only option available from a Licensed Insolvency Trustee (LIT), and it’s by far the safest option, especially if you’re certain you can’t pay everything you owe.
If you decide to file a consumer proposal, an LIT will present an offer to your creditors that will most likely involve a reduction of the amount you owe in exchange for a speedier payback. Once they accept, all your debt will be rolled into one payment plan administered by the LIT. You’d pay them, and they'd pay your creditors.
If you don’t qualify for a debt consolidation loan, a Consumer Proposal is your best option.
If you are burdened with debt stress, asking for sound advice is a sign of strength and the smart thing to do. Asking sooner rather than later is always better. Book your free, no obligation consultation below. You’ll be glad you did.
Because we’ve been doing it for more than 20 years. Since 1996, we’ve helped people all over Ontario and Quebec fend off multiple creditors. We’ve dealt with almost all the banks, credit cards and utilities, we know how to get them to play ball and we can teach you to better manage your finances so you’re never in this position again.