debtcare.ca

Category: Debt Consolidation

  • Facing Bankruptcy During COVID-19? There are Other Options too.

    If you are faced with tough financial decisions, bankruptcy can seem like the option that will reduce the burden of debt.

    As Bankruptcy Canada puts it, in simplest terms, in personal bankruptcy, you assign everything you own to a Licensed Insolvency Trustee in exchange for the elimination of your debts.

    While many individuals and companies file for bankruptcies, particularly during financial crises, bankruptcies come with their own challenges.

    To begin with, bankruptcy is expensive and can have personal implications if the debt carries director’s liability – such as unpaid source deductions and GST/HST liabilities.

    Also, when you file for bankruptcy, the trustee involved does not represent you. The trustee is an impartial court appointed officer, who has to look out for both your and your creditors’ interests. So, it is always recommended to work with a debt consultant, who can support you through the process.

    Lastly, bankruptcies are likely to cause your credit score to drop to the lowest possible rating at most Canadian credit bureaus.

    This is why it is important to evaluate other options available to you as well.

    Some of these options can not only help you retain your assets but also save your credit rating.

    Mortgage refinancing, for instance, is a popular way to get out of debt.

    When you’re looking to reduce your debt load, having equity can be incredibly beneficial. If you own a home, you can use available equity to consolidate your debts into one payment. This is an effective way to quickly deal with high-interest debt while managing your budget and minimizing the negative impact on your credit score.

    When you have to make one fixed payment on a fixed schedule, it is easier to keep track of what you owe.

    Additionally, given the all-time low interest rates, you could save money on your monthly mortgage payments if you bought your home at a time when interest rates were higher.

    If you do not have home equity, consumer proposals can be a viable option especially when you are facing collection action and have unsecured, non-mortgage debts between $8,000 to $250,000.

    It is a proposal made to your creditors, where your creditors agree to accept a single payment representing a percentage of your overall debt, that you repay monthly, normally over a term of 5 years.

    This helps in consolidating your debt, preventing collection action, and protecting your assets.

    While your credit score does take a hit after you file for a consumer proposal, this is usually temporary. Two years after your proposal is paid in full, your credit score can bounce back.

    Deciding what works for you depends on the level of debt you need to pay off, the worth of your assets, and your current financial standing.

    At DebtCare, we review all these aspects and propose a plan of action that helps you eliminate your debt on terms that are favourable for you. So, if you’re facing insolvency, contact us today for a free consultation on 1-888-890-0888 or visit www.debtcare.ca.

  • Debt Consolidation 101 – Dealing with CRA Collection Action

    Have you recently received a phone call or a letter from the CRA regarding your existing debt?

    That’s because, as of September 2020, the CRA has resumed its debt collection activities. The CRA has confirmed that it is reconnecting with taxpayers to re-evaluate their respective financial situations and discuss debt repayment options.

    The CRA has also started requesting voluntary repayment of CERB from individuals who have received it but did not meet the eligibility criteria.

    While no legal actions are being taken (at this point), it is good to know about what actions can the CRA take and what options do you have.

    What Happens if You’re Unable to Pay?

    If you have received a notice from the CRA and are unable to repay the debt, CRA is authorized to take certain actions that can have serious financial and/or legal consequences for you.

    As these are unprecedented times and many Canadians are facing financial distress, the CRA has temporarily stopped legal actions.

    For when legal actions do resume, the CRA normally will not take legal action until 90 days after mailing you the notice of assessment or reassessment.

    If you do not make timely payments or agree on a repayment arrangement, the following actions can be taken:

    I. Wage Garnishment

    Wage garnishment is done when tax debt goes unpaid. The CRA uses your federal income, GST/HST credits, and/or income tax refunds to obtain the payments.

    II. Asset Liens

    It is also possible for the CRA to obtain a writ or memorial to seize and sell the assets you own. These include your properties, your vehicles, and other assets.

    III. Third-Party Assessments

    In addition to garnishing wages and seizing assets, the CRA can hold a third party legally responsible to pay your tax debt. These include your spouse, business partner, or even a financial institution.

    Should You Look into Debt Consolidation?

    So, if you’re not able to make the payment and want to avoid further action from the CRA, is debt consolidation a good option?

    To answer this question, let’s define debt consolidation.

    Debt consolidation is when you obtain a new loan or sign-up for a program that helps ‘consolidate’ a number of smaller loans, debts, and/or bills into one, single monthly payment.

    There are a number of options you can look at depending on your situation. For instance, if you have equity in your home, you can obtain a second mortgage. This option offers low interest rates and preserves your credit.

    Obtaining a second mortgage, by leveraging your home equity, is a very practical solution that many homeowners in Canada opt for.

    Though, if a loan is not an option and you have multiple debt payments, you can look into a plan like a Consumer Proposal which can help you consolidate debt payments into one affordable monthly payment and ensure you are debt-free within 5 years.

    At DebtCare, we have created a debt repayment calculator that can help you quickly and easily estimate how you can be out of debt in five years or less!

    The Way Forward

    So, with so many debt consolidation options, which one is right for you? Financial consultants, like DebtCare Canada, can help you analyze all of your options, discuss various strategies for repayment, and bring together the resources you need to resolve your debt issues.

    Remember, when it comes to CRA debt, it is always good to have a proactive rather than a reactive approach.

    Contact us, for a free consultation, by calling us on 1-888-890-0888 or visiting www.debtcare.ca.

  • Get Debt Help Without Leaving the House – Here’s How

    In the past, before the novel coronavirus (COVID-19) people might have gone to see a financial consultant in person for debt help or otherwise, but with social distancing in effect, that is not advised right now unless absolutely essential.

    However, debt help is more necessary than ever right now. The impact of COVID-19 has left many Canadians out of work and struggling to pay bills.

    A report from the Canadian Centre for Policy Alternatives warns the unemployment rate could rise to 13.5%, the highest level since the Second World War.

    In one week, more than 500,000 Canadians applied for employment insurance (EI). The government is also expecting more than 4 million applicants for the recently announced Canada Emergency Response Benefit (CERB).

    While some government help is available — such as emergency caregiver assistance and a wage subsidy for eligible employers — these programs are still rolling out and there may be a waiting period to receive funds. And for many, the assistance provided may not be enough to get by.

    Dealing with Debt to Free Up Finances

    Debt payments take up a large chunk of Canadian budgets. According to Equifax Canada, the average Canadian carries $72,950 in debt. $23,800 of that is non-mortgage debt (which includes credit cards, loans and lines of credit).

    Even carrying a little bit of debt can stretch your budget, especially when your income is reduced. Do you want to be putting your limited income towards credit card payments?

    When every penny counts, it’s better to make that money work for you — instead of using it to repay past expenses.

    The time to deal with debt is now, particularly if you have been laid off or your income has been affected by COVID-19 or otherwise.

    While everyone is frightened and worried (and rightfully so), the current situation and loss of income will allow people to get much lower deals on their debts as their income has been reduced. Most creditors will be accepting any reasonable offer.

    If you wait until your income has returned, the opportunity to have your debt reduced to the same extent will be gone.

    How to Get Debt Help Online

    The key to getting debt help online — without leaving your house — is knowing what you are looking for.

    You want to find:

    • A debt consultant that has an established reputation (meaning you can trust their services — this is especially important when you cannot visit their offices due to social distancing).
    • A debt consultant that works in your part of the country or nationally.
    • A debt consultant set up for remote access — with social distancing, you shouldn’t have to go into an office.
    • A debt consultant that will review all your options.

    We can only speak to our services at DebtCare Canada, but we provide exactly that. We’ve helped thousands of Canadians deal with their debt and get their finances back on track.

    We act solely in your interest to ensure that you get the best possible results by utilizing federal government programs and other financial solutions to help you deal with your debt with dignity.

    Our reputation is trusted and secure. We operate nationally and remain fully functional during the COVID-19 pandemic through remote operations.

    How to Contact DebtCare Canada Remotely:

    We know this is a stressful time and we want to assure you that DebtCare is here for you. If you are struggling, please reach out. 

    You can also follow us for regular information related to dealing with your finances during COVID-19 and beyond. DebtCare is on Twitter, Facebook, and LinkedIn.

    Learn more about our services at https://debtcare.ca/.

  • Consumer Proposal vs. Bankruptcy – We Break It Down

    Consumer proposal vs. bankruptcy – what is the difference, and which one is the best choice for you? If you want to find out the answer, read on!

    For Canadians struggling with debt, both filing for a consumer proposal and filing for bankruptcy can be a way out. But how can you tell which one is right for your situation? We’re breaking it down.

    We’ll look at:

    • What is a consumer proposal?
    • What is bankruptcy?
    • Consumer proposal vs. bankruptcy – main differences
    • Bankruptcy or consumer proposal – which one is best for you?

    Consumer Proposal

    A consumer proposal is a form of insolvency filing where you make a settlement offer to your creditors. That’s where the name comes from — it is a proposal to creditors from you, the consumer.

    In your proposal, you offer to settle your debts for less than you owe, but more than your creditors would receive if you filed for bankruptcy, instead.

    The majority of your creditors must accept your proposal for it to be approved.

    Generally in a consumer proposal, your assets are not sold off to pay your debts. A consumer proposal is only available for unsecured, non-mortgage debts between $8,000 to $250,000. If you are carrying more debt than that, you might consider another type of proposal, or filing for bankruptcy. You also must be able to demonstrate your ability to repay a portion of your debt.

    Bankruptcy

    In personal bankruptcy, you assign your assets in exchange for the elimination of your debts. Every province has certain exceptions for what you can keep but, depending on the amount of debt you owe, some assets may be sold.

    You can file for bankruptcy if you owe at least $1,000 and are not able to pay your debts. Bankruptcy only deals with secured debts, such as personal loans, credit cards, and tax debt. It doesn’t erase most secured loans, such as a car loan or mortgage, although those assets may be repossessed if you cannot meet those payments.

    To be discharged from a bankruptcy, you must meet a schedule of payments, set out by a Licensed Insolvency Trustee.

    Consumer Proposal vs. Bankruptcy – Main Differences

    Filing for a consumer proposal and for bankruptcy are two different things. The main differences are:

    • In a consumer proposal, you can only file if you owe less than $250,000 in non-mortgage debt. In a personal bankruptcy, there is no limit.
    • A consumer proposal must be accepted by the majority of your creditors. A bankruptcy does not need approval.
    • Filing for a consumer proposal leaves you with an R9 rating on your credit report while you are in the proposal; it is upgraded to an R7 once it is paid off. The R7 stays on your credit report for three years after completion.
    • Filing for bankruptcy leaves you with an R9 credit rating while in the bankruptcy and for seven years after it is discharged (it is never upgraded to a better rating throughout that time).
    • A consumer proposal generally does not affect your secured assets, like your mortgage or car – although this depends on your personal situation.
    • A consumer proposal allows you to rebuild credit faster, particularly if you pay it off quickly.

    Bankruptcy or Consumer Proposal – Which One is Best for You?

    Whether you choose to file for bankruptcy or for a consumer proposal can depend on your circumstances.

    Questions to consider include:

    • How much total debt are you carrying?
    • How much unsecured debt are you carrying?
    • How much are your secured assets worth?
    • Can you demonstrate the ability to repay a portion of your debt?

    It can difficult to answer these questions on your own. The best way to go about deciding which insolvency option is for you – or if there is an alternative debt consolidation method that may work – is by contacting a debt counsellor, such as DebtCare Canada, for a free consultation.

    Having an Advocate on Your Side

    Both a consumer proposal and bankruptcy must be filed through a Licensed Insolvency Trustee (LIT, or formerly known as a Trustee in Bankruptcy). However, if you’re filing for insolvency, it’s also important that you have an advocate on your side.

    While Licensed Insolvency Trustees administer the consumer proposal or bankruptcy, they are not equipped to be this advocate for you. A) They represent both you and the creditor, so they are not entirely on your side. And B) they earn their money based on the size of your filing.

    It’s best to have a debt counsellor – like our experts at DebtCare Canada – on your side during an insolvency filing to ensure you are represented at the table during the filing process. We can make sure you are protected and getting the best deal possible.

    At DebtCare, we will help you decide whether filing for bankruptcy or for a consumer proposal is right for you and be your advocate throughout the entire process. We perform an independent review of your financial situation and make practical recommendations that will work for you.

    Contact us today for a free consultation. Call 1-888-890-0888 or visit www.debtcare.ca.

  • Bankruptcy and Consumer Proposals Rise as Consumer Debt Reaches Record Limits

    Are you struggling with consumer debt? If so, you’re not alone.

    According to BNN Bloomberg, the average Canadian household owes $1.76 for $1 of annual disposable income. The same household devotes $0.15 of every disposable dollar to making principal and interest payments on debt, which is a record high.

    BNN Bloomberg also noted that when you add together consumer credit, mortgage, and non-mortgage debt, Canadians are carrying $2.28 trillion in credit market debt.

    What’s more, beyond just carrying debt, they’re paying the price. The number of insolvencies – bankruptcies and consumer proposals – filed by consumers in 2019 increased from the year before.

    While the numbers for the final quarter of 2019 have not been released yet, as of Q3 2019, Canadian insolvency filings were up to 34,708 — up more than 4,000 over Q3 2018. Of that, the number of bankruptcies rose slightly (from 13,549 to 13,757) and the number of consumer proposal filings rose substantially, going from 16,764 to 20,951.

    Why are more Canadians going into debt?

    According to a survey from Manulife, two in five Canadians believe they will never be debt-free.

    There are many reasons Canadians might currently be struggling with debt. Housing prices are continuing to rise, especially in larger cities like Toronto and Vancouver.

    While interest rates have stayed the same for the past year, the added spikes in 2017 and 2018 still didn’t help for those carrying debt. Some have also speculated that it’s too easy for Canadians to gain access to credit – and spend more than they can afford to pay back.

    For others, job insecurity can be part of it – not enough income to make ends meet. They might be facing job loss, working in a precarious employment situation (like the gig economy) with inconsistent income, or simply not earning enough to afford high housing prices.

    Poor credit habits can hurt your finances, too. While paying only the minimum balance on your credit cards can seem like a good idea, it can actually mean more debt in the long-term.

    Sometimes the moments leading up to major debt troubles are insidious. What can start as a seemingly harmless action can snowball into a much bigger problem.

    What exactly does struggling with debt look like? It could include:

    • Being unable to pay all your bills in full and on time each month.
    • Making only the minimum payments each month.
    • Being unable to make even the minimum payments.
    • Having more debt than income.
    • Always taking out another loan to pay off your old debts, getting into an unsustainable cycle.
    • Relying on credit to pay all your bills because you don’t have enough funds in your bank account.
    • Consistently being unable to afford the items you need to achieve a daily quality of life – pay for groceries, afford your rent, and so on.
    • Living paycheque to paycheque without knowing how you would afford an emergency.
    • And more…

    This might vary depending on your exact circumstances, but any of these could be a precursor to bigger problems down the road.

    How to deal with debt before major damage is done

    The sooner you realize you have a debt issue, the more likely you are to resolve it before major damage is done to your quality of living.

    When you file for insolvency, your credit score takes a big hit. While this is sometimes the best option, and it is possible to recover over time, if you tackle your finances early you minimize the need for this type of action.

    Some steps you can take to resolve problem debt include:

    • Creating a realistic budget and looking for ways to reduce your current expenses, then putting the savings towards paying off your debt.
    • Honestly assessing where your money is currently going and eliminating wasteful spending.
    • Practicing good financial habits, like always paying your bills on time and in full.
    • Not relying on credit. While some use of credit is good for your credit score, you don’t want to be using it because you don’t have the money elsewhere.
    • If you have an income problem, looking for ways to earn more – either through asking for a raise, finding a new job, or getting a part-time job.
    • Seeking out debt consolidation methods, such as mortgage refinancing.

    While filing for insolvency is one option, it’s not the only option – especially if you tackle the problem early.

    In 2020, make your resolution to figure out your finances for good. Debt freedom is possible with a little planning. There’s no point feeling bad about the circumstances that got you into debt. Instead, realize you’re not alone and focus on finding the way out.

    That’s where we come in. At DebtCare Canada, we will assess your situation and make recommendations to deal with debt. We’ll go over your options and create a realistic plan for success.

    Contact us today for a free consultation. Call 1-888-890-0888  or visit www.debtcare.ca.

  • Protecting Your Home Through Financial Restructuring

    Having financial troubles can be stressful no matter where you are in life – but it’s doubly so if you own a house.

    There’s a common fear that financial restructuring will mean losing your home. Fortunately, there are ways to protect against this.

    The first thing to do is to make sure that you stay up-to-date with your mortgage payments. If you haven’t defaulted on your mortgage, your chances of keeping your home through a financial crisis increase greatly.

    Let’s look at some of the financial restructuring options you might have when you own your home…

    1. Debt Consolidation

    As long as your mortgage payments are up to date, a debt consolidation loan can be a good way to deal with outstanding unsecured debt.

    Unsecured debt might be credit card bills, lines of credit, your cell phone bill, etc. It is anything not tied to collateral – so your mortgage and car loan would not fall under this umbrella.

    Unsecured debt usually has a high interest rate, making your monthly payments even more expensive. This is where a consolidation loan can help. You can use the money to pay off your unsecured debts, and then pay back the consolidation loan at a fixed interest rate over a manageable schedule.

    You won’t be paying as much in interest, so you can use the extra money to keep your mortgage payments up to date.

    1. Home Equity

    Sometimes your home can actually be a source of income for financial restructuring. If you have equity available, you might be able to use it to pay off your outstanding debts – essentially, this is a form of a consolidation loan.

    Again, this is dependent on your mortgage payments being current and made on time every month.

    1. Filing for a Consumer Proposal

    If you don’t have enough equity available or aren’t eligible for a consolidation loan, filing for a consumer proposal is another option.

    Consumer proposals deal with unsecured debt up to $250,000 (excluding your mortgage). In a consumer proposal, you make an offer to your creditors to settle your debts for less than what you owe. This offer must be accepted by the majority of your creditors and you must be able to prove they’ll get more money than they otherwise would if you filed for bankruptcy.

    In most cases, you can keep your home when you file for a consumer proposal, as your assets remain untouched. Again, this depends on your mortgage payments being kept up to date and is based on you having enough income to continue paying your mortgage after the proposal.

    A good financial advisor will structure your consumer proposal based on equity.

    If you have more than $250,000 in unsecured debt, you might file for another kind of proposal or bankruptcy instead.

    1. Filing for Bankruptcy

    Filing for bankruptcy is where most people fear they will lose their home. This is because in a bankruptcy, assets are often sold to pay off debts – including in some cases your house.

    However, this doesn’t always happen – and you may able to keep your home depending on the amount of equity you have available.

    If:

    • You don’t have much equity (this varies depending on province), and
    • Your mortgage payments are up to date

    your ability to keep your home increases substantially.

    If you do have a lot of equity, you may still be able to keep your home by repaying your equity through borrowing money, or through a second mortgage.

    A good financial advisor, like those at DebtCare Canada, will also help you structure your bankruptcy based on equity.

    1. If You Can’t Afford Your Mortgage…

    As we’ve discussed, keeping your home through financial restructuring largely depends on being able to continue making your mortgage payments.

    If your mortgage is up-to-date, you’re less likely to lose your house. But what if even after consolidating debt and making a budget you don’t have enough income to make your mortgage payments?

    This can be a whole other issue – but it’s important to remember that you still have options. You might need to:

    • Make more income through asking for a raise or getting a second job.
    • Or sell your home and downsize to a smaller mortgage.

    While selling your home may not necessarily be the same thing as keeping it, it can be preferable to losing your home through having it seized. In this option, you would still retain the profits from the sale, and you could use the money to move into another, less expensive property.

    A good financial advisor, like the ones at DebtCare Canada, can help you sort through your financial restructuring options, so your home is protected.

    Contact us today for a free consultation. Call 1-888-890-0888 or visit www.debtcare.ca.

  • Should You Get a Home Equity Loan to Pay Off Debt Before Interest Rates Increase Again?

    How confident are you that you could survive another Canadian interest rate increase? If your answer is “not very” perhaps it is time to consider getting a home equity loan to pay off debt.

    Since July of 2017, the Bank of Canada (BOC) interest rate has increased from 0.5% to the current 1.5%. Although the BOC held off on increasing the rate again in September of 2018, economists speculate that rates could go up as soon as October 24, 2018 — the next scheduled BOC announcement.

    Throughout the remainder of 2018 and 2019, experts predict that interest rates could reach as high as 2.25%. If that happened, would you be able to cope?

    Increasing interest rates affect all forms of unsecured debt — credit cards, lines of credit, unpaid bills, variable-rate mortgages, and more. Even some secured debts, like a fixed-rate mortgage, could be affected when it is time for renewal as Canadian mortgage rates have also increased along with the interest rate.

    This means that if you owe $10,000 on a credit card and are paying 1.5% interest, you would owe $10,150 with the interest calculated. However, if the interest rate were to increase — say to 1.75% — you would owe $10,175.

    That may not seem like much of a difference, but credit card interest rates are rarely that low, so you may be paying even more in interest. In that case, even an extra $25 could be a big burden. And many people have more than $10,000 worth of debt. Some have hundreds of thousands worth of debt; 1.75% interest on a debt of $100,000 would be an extra $1,750.

    Plus, the longer it takes to pay off a loan, especially one like a credit card debt without a repayment schedule, the more interest you will be charged. Imagine that extra $25 multiplied by 12 months — suddenly you would be paying $300 more during the year than you otherwise would have. Even if you can afford it, couldn’t that money be put to better use elsewhere?

    The solution is to deal with your debt before interest rates increase again. And you may just be standing on a way to pay it off — literally.

    If you own a house, you could potentially access financing to pay off your outstanding debts by taking out a home equity loan or refinancing your mortgage. You would likely be left with one monthly loan that you would have to repay, but you would have a fixed-interest rate. This way you would know exactly what you have to pay every month, so you could plan for the expense.

    Some debt consolidation options available through your home equity include:

    By consolidating debt through a home loan or mortgage refinancing, you could protect yourself against future interest rate increases and make sure you stay financially well no matter what the BOC decides.

    At DebtCare, we offer one of the most competitive financial programs to help people no matter their credit or income. Bad credit? No problem. Self-employed? No problem.

    Contact us today for a free consultation to find out more about using a home equity loan to pay off debt.

    Call 1-888-890-0888 or visit https://debtcare.ca/financial-products/.

  • Will You Wait for the Canadian Interest Rate Surprise on July 11?

    Most years, July 11 is just another day. But in 2018 it could mean a change to the Canadian interest rate.

    The Bank of Canada has scheduled its next interest rate announcement for July 11, 2018. This is when they will publicly say if interest rates are going to increase again or not. If they do increase, unsecured debt will be affected. Could you handle a hike?

    If you’re not sure, it may be time to think about other options.

    One of those options might be mortgage refinancing. If you’re saddled with a lot of high-interest, unsecured debt, such as credit cards, student loans, or other consumer debt, refinancing your first mortgage could give you a lifeline out.

    Essentially, a first mortgage refinance would give you money based on equity available in your home. You could then use that money to pay off your outstanding, high-interest debts. You will then be left with a single monthly payment with a significantly lower interest rate.

    Even if you’re not struggling with debt, you may be considering refinancing your first mortgage for other reasons – perhaps there’s a home renovation project you’d like to undertake, or you’re planning for a big purchase, or you have a lot of equity available in your home and want to take advantage. Whatever the reason, if you’re considering refinancing, it’s better to do it now than after interest rates increase even further.

    Why would you want to refinance before an interest rate change? For one thing, if you’re on a variable-rate mortgage, you may want to lock into a fixed-rate mortgage so your payments won’t fluctuate with the interest rate.

    If you’re thinking about refinancing your first mortgage, doing so will get more expensive as interest rates rise, which means you could be saving less over the long run.

    Take the following example:

    You have a mortgage for $200,000 with Lender A at a 7% interest rate, and you have $20,000 in credit card debt. You find that you can get a mortgage of $220,000 from Lender B with a 5% interest rate. You use the $200,000 to pay off Lender A, and the $20,000 to pay off your credit cards, and then you repay Lender B over the long-term with a lower interest rate.

    But if interest rates keep rising, you might not be able to secure as low of an interest rate for your refinancing, which could make the loan harder to pay off.

    If mortgage refinancing is on your mind, but you’re not sure if it’s the right move, we can help. DebtCare Canada can assess your situation to determine whether refinancing your first mortgage is a good idea, or if another debt consolidation method would work better.

    Don’t wait until July 11. Get in contact today to go over your options.

    Call us for a free consultation: 1-888-890-0888.

  • Your 2018 Debt Consolidation Options

    As Canada’s household debt continues to rise, many Canadians are looking at debt consolidation options. Rising interest rates and new mortgage rules are leaving less room for debt and those who once had a comfortable cushion may now find themselves struggling.

    If you’re finding yourself in a position where your debt is becoming unmanageable, or you want to be proactive and pay it down before it becomes so, here are your 2018 debt consolidation options you may want to consider:

    1. Home Equity Loans

    If you have equity available in your home, you may be eligible for a home equity loan. This can be a viable option, so long as the interest is low. You can use the loan to pay off your higher-interest debts and then repay your home equity loan in single, monthly payments. However, home equity loans often depend on your credit score and the interest can be high.

    1. Lines of Credit

    A line of credit is similar to a home equity loan, only you don’t need to own a home. A line of credit can also help with your debt consolidation, but it can come at price. Many will cost you 8% interest or higher, meaning you’ll be able to pay down debt, but repaying your line of credit will cost you. You also need to have good credit. If you have bad credit or owe a lot of debt, this may not be the answer for you.

    1. Mortgage Refinancing for First Mortgage or Second Mortgage

    Both mortgage refinancing or a second mortgage are great options if you have a lot of debt and sufficient equity. However, your credit often needs to be good and if you’re carrying too much debt, you may not be eligible.

    1. Consumer Proposal

    If your debt is excessive, you may be able to manage it through filing a consumer proposal. An offer is made to your creditors to repay a portion of what you owe in lieu of the whole payment. However, filing a consumer proposal can majorly affect your credit score making it extremely difficult to qualify for any type of credit years after the fact. A consumer proposal must also be filed through a Licensed Insolvency Trustee (LIT, or formerly known as a bankruptcy trustee) who takes a portion of what you pay.

    1. Bankruptcy

    Filing for bankruptcy leaves you with only one monthly payment, stops interest and collection action, and reduces debt. However, like with a consumer proposal, it also majorly affects your credit. It must also be filed through a LIT.

    A seasoned financial professional experienced in all of the above is your best bet to get professional financial guidance. Not only can DebtCare Canada work through the debt consolidation options, but they can also liaise and arrange the solution.

    At DebtCare, we deal with debt. A debt consolidation may just be the answer you’re looking for when it comes to getting rid of debt.

    Call us today at 1-888-890-0888.

  • Debt Consolidation Before or After the Holidays: When is the Right Time to Consolidate?

    shutterstock_524105263-1The holidays are fast approaching, and for many Canadian families, that means several weeks of juggling finances and using credit to finance holiday spending. This usually leads to financial stress, which can really put a damper on the seasonal festivities. This year, get a head start with a debt consolidation.

    When is the right time to consolidate? It is always best to start the New Year on fresh footing. If 2016 was a year where you accumulated a lot of debt, there are solutions – these solutions vary depending on the amount of debt you have and your personal circumstances. Know that any number of these solutions can help you deal with that stress from holiday spending.

    What options are available?

    Many people choose to use their home equity to refinance a first mortgage or take out a second mortgage to consolidate debt. This can provide a low monthly payment and involve interest rates far lower than what you are likely paying for credit cards. This is a very viable option that won’t have an overall negative impact on your credit score.

    What if you don’t have a home, or own a home but have no equity and are struggling to manage your payments? Or, what if you don’t have the credit necessary to obtain a traditional loan from a financial institution for a regular debt consolidation?

    Another option to consolidate debt is a consumer proposal. While a consumer proposal is not a traditional debt consolidation and does badly impact your credit score, it does involve a single, monthly payment that covers all of your debts (excluding your mortgage).

    In a consumer proposal, a settlement is negotiated with your creditors. If the majority of your creditors accept the settlement, there are many benefits:

    • A single, monthly payment and prefixed repayment term
    • Interest stops
    • In many cases your debt is reduced and your monthly payment is far less than what you were paying to your creditors
    • If your creditors have commenced enforcement action against you, such as freezing your bank account or garnishing your wages – this action will stop as soon as the proposal has been signed

    It can be difficult when facing financial challenges to know the right solution. A debt consolidation – whether through traditional channels or through a consumer proposal – is a great way to get things sorted out.

    The best thing you can do is work with a financial consultant who is independent and represents you. They can look at all of your financial information, present options and negotiate the solution that best suits your unique situation.

    At DebtCare, we can sit with you and discuss all of your options. Don’t let holiday spending stress you out. Get your finances figured out before the New Year and start 2017 off on the right foot.

    Get in touch today by calling 1-888-890-0888.