debtcare.ca

Category: Paying Off Debt

  • 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/.

  • Two Ways to Get Out of Debt in 5 Years or Less

    What is the best way to get out of debt fast?

    Unfortunately, when it comes to debt there is rarely an easy way out. You likely didn’t get into debt overnight, so it’s going to take some time to regain your financial freedom. But there are options that can significantly speed up the process.

    We’re looking at two of these options: filing for a consumer proposal and securing second mortgage financing. Read on to determine if one would work for you.

    1. Consumer Proposal

    In a consumer proposal, an offer is made to your creditors to repay a portion of what you owe in lieu of the whole payment.

    A consumer proposal is generally termed over five years. It is suitable for someone who is loaded in debt, making minimum payments, has defaulted on debt, or is having problems managing payments. It stops collection action and interest.

    You might be eligible for a consumer proposal if you:

    • Have under $250,000 in debt (excluding your mortgage).
    • Are a higher-income earner who has gotten into a bad financial position.
    • Are a homeowner with some equity available.

    However, filing for a consumer proposal has its downsides, too. For one thing, it can critically affect your credit score, making it extremely difficult to qualify for credit for years after the fact. It 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. And there is no guarantee that the majority of your creditors will accept your proposal; you have to prove that this option would be more lucrative for them than if you filed for bankruptcy instead.

    If you’re considering filing for a consumer proposal, it’s best to seek the advice of a qualified debt consultant who represents you and isn’t making income off of your consumer proposal.

    1. Second Mortgage Financing

    If you’re a homeowner, securing a second mortgage might be available to you.

    A second mortgage doesn’t affect the first mortgage and it can be amortized over five years to see you out of debt, without stretching out over 25 years like your first mortgage.

    It’s best suited to those with home equity (at least 20% to 30%) and good credit. If your credit score is low, but you have equity, there may still be a lender who can help but it likely won’t be a prime lender.

    A second mortgage can be a good way to consolidate debt, so long as you can make the payments on time. It can allow you to pay off your other outstanding debts and only have one monthly payment. Second mortgages typically carry a higher interest rate than first mortgages, but the rate is still often lower than the interest you might have from credit cards, car lease payments, or unsecured lines of credit.

    If your debt is so large that it couldn’t be paid off with a second mortgage, or you’re not eligible for one, then filing for a consumer proposal might still be your best option.

    You don’t have to assess your financial situation alone. Handle everything in one place and get your financial advice from someone who represents you and can deploy all financial solutions.

    At DebtCare Canada we have financial programs that offer help to people with all types of credit and income. We can help you secure a second mortgage, represent you while filing for a consumer proposal, or explore other debt consolidation options.

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

  • 2017 Budgeting Tips: Planning for the Year Ahead

    Many Canadians start a new year with a resolution to get their finances in order. Creating and maintaining a budget is a great place to start. This week, we’ve got the 2017 budgeting tips that will help you build a plan and stick to it.

    2017 Budgeting Tips:

    The first step in creating a successful budget is to think about why you’re budgeting. If you’re creating a budget just because – because someone told you it’s a good idea, be it a family member or a financial success book – budgeting won’t work. The real purpose of budgeting is to indicate where your spending weaknesses are and provide the structure for you to get stronger in those areas. It also helps to have a goal in mind – this works as a great motivator when it comes to sticking to your budget.

    Step two is writing down what you earn – from all sources.

    Step three is likely the most difficult and will probably take the most time – write down all of your monthly spending. This means both regular and sporadic payments. Sometimes it helps to have the first month be your test month. It shouldn’t actually be a budget at all, it should instead reflect your spending in an average month. Then you can use that data to build an accurate, realistic budget.

    Take advantage of the various budgeting tools available – even if this means something as simple as a pencil and paper. Use such tools to keep track of spending to ensure you’re staying within your budget guidelines.

    Creating a budget can be a frustrating task. Staying on budget can be even harder. Once you’ve created your budget, it’s important to stick to it. Here are some 2017 budgeting tips to stick to that budget:

    • Use cash and only cash, for everything
    • Divvy up your weekly spending into envelopes or jars
    • Make sure you get and keep receipts
    • Share the responsibility with someone else

    If your budget shows nothing left at the end of the month to pay down debts above and beyond minimum payments, you may want to consider other solutions such as a debt consolidation or even a consumer proposal, depending on how bad your financial situation is. Minimum payments will never lead to you paying off your debts.

    At DebtCare, we can help you create a financial plan to pay down debt and move towards a more stable financial future, no matter your current situation.

    Call us today, we can help. 1-888-890-0888.

     

     

  • Is Refinancing a First Mortgage the Best Choice?

    debt2When you are looking to refinance your home to pay off debts or to cover a big ticket purchase, you have many options. You can head to the bank for a personal loan or line of credit, can turn to your credit cards, or can think about using your home to finance. Today we cover the latter – refinancing a first mortgage – and whether it is the best choice.

    Refinancing your first mortgage can be a great way to pay off debt or obtain financing for a number of different projects, be it home renovations or your child’s education. Sometimes, however, it isn’t the best way.

    First things first – look at the amount you want to finance. If it is not that much ($30,000 or less is a good starting point), then it may not make sense to blend that debt into a first mortgage that is likely amortized over 20-25 years. That small amount will eventually mean a pile of interest when stretched over such a significant period of time.

    Additionally, before refinancing a first mortgage you should also look at the mortgage terms. For example, is it closed, or open with penalties? What are the penalties? What about closing costs – will these be significant if you refinance?

    You should factor all of the above as contributing costs to your borrowing more money. In the end, perhaps the cost to borrow is not too bad, in which case it might make sense to refinance. However, for such a small amount, that cost to borrow will usually end up being higher than you anticipated, and thus refinancing a first mortgage may not be the best bet.

    So, what other options exist as far as using your home? A second mortgage can make great sense because it doesn’t touch your first – there are no costs to refinance here. Also, usually closing costs on a second mortgage are lower. Although interest on a second mortgage may be higher, structuring it like a loan with a shorter amortization period means you’ll actually pay less interest in the long run.

    When it comes to paying off debt or financing big ticket items, your home is a valuable asset to take advantage of, especially if you have significant equity. Often a second mortgage makes sense, and when structured correctly, it can actually save you money.

    To find out more about refinancing a first mortgage or a second, please contact DebtCare today. We’ve got you covered: 1-888-890-0888.

     

  • Ring in the New Year with These Finance Fixing Tips for Paying Off Debt

    Paying Off DebtLast week, knowing that the holidays have now come to a close, we started 2015 off with a list of helpful tips to get rid of holiday credit card debt. This week, we thought we’d go a step further and help you get a handle on all of that debt – both credit cards and other debt – that has managed to stack up over the course of the year. If your debt has become a problem, and you are finding even the smallest minimum payment a struggle, this list will really help you stay on track when you start seriously paying off debt.

    2015 paying off debt tips list:

    1. Our first piece of advice: take a breath. Yes, we know how stressful debt can be – but it helps, even if just a little bit, to put it in perspective. You are not alone. Thousands of Canadians are in the same boat. And, there are resources to turn to when you don’t want to do it alone anymore.

    2. Make a budget. Include absolutely everything that you spend money on on a weekly and monthly basis, and the amounts. Estimating? Round up.

    3. Decide what can be removed from this list. Sure, you can’t stop paying your mortgage or rent, but the daily lunches out and weekly massages may not be financially feasible. Think about making that morning coffee at home – even the little things can make a huge difference. Cutting costs is perhaps an unwanted part of paying off debt, but it is completely necessary.

    4. Start with the credit product with the highest interest rate, and ramp up your payments on it first. Continue making payments (as much as possible) on the others. Once you feel more comfortable, move on to the next highest one.

    5. Start saving – even just your spare change – in a piggy bank. This way, when you want to make an indulgent purchase you can use that money rather than increasing your debt.

    If even these tips seem like a drop in the bucket, perhaps it is time to think about getting some extra help. A debt consolidation, one done by a reputable company, can turn all of those small monthly payments into one and cut the interest. A consumer proposal shares these benefits, as well as the possibility of cutting the total debt. Bankruptcy may also be a viable option.

    Our best advice as far as paying off debt? Be realistic. Speak to a debt specialist to find out exactly what works for you.

    DebtCare Canada has the resources to help you get that debt under control. For advice about your strategy for paying off debt, please call us today at 1-888-890-0888.