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Tag: debt relief

  • Bank of Canada Staying at 1.75% for December 2018 – But Don’t Delay Dealing with Interest Rate Debt

    Good news for 2018: we won’t be seeing any more Bank of Canada interest rate increases this year.

    On December 5, 2018, the Bank of Canada (BOC) announced that the overnight interest rate would stay at 1.75% for the month of December.

    The next interest rate announcement is scheduled for January 9, 2019.

    What does this mean for Canadian consumers? It’s a positive if:

    • You’re carrying a lot of debt — this means your payments won’t be increasing yet.
    • You’ve been charging holiday purchases to your credit cards. While you’ll still have to pay for those purchases, and associated credit card interest rates if the balances aren’t paid in full, you won’t have an additional BOC rate hike.
    • You have a variable-rate mortgage. This means that your rate won’t be increasing this month.
    • You’re rebuilding credit. If you’re working on credit repair, it’s important to pay your bills in full and on time. If you have bills that are affected by changing interest rates (i.e. not a fixed cost), it will make it easier on your budget.

    What this doesn’t mean:

    • You should spend more this holiday season. Remember that whatever you charge will need to be paid off in full and on time if you want to avoid interest. If you’re racking up holiday purchases and are tempted to spend more because of the interest rate hold, proceed with caution.
    • Interest rates are done increasing. It’s possible the BOC will raise rates during the January 9 announcement. If so, this is a relatively small window. Make a plan now while there is a break in increases.
    • You can ignore dealing with debt. If it’s hard to make ends meet now, it will be even more difficult if rates rise again. Honestly assess your finances and ask if you could handle an increased rate. If not, it’s time to consider debt management options, like accessing home equity, applying for a debt consolidation loan, or filing for a consumer proposal or for bankruptcy.

    DebtCare Canada can help future-proof your budget against interest rate increases.

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

  • BOC Interest Rate Jumps to 1.25%

    Higher interest rates for Canadians are continuing in 2018. On January 17, 2018, the Bank of Canada (BOC) announced an interest rate increase to 1.25 per cent. The BOC interest rate affects all forms of debt, including student loans, home equity lines of credit, credit cards, and more.

    The strong economy, job growth, and business investments were all cited as reasons for the January increase.

    The first BOC interest rate increase came in July of 2017, taking the rate from 0.5 per cent to 0.75 per cent. The second increase happened in September of 2017, going up to 1 per cent. The January announcement is the third increase; however, more are expected to come in 2018.

    “While the economic outlook is expected to warrant higher interest rates over time, some continued monetary policy accommodation will likely be needed to keep the economy operating close to potential and inflation on target,” the BOC said in a press release.

    The BOC isn’t the only one increasing rates. After the BOC announcement, Canada’s major lenders are raising their prime lending rates, which will affect variable-rate mortgages, home equity lines of credit, and personal loans.

    The BOC acknowledged Canada’s record-high household debt, but said that it predicts consumer spending will go down with increased interest rates and new mortgage rules.

    The next BOC interest rate increase is scheduled for March 7.

    Does the BOC interest rate increase have you worried about your debt levels? Higher interest rates can make outstanding debt that much more difficult to pay off. But there is debt relief available.

    One of the best ways to find debt relief is to work with a qualified financial professional to know your options and make the wisest choice. DebtCare has debt relief programs that can help you cope with this BOC interest rate increase and any future ones, too.

    Call DebtCare today at 1 (888) 890-0888.

  • Is a Consumer Proposal the Right Answer?

    Over the last few years, as Canadian consumer debt levels have risen, many Canadians have found a consumer proposal to be a very viable option for debt relief. When debt becomes overwhelming and payments are being missed, climbing out of the hole can seem impossible. Sometimes a consumer proposal is the best way to get a handle on things and start fresh, but is it always the answer?

    With a consumer proposal, a careful review of your financial situation results in a proposed amount to be repaid to your existing creditors. This number is then presented to the creditors, and the majority must accept. Once accepted, the proposal is legally binding.

    The benefits of a consumer proposal are well known. Once a proposal is accepted by the majority of your creditors and is in place, you no longer have to pay interest, can pay the debt back over 4-5 years, and often have to pay back less than the total owed. Additionally, all debts included in the proposal are combined and so you only have to make one monthly payment. The downside is that your credit will take a hit, but if you’re considering a proposal, this may have already happened.

    As far as how much debt is enough to warrant a consumer proposal, there is no established minimum, but people don’t generally file one unless they owe $8000 or more.

    Sound too good to be true? It isn’t. Really.

    But is it the best option?

    Let’s compare it to another popular debt relief option, a second mortgage. A second mortgage using some of the equity in your home is another great way to get a handle on your debt. Although it involves interest, you can make the term shorter so that the debt is paid off sooner. A second mortgage has the same benefit as a consumer proposal in that it consolidates all your debt into one smaller monthly payment, although it doesn’t reduce the amount of your debt or eliminate the payment of interest. A second mortgage is also much better credit-wise and won’t result in the negative impacts to your credit. Of course, you need equity to go this route, but if you have it, it can be a smart option.

    When it comes to dealing with debt that has grown to an unmanageable amount, a consumer proposal may be the best option, but as you can see, it is worth discussing your financial situation with a financial consultant prior to making a decision to see if any other options are worth pursuing, such as a second mortgage.

    At DebtCare, our goal is to help you find the right debt solution to suit your circumstances, be it a consumer proposal or something else.

    Want to get started? Call us today at 1 (888) 890-0888.

     

  • DebtCare Services May Be Covered Under Your EAP Program

    debtcare-services-ftDid you know that DebtCare Canada is a service provided through many Employee Assistance Programs?

    If you are having trouble rehabilitating your credit report or are struggling with debt and only getting by on minimum payments, you know that these things can take their toll. Financial issues have long been known to impact productivity levels at work, put stress on one’s family, not to mention cause trouble sleeping and constant anxiety which can both lead to overall health issues.

    It is for this reason that DebtCare exists – to help you deal with those financial issues that are keeping you up at night.

    At DebtCare, your consultation and information is completely confidential. Your coverage may include up to 3 hours per year for the following issues:

    Debt Relief Program

    The accumulation of debt usually happens over time, and by the time we finally start to realize the trouble we’ve gotten into, it is too late to turn things around on our own. Thankfully, there are programs out there that can help get rid of that debt and get you back on a strong financial foundation.

    Debt relief programs will:

    • Consolidate your payments into a single monthly payment
    • Reduce your debt up to 70%
    • Stop interest
    • Stop collection action
    • Stop enforcement like frozen bank accounts, wage garnishments and more…

    Loans & Financial Products

    If your credit isn’t quite where you’d like, it can be tough to obtain financing for various items. Even if the bank says no, that shouldn’t be the end of the line – and with DebtCare, it isn’t.

    If you want to consolidate debt, pay off taxes or even finance home renovations or your child’s education, DebtCare offers some of the most competitive financial programs, even when credit is less than stellar.

    Programs:

    • First mortgages
    • Second mortgages
    • Home equity lines of credit
    • GIC loans – credit rebuilder
    • Secured credit cards – credit rebuilder

    Credit Fix Program

    When you have errors on your credit report, these can be major inhibitors to your ability to obtain financing and can significantly impact your credit score. Having them removed can be a hassle, but DebtCare’s credit repair program deals with the following credit issues:

    • Errors on your credit report
    • Old items continuing to report
    • Duplicate items reporting
    • Disputes
    • Past bad credit – late payments, defaults, bankruptcies
    • Rebuilding credit after bad credit history and more…

    If you are interested in learning more about any of these programs or to find out if they are covered.

    Contact DebtCare to find out what services we can offer you – your first consultation is always free. 1-888-890-0888.

     

  • Debt Consolidations – The Dos and Don’ts

    Debt ConsolidationsOver the last few years, debt consolidations have become a very popular form of debt relief. For various reasons, not least of which are the single monthly payments and the significantly reduced interest, debt consolidations make it easy for those struggling to maintain a hold on their finances to regain a measure of control.

    That being said, there are some definite dos and don’ts when it comes to debt consolidations. If you are considering this method as a means to fix your financial situation, here are some important things to think about before going full-steam ahead.

    Do: Talk to a professional debt consultant. For some, debt consolidation is the best option – but this will depend on a number of different factors, including the amount of debt, type of debts, and your current credit status. For example, if your credit is less than stellar, you may not be able to obtain approval for a debt consolidation loan.

    Don’t: Going with the first company you find is never a good idea. Do your research. There are a great many companies that claim to offer debt consolidations – but some are more reputable than others. Beware of those companies that require you to pay upfront and amass a small sum before any money goes to creditors. Also be wary of those with a less than stable history: if the company has only been in business for a year, it might be better to stay away. Read up on those companies you are considering. Make sure that they have a well-established, respected reputation, and the experience that means they can actually help relieve your debt worries.

    Do: Once you have decided that a debt consolidation is the right choice for your financial situation, think carefully about repayment terms. A longer term may be attractive because it offers lower monthly payments, but just remember that you will end up paying more in interest vs. a shorter term with higher monthly payments.

    Don’t: Using those cards that you have cleared with a debt consolidation is a very bad idea. For example, if you completely clear a credit card with a limit of $10,000, that doesn’t mean that you have $10,000 to spend!! Consider reducing the limits on cards you’ve cleared, and stop using these unless you absolutely have the money to pay them off as soon as you get the bill. This is a very dangerous temptation for many – so try and remove the temptation as much as possible.

    A debt consolidation can be incredibly beneficial – you just need to be careful before enlisting the services of a company that offers this service.

    DebtCare Canada has the knowledge and experience – and the reputation! We know how to help you get rid of those debts and get back on track financially. Call us today for a free consultation: 1-888-890-0888.

  • Debt Relief Strategies to Help You Fall Back in Love with Your Bank Account

    Debt ReliefThis time of year, it is hard not to get swept up in the spirit of the season. Hearts and cupids in every store window and Valentine’s Day commercials for flowers and jewellery make it almost impossible to ignore. And perhaps there is love in your life – but when that isn’t an emotion you have towards your bank account it might be time to get your butt in gear and start fixing those finances.

    Check out this list of debt relief strategies to help you fall back in love with your bank account!

    1. If you feel as though you can handle your debt on your own, start with a budget and decrease your spending on unnecessary items and increase the amount you put towards your debt each month. This strategy can take time, but if your debt isn’t overwhelming it can be highly effective.

    2. For more complex debt, debt consolidation might be the answer. Simply stated, this means consolidating all of your debts into one, single, easy to manage monthly payment. This also means that you save on interest – a major bonus! This option is best suited to those with a stable credit history as it requires being approved for a secured or unsecured loan.

    3. Consumer proposals have also become very popular debt relief strategies. A consumer proposal involves applying to your creditors to reduce your debt and accept a regular monthly payment. Since this has to be handled by a licensed administrator, and thus can’t be done on your own, this option requires careful preparation with a debt consultant who will independently represent you in your proposal.

    4. Bankruptcy has always been an important avenue for debt relief for those with debt that has become insurmountable. When you are regularly missing payments, choosing between various bills and which ones will be paid, or are receiving calls from collection agencies all the time, your financial situation is likely in dire straits. A bankruptcy is not for everyone, but meeting with a debt consultant (not trustee in bankruptcy) can help you determine if it is the best choice for you. A bankruptcy gets rid of those debts and you are required to make a monthly payment in bankruptcy, giving you the chance to stop the collection calls, stop the interest and get back on a firm financial footing.

    When debt seems to be haunting even your dreams (or rather nightmares), stop worrying and start strategizing. Take advantage of the debt relief strategies out there that can help banish those bad dreams and help you fall back in love with your bank account.

    For more about debt relief and how to achieve it please call DebtCare Canada today at 1-888-890-0888.

  • Debt Relief: Creating a Weekly Financial Checklist

    Debt ReliefWe can all use a little help sometimes, and when it comes to financial planning, some of us are more likely than others to need that helping hand. If you are struggling with debt and need some debt relief, there are countless ways that this can be done – but sometimes it starts with a little push at home. Thinking about debt relief and actually finding it are often two different things, and so it is helpful just to have a starting point.

    Here is that starting point. Use this debt relief weekly financial checklist for September and see just how much you can accomplish on your own! Take some time at the beginning of each week and work through these points.

    First week of September: Sit down and create a budget. Include all of your monthly expenses (and we mean all) and all of your monthly income. Make a chart that will help you better determine where your extra cash is going, and think about the best ways to bring that expense number down. Set out jars with cash for each category of expense and live strictly on cash for the month, setting aside the amount that meets your expenses, but on a budget.

    Second week of September: Check your credit report. When you start to pay off debt and subsequently rebuild your credit, one of the most important things that you can do is check your current credit status. This is actually something that you should do a few times a year, not only to see where you stand credit-wise, but also to ensure that all information contained within your credit report is accurate. If it is not, you need to deal with discrepancies immediately.

    Third week of September: Devise a long-term plan to pay off your debt. If most of your debt is in the form of credit cards, think about paying off the one with the highest interest rate first – after all, it is the one that is actually costing you the most money.

    Fourth week of September: Go back to that chart created at the beginning of the month and see how well you were able to stick to it. Take any money accumulated from leftovers in the jars and put it right onto your debt. Give yourself a pat on the back, and get ready for next month!

    If your leftover cash wasn’t what you had hoped, or following the budget was just a bit too difficult, it might be time to head to a professional for some help. DebtCare has you covered. Call us today at 1-888-890-0888.

  • Don’t Be Fooled: The Truth About Pay Day Loans

    Payday LoansIn the world of credit, a payday loan has become an increasingly popular form of financial funding. The ease with which they can be obtained makes them seem attractive to many who need quick cash. The ability to walk into a payday loan location and walk out with cash can be very tempting – but beware. This week’s school for debt relief is all about the truth about pay day loans.

    What is a pay day loan? Pay day loans are those loans given by an institution that is not a bank, and are generally short term. They are called payday loans because the borrower typically borrows just enough money to get through to the next payday, at which time repayment is due.

    These are just short term loans, so what’s the harm? Well, when you take out a pay day loan you are agreeing to pay back the full amount in a very short period of time (usually by the time you next get paid), coupled with a fee that can range from 20 to up to 500 percent.

    Think about it this way: Let’s say your car breaks down and the total cost of the bill is $1000 (unfortunately a very common occurrence). However, your finances are tight right now so that $1000 is not readily available but you can’t get to work without your car. So you decide to go to a pay day loan company to borrow that $1000 for a period of 1 month. Let’s say that company charges $20 per $100 borrowed (a typical fee). That means that on top of the $1000 you owe $200 in fees. So, at the end of the loan period you owe $1200. Hmmm, if you didn’t have that extra $1000 at the beginning for the month, are you likely to have it at the end. So you roll it over, getting charged an extra $200 for a month’s extension…the loan doesn’t seem so small now, does it?

    If you require a short term loan, initially pay day loans can seem very attractive. But once you have broken them down and added the fees and interest, it is clear why these credit products are less than beneficial, no matter how you look at it. Pay day loans should be avoided at all costs – their costs to you are just too high.

    If you have found yourself stuck in a pay day loan cycle and need help getting out please contact DebtCare Canada today by calling 1-888-890-0888.

  • School For Debt Relief #3: Rebuilding Credit

    Debt ReliefThe beginning of the school year is behind us; students have settled in and teachers have found their groove. This final blog in our school for debt relief series will help get you back on track for the rest of the school year. Once you have worked out your debt repayment plan, stopped the collection calls and gotten your finances righted, it is time to think about rebuilding credit.

    If your debt became problematic in the past, it is highly probable that your credit has taken a hit. Thanks in part to things like missed or late payments, having too much credit or a bankruptcy or consumer proposal, your credit is now very likely at the low end of the scale and you may be finding it very difficult to secure any sort of financial funding. If this is where you currently find yourself it is important to understand that rebuilding your credit takes time, but it is possible.

    Here is our list of the top ways to help rebuild credit.

    Apply for a secured credit card. With a secured credit card, you make a deposit on the card which the creditor then holds as a guarantee. This deposit, usually equal to your credit limit, lets you make regular purchases with the card without the lender worrying about security. Having a secured credit card shows up on your credit report, letting other creditors know that you are being responsible with your credit and not spending outside your means.

    Make at least the minimum payment. This is crucial, as it may be what brought your credit down in the past. It is always a smart practice with a credit card to try and pay off the entire balance each month – that way you don’t accrue any interest and can’t get in over your head. That being said, if you cannot make the payment in full make sure that you pay at least the minimum, or just a little more if possible. Any missed or late payments will just get that score decreasing again.

    Don’t apply for too many credit products. Applying left, right and centre for credit is going to make you look like you are a credit seeker – and this implies that you cannot meet your monthly needs. Also, do not have too many credit products. Just because you have cards with high limits without using them doesn’t mean that your credit will be good. Keep limits low.

    Review your statements regularly and check your credit report annually. To avoid mistakes and to ensure your payments are always made on time, review your statements monthly and report any errors immediately. This is also a good rule of thumb with your credit report – it should be checked for errors and those errors reported on at least a yearly basis (but not too often either).

    Just because you have had trouble with credit in the past doesn’t meant that it has to haunt you for the rest of your life. Use these tips to help rebuild credit. And remember, Rome wasn’t built in a day; rebuilding credit takes time – just be responsible and think before you spend.

    For more information about rebuilding credit or for debt relief please contact DebtCare Canada by calling 1-888-890-0888 or visit www.debtcare.ca.