DebtHelpers.ca – Debt Relief Options for Canadians

When it comes to debt relief, there is no one-size-fits-all solution. What works for one person may not be the best option for another. It is important to consider all the available options and find the solution that makes the most sense for one’s unique financial situation.

Here, Debt Helpers shares some useful debt solutions to explore, as well as the risks and benefits of each to help people make an informed choice:

Debt Consolidation

This is an option for anyone with different types of consumer debt that need to be managed more efficiently. Multiple consumer debts mean multiple due dates, different lenders, and varied interest rates that one has to keep track of.

One of the benefits of a debt consolidation loan is that it allows one to roll all consumer debts into one, and the interest rate is typically lower than what it originally was. It also makes it easier to track overall debt level, payment dates, and more.

Debt Management

One can opt for debt management. This means coming to an agreement with creditors to help reduce payments. A credit counselor can provide assistance to someone who needs to negotiate with a creditor. Should the negotiation go as planned, the borrower can end up with a much lower interest rate. A debt management plan can also make it easier for a borrower to pay off debts, thanks to lower interest rates.

Debt Settlement

Debt settlement means repaying just an agreed-upon portion of the debt. This typically involves a debt settlement company. Over a certain period, the borrower will make payments not to the original creditors but to the debt settlement company. When the debt settlement company deems there’s sufficient money built up, a negotiation with the creditor will be started. The debt settlement company will attempt to settle the borrower’s debts for less than what is owed using a lump sum from the borrower’s holding account.

The benefit of this particular solution is that if the creditors accept the offer, the borrower will pay less than the amount owed. However, there will be no guarantee of this, and there is a possibility that the borrower will be charged a certain fee and be referred to a Licensed Insolvency Trustee who will work on a consumer proposal.

Consumer Proposal

This is an option for legal debt forgiveness wherein a Licensed Insolvency Trustee will negotiate an agreement between borrower and creditor so the former will be able to repay a portion of the total debt owed over the span of five years maximum. This allows the borrower to be out of debt entirely after that period with lower monthly payments, too.

Another good thing about consumer proposals is that there will not be any harassing phone calls, threats, and such from creditors, as no legal action can be taken against the borrower.

That said, a consumer proposal means the borrower gets an R7 credit rating on the credit report. It is possible to rebuild credit after the debt is repaid.

Bankruptcy

Personal bankruptcy can solve debt problems almost instantly, but it should be the borrower’s last resort. Declaring bankruptcy will clear most unsecured debt, if not all. When a borrower declares bankruptcy, all parties involved will be treated fairly. Borrowers who file for bankruptcy will get an R9 rating which will remain on the credit report for six years after being discharged from bankruptcy.

Conclusion

It can be overwhelming to have to deal with unmanageable debt. Anyone who is having a hard time making payments every month should consider the debt relief options shared in this post. By taking the initiative and seeking the help of debt consultants, one can be a step closer to finding debt relief and finally achieving financial freedom.

DebtHelpers.ca is one of the best debt consultants in Canada that can help people having difficulty managing their debts. Get in touch with experts from Debt Helpers to learn more about effective debt relief options!