Have you set debt targets for the second half of 2017? Do you need advice on debt consolidation and other debt solutions? Asking for help with debt can be intimidating, so it’s a good idea to find out about your options first.
It is not surprising that many Quebecers are looking for ways to reduce their debts. Even though the average household debt in Quebec is lower than the Canadian average, it is still a little less than $ 20,000.
Debt consolidation options
Borrowing can finance high-priced items such as a house or car, and major expenses such as studies or major renovations. Most people do not have the capacity to make such expenses spontaneously. However, when your smallest daily purchases add to your debt so you can do more with your income, the situation can get out of control. If your debts are growing faster than you want, you have the option of consolidating your debts. Here is an overview of the different debt consolidation strategies:
- Personal Consolidation – Combining your loans or credit cards with high interest rates and applying them to a credit card or loan with the lower rate could save you a significant amount of money every month.
- Adding Debt to a Personal or Unsecured Line of Credit – Paying off your high interest credit card balances using a personal line of credit will save you money in fees. interest, which will improve your situation. However, make sure you don’t continue to go into debt using these credit cards afterwards. Homeowners may also be eligible for debt consolidation in the form of a mortgage line of credit, but this is not always a good idea since your home becomes collateral for added debt.
- Consolidation loan – If you have a stable income, you could obtain from your bank a consolidation loan which will allow you to combine your consumer debts (credit cards, personal loans, payday loans) in a single payment more affordable monthly.
- Consumer Proposal – This is a legally binding solution that allows you to negotiate with your creditors to reduce your debts and extend your repayment period. To be eligible for a consumer proposal, the value of your debts must be between $ 5,000 and $ 250,000 and you must be able to repay part of your debts.
Where to find help?
Depending on your debt level and the type of your debt, the assistance to which you have access can take several forms. If you are ready to apply for a debt consolidation loan, you can discuss it with an adviser at a bank or at a lender. A reputable credit counseling agency will provide you with a range of debt assistance services that may include individual counseling, group finance workshops, or debt management plans. It is important to obtain the list of fees and rates for the solutions offered before concluding an agreement or signing anything. Learn about the role of a professional agency offering credit counseling.
The role of a licensed insolvency trustee is to explain your debt relief options and concepts to you, for example, advice on budgeting, credit counseling, debt consolidation, debt management, debt settlement or insolvency. A licensed insolvency trustee can discuss with you the process of filing a consumer proposal and how it will allow you to pay off some of your unsecured debt over a period of time. In Canada, a licensed insolvency trustee is the only debt relief professional who can file a consumer proposal or bankruptcy. Learn more about licensed insolvency trustees, the process for submitting a consumer proposal and declaring bankruptcy by visiting the Office of the Superintendent of Bankruptcy Canada website.