Best Debt Relief Solutions
Getting Rid of Your Debt
Do-it-Yourself Debt Relief Options
When looking for help with the burden of debt, you will likely have come across several options. It can be challenging to determine which of these solutions is the best for you, so we will provide you with an overview of the different debt relief options available.
Do-it-Yourself Debt Control
There are a few “do-it-yourself” steps you can take to tackle your debt before seeking the help of a professional. These options include speaking with your financial institution about consolidating your debts, selling off some assets to pay off some or all of your debt or reworking your household budget to allocate more money to debt reduction.
Budgeting
A household budget can go a long way to controlling your debt and spending overall. It will allow you and your family to manage monthly expenses and help you identify areas where you could cut spending to set money aside or allocate toward repaying your debt.
Debt Consolidation Loan
You can use a debt consolidation loan to combine and pay off multiple debts into one payment at a lower interest rate. For example, if you have three credit cards with an interest rate of 19.9%. You can combine (or consolidate) these debts into a consolidation loan with a single payment at 12% interest. You can use these savings to pay down your debt.
Most people face debt challenges at one point in their life or another. When such a challenge occurs, it is a good idea to obtain professional help rather than suffer in silence and be stressed out. This is especially true considering that there are multiple solutions that are available.
Chande & Company Inc. is a Licensed Insolvency Trustee and everyday we help people take back control of their debt challenges and get a fresh start. We often get called debt experts. This should come as no surprise because providing debt relief solutions to individuals is all we do. If you are ready to get out of debt, we are here to help.
Be Careful Who You Are Dealing With
Before we cover the various debt relief options that are available to you, a word of caution. There are a lot of scams out there that take advantage of people going through debt challenges. Know who you are dealing with. In Canada, only Licensed Insolvency Trustee’s (like Chande & Company Inc.) can file either a consumer proposal or a bankruptcy. No other person or organization is permitted to do so. Furthermore, do not pay anyone any upfront fees when discussing your debt challenges. We offer free consultations to anyone that would like to go over in a personal, no obligation, meeting of the various debt relief options that are available to them.
Every person has a unique reason for why they find themselves in a difficult position in repaying their debts. Some common reasons include: sudden job loss, marital breakdown, health related problems, business challenges are just a few. Ready to get started? Great! Fill out the form just below and we will contact you to get the process of being debt free started.
DEBT RELIEF OPTIONS
If you feel that you cannot reasonably control your financial burden by yourself, you may want to seek the help of a professional. There are different avenues you can pursue.
Consolidation loan (aka debt consolidation)
This type of loan combines many small loans and debts into one larger loan. The intention is to combine multiple loans into a single payment that is more manageable and often more affordable since the single large loan has a lower interest rate. This is an effective strategy if you have many high interest debts such as credit cards and/or pay day loans. The one problem, from our perspective, is that you still have all the debt that you had before, it is just packaged differently. Keep in mind that you will need to apply for this larger loan which could be an issue if you have a poor credit score or a history of late/missed payments.
Debt Management Plan
In a DMP, a non-profit credit counsellor takes stock of your debts and prepares a multi-year repayment plan. This solution will allow you to repay your debts over three to five years. This proposal will then be presented to your creditors, and if they accept the plan, you will make one monthly payment to the credit counselling agency.
The credit counsellor may be able to negotiate a reduction to the interest on your debt, which you could use toward repaying your debt. A DMP is not any kind of debt reduction or cancellation, as you still have to pay off your entire debt.
It is also important to note that this is not the same as a consumer proposal.
Debt Settlement Plan
Unlike a DMP, where you deal with a non-profit credit counsellor, a debt settlement plan is prepared by a for-profit debt settlement company. In this option, you make payments to the debt settlement company into a holding account instead of to your creditors over several months. Once this has built up, the debt settlement company will contact your creditors to negotiate a settlement for less than what you owe.
It is important to note that this settlement is not guaranteed and can be revoked at any given time. The company will also charge you an unregulated fee for their services.
Consumer Proposal
A consumer proposal is a legally binding agreement between you and your creditors to pay off a portion of your unsecured debts over a specified period, up to five years. A Licensed Insolvency Trustee administers it. After all payments are made, the remainder of your debt will be discharged, which is the main difference to a DMP, where you have to repay 100% of your debt.
Filing a consumer proposal also stops all legal action against you, such as wage garnishment, frozen bank accounts or liens on your house. It also will immediately stop all harassing phone calls from collection agencies and freezes all interest.
Personal Bankruptcy
In most cases, bankruptcy is considered the last resort in debt relief. Filing bankruptcy will release you from the majority of your debt. It will also stop all legal action against you and requires the services of a Licensed Insolvency Trustee. Contrary to popular belief, you do not lose “everything” in bankruptcy, as there are exceptions to which assets can be seized.
Credit Counselling
Credit counselling is provided by a non-profit agency providing a range of services to help those who have trouble managing their money and debt. Among these services are budget planning and Debt Management Plans (DMP).
It is important to note that credit counselling agencies and debt settlement companies are not the same.
Debt Consolidation
With a debt consolidation loan, you combine several multiple small loans or debts under one new loan. This service has numerous purposes. You can completely pay off smaller debts or consolidate several higher-interest debts into one payment with a lower interest rate spread out over a more extended period of time.
The downsides of this solution are that you are not eliminating your debt but only making it more manageable. You also have to apply and qualify for a consolidation loan.
Want to Learn More About the Debt Solutions Available to You?
The experienced Licensed Insolvency Trustees of Chande Debt Solutions are focused on personal debt relief and insolvency services. We know that filing a consumer proposal or bankruptcy is a serious matter, and we want to ensure that you are well informed and don’t rush into any solutions. All of our consultations are free, without time limits.
Call us today at 416-366-3328 or fill out our convenient online form to learn how we can help you recover financially.
What to Watch Out For When Considering a Debt Settlement Company
Debt settlement companies are for-profit businesses that may not always have the best of your interests at heart. Here are some tactics that debt settlement companies may engage in:
High-Pressure Sales
Some debt settlement companies use aggressive telemarketing calls to promote their services. They may require you to decide on the spot, which can create a challenging environment to make an informed decision. You should never feel pressured to agree to something immediately.
Unrealistic Promises
You have to be aware that some debt settlement companies will try to convince you by making unrealistic promises about the results they can get. They might misleadingly promote their services.
Regardless of what they may claim, debt settlement companies cannot:
- Guarantee to reduce your debts by a large percentage
- Guarantee your creditors will always agree to participate in debt settlement negotiations.
- Prevent creditors and collection agencies from seizing your salary or taking money from your bank account.
- Stop your creditors from trying to recover the money you owe in court.
- Stop phone calls from your creditors.
- Offer legal protection from creditors’ actions like seizing assets.
- Handle government-regulated proceedings that release you from debt. This is part of consumer proposals and bankruptcies. Only a Licensed Insolvency Trustee can offer you these two options.
Other possible suggestions include offering a loan with the suggestion it will help repair your credit score. Chances are high that in the case of such a loan, you will not actually receive any money but that the company will tell you that the loan will be used to pay for its services and programs.
While you will have to make regular payments to repay that loan, it usually comes at a high-interest rate and does not help you repay any of your existing debt. You will still be required to make payments on the debt you owe and may end up owing more than before with an unchanged credit score.
High Fees
Many debt settlement companies will charge you advance or monthly fees. Some companies will charge you advance fees even if they are unsuccessful in negotiating with your creditors to reduce your debt. Fees of debt settlement companies are not government-regulated and can be very high.
Delayed Payments
Some debt settlement companies delay making payments to your creditors. They do this intentionally in the hope of getting better results in negotiations with your creditors. You bear the consequences as your credit score may be impacted, as it will seem as if you cannot repay your debts. Always ask for receipts for payments they make.
Before You Sign Up for Debt Settlement
There are a few things you should always do before signing up with a debt settlement company:
Research the Company’s Reputation
Always do a background check of the company. Check for any unresolved or severe complaints about the company, including false advertising or delayed payments to creditors.
You can check for complaints at:
Review the Contract Carefully
Take the time to thoroughly review the contract, and don’t let the company pressure you to agree to anything. If you are unsure about any terms or conditions, ask questions to ensure you understand everything to make an informed decision.
Always keep a copy of the contract.
Filing a Complaint About a Debt Settlement Company
If you have any complaints about a debt settlement company, the provincial and territorial governments are responsible for regulating debt settlement companies and investigating consumer complaints. Contact your provincial or territorial consumer affairs office.
Eliminate Your Debt
Ideally, the best debt solution will solve all of your debt problems. While debt management or consolidation loans can help reduce interest and help you with better tactics, they don’t or barely eliminate your debt. You may be able to pay off outstanding bills or some credit cards, but what about the crippling student loans or the tax debt you’ve been pushing away for years?
The Licensed Insolvency Trustees of Chande Debt Solutions can help you eliminate the following:
- Credit card debt
- Tax debt
- Student loans, as long as you have been out of school for at least seven years
- Outstanding bills
- Car loans
- Payday loans
It is time to seek help from our experienced professionals if:
- You have to use credit cards to cover bills and daily expenses;
- You spend more than you have coming in;
- You are forced to borrow money to make ends meet before every payday;
- You are only able to pay the minimum payments or interest on credit cards or lines of credit;
- Collection agencies are calling you daily to collect outstanding debts;
- Creditors may have garnished your wages and are threatening to repossess your car or house or sue you;
- Utility companies have cut off services because you have not paid your bills.
Call Change Debt Solutions today at 416-366-3328 or fill out our convenient online form to learn how we can help you recover your financial freedom.
Better Debt Relief Services
Many unlicensed debt management companies offer help to eliminate your debt. Still, they often charge hefty fees and end up referring you to a Licensed Insolvency Trustee, a step you should have taken in the first place.
Chande Debt Solutions want to help you resolve your debt issues. This means diligently reviewing your financial situation to determine the best debt relief option. We will negotiate consumer proposal terms you can afford and are acceptable to your creditors to find the middle ground for success. We have a 99% acceptance rate for consumer proposals and a high completion rate for our clients.
Many debt relief options are available, but sometimes, bankruptcy is the only option, the last resort. We will only recommend it if all other debt-relief options are exhausted.
Reasons to Make a Debt Relief Plan Today
Our Licensed Insolvency Trustees can help you:
- Repay your debts in one affordable monthly payment;
- Save thousands of dollars in interest
- Explore options to eliminate your debt and re-establish financial stability
- Manage your money better to pay your bills and living expenses.
The experienced Licensed Insolvency Trustees of Chande Debt Solutions are focused on personal insolvency services. We know that filing a consumer proposal or bankruptcy is a serious matter, and we want to ensure that you are well informed and don’t rush into any solutions. All of our consultations are free, without time limits.
Call us today at 416-366-3328 or fill out our convenient online form to learn how we can help you recover financially.
Debt Relief FAQs
There are a few criteria you must meet to be able to qualify for a consumer proposal:
– You must be an individual, not a business or corporation.
– You are insolvent, meaning you cannot pay your debts as they are owed.
– You must have unsecured debts to settle, like tax debts or credit card debt. (Note that you can’t include any secured debt such as a mortgage or car loan.)
– Your debts must not exceed $250,000.
– You must have a steady source of income to enable you to make your monthly payments.
– You cannot have a prior consumer proposal that is still open and cannot have failed a previous consumer proposal.
Canada does not have a government-backed debt forgiveness program. But there are two legally binding debt solutions: consumer proposal and bankruptcy.
The only two legally binding debt relief options are a consumer proposal and bankruptcy. Other options are available to you but are not legally binding.
A consumer proposal and bankruptcy will impact your credit score due to the discharge of part or all of your debts. A consumer proposal will show as an R7 rating on your credit report and will remain for 3 years after completion or 6 years after filing, whichever comes first. Bankruptcy results in an R9 rating on your credit report and lasts 6-7 years after completion.
Unless you overpaid, you cannot get any money back from debt relief. However, you can apply the money saved toward other debt you may have or begin building up savings.
Final Word On The Best Debt Relief Option
Ultimately, the best debt relief option should help get rid of your debt challenges. Getting one (large) loan to consolidate many smaller loans does not actually get rid of the debt. It just repackages the debt. Additionally, getting rid of some debts but leaving other debts unpaid also does not eliminate your debts. Want to know how to get rid of your debts once and for all? Contact us today for a FREE, no obligation, consultation. We can help you take back control of your debts and get a free start. It all starts with the first phone call or email.